The appointment of a new chief executive at Giles makes sense – but what does it mean?
There is one big question about today’s arrival of Brendan McManus as UK chief executive of Giles and Chris Giles moving to executive chairman.
This is can these two big personalities work together? However McManus will be confident he can work under Giles after answering to the formidable character Joe Plumeri at Willis.
Putting that questions aside, on the face of it, the move makes sense. Brendan, a respected and seasoned hand, takes over the nitty-gritty task of pulling up Giles earnings in a challenging UK market. Chris Giles will look at expanding the business internationally.
Hopefully, that will give Giles a foothold in emerging markets. That in turn will give a bit of growth story for the business when it finally decides to float. Giles should look at Hyperion as an example of an insurance group that has a good balance of UK and international business, strong leadership and respect from the City.
Here lies the rub. When is Giles going to float? Last time Giles spoke to Insurance Times he mentioned 2012, but that now seems off the agenda, understandably, with capital markets bedevilled by uncertainty.
The broader point is that Charterhouse bought businesses in the boom years – Acromas, Giles and Drive Assist – which all have debts to pay down.
Capital markets are so fragile that there’s little hope of achieving a decent valuation by floating an indebted private equity business in today’s markets.
Nobody has a crystal ball, so it’s safe to say that the future of all Charterhouse’s ‘buy and build’ investments will remain difficult to predict.
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