Wednesday, July 24, 2024

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Private equity firm Integrum makes move for SRS

Strategic Risk Solutions has welcomed investment from New York-based private equity firm Integrum Holdings LLP in a deal CEO Brady Young says will “further accelerate our next phase of growth”.

The deal, described as a “partnership”, is not a full acquisition and is designed to progress the independent captive manager’s growth plans.

“We are excited about the opportunity to partner with Integrum to further accelerate our next phase of growth,” said Young, who will remain as the company’s president and CEO.

“Integrum has a demonstrated successful track record of value creation across its current and past investments, and truly understands the alternative risk ecosystem and the value of the independent model.

“This partnership brings the stability and resources that will solidify SRS as a leader in the market for years to come,” Young added.

In the past five years SRS has begun building a significant presence in Europe with operations in Guernsey, Luxembourg, Switzerland, Dublin and Malta.

Previously, the captive manager had been focused on North America, Bermuda and the Caribbean where it has been present for 20 years.

Captive Intelligence understands Integrum first began conversations with Young last summer.

SRS had held talks with several private equity firms over the past year, and before the pandemic had been approached by one large broker-owned captive manager, as well as international brokers that do not already have a significant captive presence.

Young, however, has always been keen to remain independent from a large brokerage, seeing it as a strong part of the captive manager’s unique selling proposition (USP).

Tagar Olson, founding partner of Integrum, said: “The captive insurance industry continues to present an expanding opportunity in both the property and casualty and employee benefits sectors of the market.

“Brady and the SRS team have built a reputation defined by innovation and quality, and we look forward to supporting them as we unlock opportunities that will enhance the services they provide to their clients and the value they bring to their business partners.”

Sources told Captive Intelligence Integrum believes there are “strong tailwinds behind the risk retention industry” and SRS aligns closely with its mandate.

Integrum lists “insurance and insurance services” as one of its four focuses, and already has USI Insurance Services in its portfolio, which it invested in last year.

Young will continue to lead SRS, with Integrum “involved but not driving” and, importantly, providing a capital injection to accelerate growth plans.

Private equity firms have become increasingly interested in risk and insurance services, including captives, in recent years.

The Lee Equity Partners investment in Captive Resources in 2012 has been a huge success story, while Beyond Risk, which has bought up several risk and insurance services companies since 2020, including BevCap ManagementLLC and GPW & Associates, is backed by Summit Partners.

Arsenal Insurance Management, one of those in the Beyond Risk stable, filing for Chapter 11 bankruptcy in January, 2023, however, is a warning that thorough due diligence is required.

The transaction will be subject to customary closing conditions including required regulatory approvals.

Waller Helms Advisors acted as exclusive financial advisor to Strategic Risk Solutions on the transaction, while Insurance Advisory Partners acted as exclusive financial advisor to Integrum.