What is the long-term outlook for the acquisition vehicle
In just three years, backed by the might of Towergate founder Peter Cullum, CCV has gone from start up to £61m brokerage. Despite paying what might now look like high multiples for businesses, CCV has not lost its appetite for acquisitions.
So what is CCV all about and where is it heading?
Since its inception, and under the energy of former chief executive Tim Johnson, it has doubled to more than £200m in gross written premium.
It did so in the years of paying high multiples, but now those multiples have come crashing down.
The money is clearly there for CCV, so expanding the acquisition vehicle is not the problem.
The long-term issue is whether those acquired broker entreprenuers will still have the zest and enthusiasm having sold their stakes.
Restrictive covenants essentially stop staff leaving with their client list, but nothing is to stop them departing, in three or four years if they want to go it alone.
Can those brokers or MGAs hold their value long-term? It’s a question that is relevant to not only CCV, but the whole Towergate family, which has fought hard to integrate its distribution and product delivery strategies.
You can be sure that new acquisitions of CCV will have elements of the Towergate brand stamped on them.
If Cullum’s mantra is ‘distribution, distribution, distribution’ then CCV will be expected to fit into that picture.
Expect acquisitions to slowly be integrated into Powerplace, the commercial lines quote and back office system that springs off Open GI.
Also expect to see those brokers added Towergate Underwriting to their panels, and a possible join up to Broker Network.