H&F Explores Exit Options for Hub International, Eyes $30 Billion Valuation
Private equity firm Hellman & Friedman (H&F) is reportedly seeking to raise at least US$1 billion in equity for Hub International Ltd., a move that could value the insurance brokerage at a substantial US$30 billion. Bloomberg reported on this development, citing sources familiar with the matter. This fundraising strategy may open the door to different exit options for the investment.
The sources, who requested anonymity due to the confidential nature of the discussions, indicated that H&F is collaborating with Morgan Stanley and Goldman Sachs on a liquid private placement. The fundraising initiative could potentially exceed US$1 billion, attracting interest from long-only institutions and limited partners in private equity funds. These placements, sometimes termed private initial public offerings, have become more common as private equity firms seek to extend ownership of high-performing assets while providing existing investors with an opportunity to cash out.
These transactions afford liquidity while enabling firms to retain control of portfolio companies and broaden their shareholder base. H&F acquired Hub International in 2013 with a valuation of $4.4 billion. Since then, the brokerage’s value has increased significantly. In 2023, Hub raised $4.2 billion via its first liquid private placement, which was led by Leonard Green & Partners of Los Angeles, raising its valuation to $23 billion.
According to sources familiar with the latest placement, investors are expected to have an opportunity to sell their holdings within 12 to 18 months. Discussions are ongoing, and the deal’s details could still be subject to change.
Hub International was initially established in 1998 through a merger of multiple Canadian brokerages. The company has expanded its footprint through a series of acquisitions and now operates across North America. With its headquarters in Chicago, Illinois, Hub International employs over 19,000 people and is the world’s fifth-largest insurance broker, according to its website.
Furthermore, the fundraising initiative comes while H&F is considering potential exit strategies for other long-held investments. According to sources, the firm is interviewing banks for the potential listing of Verisure, a security company that potentially holds a value between €25 billion and €28 billion.
Representatives from H&F, Goldman Sachs, and Morgan Stanley have declined to provide comment at this time.
Hub International recently acquired Drayton Valley Insurance Agency for an undisclosed price. As part of the transaction, the agency’s owner, Dale Jones, along with his team, joined Hub Prairies. Post-completion, Drayton Valley Insurance Agency is now referred to as a Hub International company.
