Howden war chest reaches £1bn with new investment

Howden Group Holdings has made a statement about its expansionary ambition with announcement that it has raised a war chest of in excess of £1bn ($1.25bn).

The re/insurance broker has added more than £875m through a mix of debt and equity efforts.

Howden said the newly available funds would be used for mergers and acquisitions (M&A), launching new initiatives and acquiring new talent.

Howden finalised a $500m seven year term loan on 24 March, with more than 60 lenders providing capital, including more than 10 new lenders to the group.

It also increased its revolving credit facility from £185m to £360m across a range of banking relationships.

Howden Group consists of its HowdenTiger reinsurance broker, since the acquisition of Tiger Risk, along with its Howden insurance broking and Dual managing general agent (MGA) subsidiaries.

“With the formation of HowdenTiger in January we have completed the architecture of the Group,” said David Howden, CEO, Howden Group Holdings.

“With the £2bn revenue milestone passed and with 14,500 employees across 50 countries and $30bn of gross written premium, we have the scale and leverage to be the difference that clients and talent are seeking,” Howden said.

“And now, following the £5bn we have invested over the last three years, we have raised a further £1bn giving us the financial firepower to accelerate at pace by joining with the best businesses and brightest talent who are looking for a forever home where they can continue to deliver their expertise and service in a culture that cherishes entrepreneurial spirit,” the CEO added.

The fresh investment “heralds the start of the next phase of its development,” the company said, after the announcement of pro-forma 2022 revenue of in excess of £2bn, led by back-to-back years of 19% organic growth in addition to M&A.

Howden said: “Our focus now turns to three key areas: unlocking the extraordinary value within the group by harnessing our collective power; attracting talent and aligned businesses; and investing in our infrastructure to ensure our experts are empowered to do their best for our clients.

Peter Blanc, executive chairman, Howden UK and Ireland, will now take on the new role of Head of M&A, reporting to David Howden, CEO Howden Group, effective immediately.

Blanc has a mandate to deliver a group strategy to expand its geographic reach and product expertise across retail broking, reinsurance broking and underwriting.

Howden said: “It is Peter who, in bringing Aston Lark to Howden, coined the phrase ‘forever home’. Having built Aston Lark from the ground up through his well-recognised ability to identify and execute high quality transactions with a deep-rooted cultural alignment he is obviously very well-placed to support me and our leadership teams in the further development of our very healthy M&A pipeline as we begin the next chapter of our development.

“With our leading position in the UK now established, we will continue to focus heavily on our European reach as well as developing our wider global footprint with acquisitions of high quality businesses where we can bring choice to clients,” said Howden.

“Our unique capital model has been the engine of our journey. I am thrilled that the clarity of our model allows us to raise competitively priced debt in extraordinary capital markets conditions.

“The longevity of our equity partners, General Atlantic (2013), CDPQ (2018) and Hg Capital (2021), and their belief in and support for our model is borne out in their continued investment in the Group, with each investing £450m since 2021.

“But most of all it is our employee ownership heart of which I am proud. In our most recent internal share offer we welcomed 1,000 new employees as shareholders. 4,500 of us now own a share in the business we are building.”