News & Analysis

Cinven has held a final close on €1.5 billion (about $1.5 billion) of a new buyout vehicle focusing exclusively on the financial services industry, the first fund of its kind for the London-based firm.

The Strategic Financials Fund will seek to invest in sectors including insurance, reinsurance, specialty finance and wealth management, among others.

Cinven has already made three acquisitions from the vehicle. It bought specialist insurer and reinsurance broker Miller in March of last year, alongside Singapore's sovereign wealth fund GIC. The following month, Cinven and British Columbia Investment Management Corporation acquired global legacy acquirer Compre, and in February, the firm agreed to buy life insurance provider International Financial Group.

2021 was a stand-out year for PE investments in financial services in Europe, according to a recent PitchBook analyst note. Since 2018, insurance has accounted for around a third of deals in the financial services sector, with investor appetite for insurance brokers intensifying to set a new annual record for deal count last year.

The highly fragmented insurance broker industry is particularly attractive due to its asset-light business models, recurring revenues and loyal customer bases. In many cases, PE investors are using a buy-and-build strategy, using one investment as a platform to make further acquisitions in the space.

Cinven's Miller deal falls into this category. Earlier this year, the broker acquired UK specialist sports insurance broker Henner Sports and Tokyo-based Lead Insurance Services. Similarly, PIB Group has made 16 add-ons since Apax Partners acquired a majority stake in the insurance advisory company from The Carlyle Group in 2021.

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