B.p Marsh Regulatory News (BPM)

Date: 19th July 2017

On behalf of: B.P. Marsh & Partners Plc

Immediate release

B.P. Marsh & Partners Plc

("B.P. Marsh", "the Company" or "the Group")

Investee Company Update - Nexus Underwriting Management Limited

B.P. Marsh & Partners Plc (AIM: BPM), the niche venture capital provider to early stage financial services businesses, is pleased to note that its investee company Nexus Underwriting Management Limited ("Nexus"), in which it holds an 18.6% shareholding, has announced that it has completed the acquisition of Zon Re Accident Reinsurance ("Zon Re"), a U.S. based Reinsurance Underwriting Agency. In 2016 Zon Re produced a Gross Written Premium of $14.3m, revenue of $3.77m and EBITDA of $2.69m. This acquisition was funded via a proportion of the previously announced £30m loan facility provided by the Company and HPS Capital Partners.

Zon Re has partnered with the largest and most respected insurance companies in the U.S., being Zurich, Liberty Mutual and Federal Insurance Company (Chubb & Son). Zon Re currently oversees a portfolio of approximately $15m in Gross Written Premium and has an average historical combined ratio of 68% delivering over $77m in underwriting profit to risk partners over the past 12 years.

Zon Re is a management owned Reinsurance Underwriting Manager founded in 2003 and is run by Kieron Farrelly (Executive Vice President and Chief Underwriter), Chris Holland (Vice President and Senior Underwriter) and Vern Ismen (Senior Vice President and Compliance, Claims and Contracts). 

Zon Re offers domestic and international reinsurance capacity in the accident reinsurance space, specifically for primary life, property & casualty and accident & health. This acquisition, based in New Jersey, is Nexus's first in the U.S., and adds Treaty Reinsurance as a new class within Nexus' business offering. 

Nexus underwrites a number of specialty products on behalf of underwriting partners that support its product offerings within the following lines of business: financial lines, trade credit, accident & health, surety, travel, property, latent defect, marine and cyber. This is the third and final of three currently planned acquisitions from Nexus, the first two being the marine cargo specialist Vectura Underwriting and the trade credit specialist Equinox Global, as has been reported by the Company over the past couple of weeks.

These acquisitions will increase Nexus's financial forecasts for 2017 as follows: Gross Written Premium will increase to a forecast of £160m, commission income to a forecast of £30m and EBITDA to a forecast in excess of £11m.

By way of background, since the Company's investment in 2014, Nexus has grown its Gross Written Premium income from £56m in 2014 (2017F: £160m), a forecast increase of 185%. In the same period, commission income has increased from £12.3m (2017F; £30m), a forecast increase of 143%, and EBITDA has increased from £2.6m (2017F: £11m), a forecast increase of 323%.

Nexus's Chairman Colin Thompson stated; "Following on from the successful conclusion of Nexus's capital raising process last week, Zon Re fits the model of profitable, proven, niche MGAs, that we plan to target with our "buy and build" strategy, which will deliver significant EBITDA and value to the Nexus group.

This is the third acquisition Nexus have exchanged on or completed in the past month, following the purchase of Equinox Global last week and Vectura Underwriting at the end of June. These acquisitions cement Nexus's position as a multi-product, multi-class, multi-geographic 'virtual' insurance company."

Daniel Topping, B.P. Marsh's Chief Investment Officer and the Company's nominee director on the Board of Nexus commented; "B.P. Marsh is pleased to see this round of M&A activity concluded, having provided the Loan Facility, alongside HPS Capital Partners, for these acquisitions to take place. From a revenue and profitability standpoint these acquisitions should prove to be transformational and we look forward to integrating them into Nexus's existing business".

For further information:

B.P. Marsh & Partners Plc www.bpmarsh.co.uk

Brian Marsh OBE / Camilla Kenyon +44 (0)20 7233 3112

Nominated Adviser & Broker

Panmure Gordon

Atholl Tweedie / Adam James / Charles Leigh-Pemberton +44 (0)20 7886 2500

Notes to Editors:

About B.P. Marsh & Partners Plc

B.P. Marsh's current portfolio contains fourteen companies. More detailed descriptions of the portfolio can be found at www.bpmarsh.co.uk.

Since formation over 25 years ago, the Company has assembled a management team with considerable experience both in the financial services sector and in managing private equity investments. Many of the directors have worked with each other in previous roles, and all have worked with each other for at least five years.

Prior to Brian Marsh's involvement in the Company, he spent many years in insurance broking and underwriting in Lloyd's as well as the London and overseas market. He has over 30 years' experience in building, buying and selling financial services businesses, particularly in the insurance sector.

Alice Foulk joined B.P. Marsh in September 2011 having started her career at a leading Life Assurance company. In 2014 she took over as Executive Assistant to the Chairman, running the Chairman's Office and established herself as a central part of the management team.

In February 2015 she was appointed as a Director of B.P. Marsh and a member of the Investment Committee. In January 2016 Alice was appointed Managing Director of B.P. Marsh.

In her position as Managing Director, Alice is responsible for the overall performance of the Company and monitoring the Company's overall progress towards achieving the objectives and goals of the Company, as set by the Board.

Dan Topping is the Chief Investment Officer of B. P. Marsh, having been appointed as a Director in 2011. He joined the Company in February 2007, following two years at an independent London accountancy practice. Dan is the Senior Executive with overall responsibility for the portfolio and investment strategy of B.P. Marsh.

Dan graduated from the University of Durham in 2005 and is a member of the Securities and Investment Institute and the Institute of Chartered Secretaries and Administrators.

Dan is a standing member of the B.P. Marsh Investment and Valuation Committees and currently serves as a Board Director across the portfolio.

Camilla Kenyon was appointed as Head of Investor Relations at B.P. Marsh in February 2009, having four years' prior experience with the Company. She was appointed to the main board in 2011. Camilla is Chair of the New Business Committee evaluating new investment opportunities. She has a number of nominee directorships over two investee companies and is a standing member of the Investment Committee. She is a Member of the Investor Relations Society.

Jonathan Newman is a Chartered Management Accountant and is the Group Director of Finance and has over 17 years' experience in the financial services industry. Jon graduated from the University of Sheffield with an honours degree in Business Studies and joined the Group in November 1999, following two years at Euler Trade Indemnity and two years at a Chartered Accountants. Jon is a Member of the Chartered Global Management Accountants, the Chartered Management Accountants and the Chartered Institute of Securities and Investment.

Jon was appointed a Director of B.P. Marsh & Company Limited in September 2001, and Group Finance Director in December 2003 and was instrumental in the admission of the Group to AIM in February 2006. Jon is a member of the B.P. Marsh Investment and Valuation Committees and currently serves as a Board Director for Walsingham Motor Insurance Limited, and provides senior financial support and advice to all companies within the Group's portfolio as well as evaluating new investment opportunities.

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