Broker network offers to take stakes of up to 19% in brokers.
Cobra is aiming to take stakes of up to 19% in brokers in an attempt to boost membership of its network and its premium income.
The broking group is launching the Cobra Capital Release scheme that will give individual shareholders in brokers an equity release in exchange for up to a 19% shareholding in the business. Brokers that release their shares will then join the Cobra Network.
Steve Burrows, chief executive of Cobra, said brokers could use the scheme as an alternative to selling or merging their businesses. He said it would target brokers between £1m and £10m GWP.
“We have already had a number of inquiries from brokers that want to sell [a shareholding] between 7% and 8% and up to 19%,” he said. “All the money goes to shareholder and they can do what they like with it.”
Burrows also hopes the scheme will provide opportunities for future acquisitions. “If they wanted to sell at a later stage we would hope to have the first and last call on it,” he said. He claimed that brokers would remain completely independent. “We will just get more members in the network and have more GWP to have a bigger say,” he said.