Global brokerage Hub hits $23bn valuation with new PE investment
Global insurance brokerage Hub International has attracted “substantial minority investment” from funds managed by Leonard Green & Partners (LGP), a Los Angeles-based private equity firm, at a total enterprise valuation of $23 billion.
Hub claims the $23 billion represents the largest enterprise value to date for a private insurance broker. In 2022, HUB hit $3.7 billion in annual revenue.
HUB’s valuation has grown fivefold over the last 10 years, the company claims. It had a valuation of $4.4 billion and annual revenue of more than $1 billion in 2013 when Hellman & Friedman (H&F) initially invested in the broker. In 2018, its revenue exceeded $2 billion and its valuation had grown to $10 billion in connection with Altas Partners’ substantial minority investment in the company.
Over the years, the company has made key investments in product specialisation, digital solutions, brand marketing, broadening of employee benefit and human resources services, expansion into retirement and private wealth, growth in MGA/wholesale capabilities, and most recently expanding complex risk and international solutions.
Looking forward, HUB remains bullish on its acquisition strategy and growing its geographic footprint. The company also intends to explore bringing on additional minority investors in the coming months. The proceeds of these investments will be used to repurchase equity interests from existing equity holders.
The transaction with LGP is expected to close in Q3 2023. H&F will retain a controlling-interest in HUB, while the company’s management team will continue to hold a significant equity position. Additionally, Altas will remain a significant minority shareholder and continue to be members of the board. LGP will be joining the board.
“Despite the headwinds of the pandemic, interest rate hikes, and a global economic downturn, HUB has demonstrated its ability to persevere and excel. In the last 4.5, years we’ve delivered a 2.5 times ROI,” said Marc Cohen (pictured), president and CEO, Hub International.
“Our relentless focus on investing in boundaryless resources that provide best-in-class advice and solutions for our customers and our dedication to attracting and retaining the best talent in the industry affirms my optimism and energy for the future potential of HUB.”
Adam Levyn, partner at LGP, said: “We have admired HUB for a long time and are excited to partner with the entire HUB management team, Hellman & Friedman, and Altas to support the next phase of the company’s growth. HUB is the premier insurance broker and has all the attributes we look for in investments – a best-in-class management team, a differentiated culture, a long and consistent track record of success, and multiple ways to grow.”
Hunter Philbrick, partner at Hellman & Friedman, also commented: “HUB is an exceptional company – a gold-standard specialty-focused insurance broker. H&F takes great pride in our long-term approach with the companies we invest in, and it has been a privilege to support HUB’s incredible growth journey over almost a decade. HUB is now the 5th largest broker in the world and is growing faster today than at any point in its history. We look forward to continuing our relationship with the company as the largest shareholder, alongside the fantastic teams at Altas Partners and now, LGP.”
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