RFIB seeking new investor as private equity exit looms

Lloyd’s broker RFIB is searching for a new investor ahead of current private equity owner Fleming Family & Partners’ sale of its 38% stake.

The broker announced yesterday that it had appointed advisory firm Fenchurch to conduct a strategic review of its business to explore “the full range of options so as to enable the group to take maximum advantage of likely developments in the Lloyd’s and international insurance markets”.

Speaking to Insurance Times, RFIB chief executive Jonathan Turnbull said that Fenchurch is helping the company find a new financial backer that fits well with its strategic ambitions.

He said that Fleming had held its stake for more than seven years. “Private equity eventually wants to exit and now would probably be a timely point,” he said.

“They are not necessarily wanting to exit but we think that because we have sorted out the business, now is the time to think about bringing in extra capital.

“That [capital] could take out Fleming, but there is a need for further capital to build the business further.”

The search for new capital follows restructuring at RFIB, during which the company sold non-core businesses to sharpen its focus. This included converting its managing general agency, now known as Staple Hall Underwriting Services into a joint venture with Lloyd’s insurer Amlin and selling its US casualty and UK operations.

Turnbull did not give a timeframe for signing up a new investor, saying that the important thing was finding the right fit.

He said: “There are a lot of different types of capital provision and they need to fit with the management of the business. It is very normal for a business like this to go through a strategic review to understand what that should look like before starting trying to access the capital.”

Turnbull ruled out an outright sale of RFIB to a new owner, stressing that it was only seeking investment. He said: “We are looking at this as a way of refinancing because we have put a lot of hard work into setting this business up for the next stage of growth, and what we are looking for is the extra capital to take this forward.”

He added that RFIB, with an annual revenue of £41m, was “far too small” to contemplate a stock market listing. “There have been other smaller brokers who have gone down that route and I think it is a bit of a cul-de-sac.”