Electra’s Davies stake now worth half what it paid

Private equity house Electra Partners has seen value of its shareholding in loss adjusting firm Davies fall to £14.8m.

This is less than half the £35.8m Electra paid for the 46.2% stake in Davies back in September 2011.

However, Electra’s full-year results also show that it tripled its money on its investment in recently floated personal lines insurer Esure.

Davies devalued

Electra revealed that the value of its Davies stake had fallen another £9m, or 37.8%, in its second full year of ownership.

This followed a 33% drop in the first year to £23.9m from the initial investment level of £35.8m.

Electra said the reduced valuation reflected the low level of claims activity in the market and customer losses because of a “churn” in customer contracts.

On a positive note, Electra added: “A new chief executive has been appointed with a focus on returning the company to profits growth. Davies is investing in IT systems to improve many of its workplace processes and has won a number of significant new clients this year which will drive revenue growth over the coming years.”

Davies hired former Towergate mergers and acquisitions head Dan Saulter as chief executive in April.

Esure profit

Despite the fall in its Davies stake, Electra also revealed it had netted £86.9m from its stake in Esure, including an unrealised amount of £5.4m.

This is more than triple the initial outlay of £29.7m Electra invested in Esure’s management buyout back in 2010.

Esure’s initial public offering in March allowed Electra to realise the majority of its investment in the insurer.