Besso aims to double revenue over 3-5 years

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New owners see growth prospects following buy-out

Broking group Besso is aiming to boost revenues to as much as £50m over the next three to five years now it is majority owned by management.

Michael Wade, who has become the broker’s new executive chairman following his purchase of a 15% stake in Besso at the end of last week, said: “Given the current operating framework of Besso, a growth of £25m to £50m would not put a strain on the operational side. That is the growth opportunity and therefore the business opportunity.”

He added that achieving such a growth over three to five years “seems perfectly reasonable given the market conditions”.

Besso reported revenues from continuing operations of £27.9m for 2009.

Wade, private equity firm BP Marsh and BP Marsh chairman Brian Marsh collectively bought the 37.3% stake owned by US bank Wells Fargo. The stake originally belonged to Wachovia, one of Besso’s biggest clients, which Wells Fargo acquired in 2008. Besso lost Wachovia as a client in 2009.

As part of the transaction, BP Marsh increased its existing Besso stake to 34% from 22.7%, while Brian Marsh Enterprises, controlled by Brian Marsh, bought a further 11.3%. The balance is owned by management.

Following the transaction, Wade replaced Marsh as executive chairman of Besso. The rest of Besso’s existing management team, including chief executive Colin Bird and executive director Colin Marshall, have remained in place.

“Given the departure of Wells Fargo as a shareholder, with the current management team of Colin Bird, Colin Marshall and the operating committee we have got high hopes for Besso to develop even further,” said BP Marsh director Daniel Topping, also a director of Besso.

Commenting on his reasons for taking a stake in Besso, Wade added: “The key management team and the producers are excellent at what they do. The operating side of the company is very much in the hands of the next generation and they are an exciting team to work with. It seemed to be an obvious team to release, get back onto its front foot and develop its organic business.”

In addition to organic growth, Wade said Besso will look at hiring individuals and teams of people, as well as acquisitions, although he added: “It is more likely to be teams and individuals than acquisitions.”

One particular area ripe for expansion, according to Wade, is Besso’s reinsurance business. “We are definitely underweight in reinsurance and we really want to develop and build that,” he said.

Wade and Brian Marsh Enterprises paid £1.7m for their combined 26.3% stake in Besso. This means Wade paid £977,550 and Brian Marsh Enterprises £737,450 for their respective 15% and 11.3% shareholdings. BP Marsh paid £735,000 for its additional 11.3% stake.

In addition to his equity stake, Michael Wade also subscribed for £1m in Besso loan stock. Brain Marsh Enterprises subscribed for £765,000-worth of loan stock and BP Marsh £2.5m.

Besso’s new and old shareholder structure at a glance

New structure