22 March 2017Insurance

Major UK MGA CFC set for management buyout with PE backing

The management of CFC, the largest independent managing general agent (MGA) in the UK, are to execute a management buyout of the business with the backing of private equity firm Vitruvian Partners.

David Walsh, the founder and chief executive of CFC, and the rest of the management team expect to close the deal in the summer of 2017, subject to regulatory approval.

CFC incorporates two trading entities: CFC Underwriting and Modus. Together, the businesses are backed by 34 Lloyd’s syndicates. Over the past three years, CFC’s gross premium income grew at a compound annual rate of more than 40 percent to more than $200 million in 2016.

The company said the investment from Vitruvian will enable CFC to invest further in building its portfolio of emerging and specialty risk products, expand its global distribution base, and develop its technology platform.

Walsh, chief executive of CFC, said: "This is an incredible deal for our staff, carriers, brokers and customers – because it shows that we want to take this business to the next level and build the world’s pre-eminent MGA. We have always been committed to independence and wider employee share ownership and this deal is designed to deliver those two goals.

"I would like to thank our existing investors, including Richard Corfield, ex-chairman of RK Harrison, Mike Rees, co-founder of Benfield and Hugh Willis, co-founder of BlueBay Asset Management who have been hugely supportive of CFC during the last five years.

"We are now extremely excited to welcome Vitruvian as we embark on a new chapter for CFC. We continue to believe that our combination of great people, processes and technology puts us in the best possible position to capitalise on the opportunities we see ahead."

Joseph O’Mara, a partner at Vitruvian, added: "Vitruvian is delighted to back David and his team at CFC, at a time of rapid growth for the company and the markets which it serves. The management team have done an extraordinary job in building CFC to be the leading independent UK MGA, and we believe that through continued focus on industry-leading products, customer service, and innovation, CFC is poised for continued success.

"Our partnership with management will allow the company to build on recent success. We are delighted to partner with David and the broader management team and look forward to supporting them during the next phase of the company’s growth."

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