Venture capital provider BP Marsh is reporting that the majority of its portfolio companies have performed well in the first six months of the year.
The firm said its full-year results to 31 January 2022 showed an increase in Net Asset Value to £166.6m (31 January 2021: £149.9m; 31 July 2021: £155.0m). This represented an 11.7% shareholder return (including the payment of a dividend) in the financial year.
On 29 July 2022, it said it had paid a dividend of £1m (2.78p per share), for the year ending 31 January 2022. This represented a 13.9% increase over the dividend paid in respect of the previous year.
In a statement, BP Marsh singled out a number of its investee companies, saying that both Kentro and XPT were continuing on strong growth trajectories. The former achieved GWP of around £368m in the financial year that concluded at the end of December and was on track to increase this to over £450m by the end of this year.
It said that XPT, meanwhile, had achieved GWP of around $400m by the end of last year, predicting that this figure would go past $500m in 2022.
BP Marsh spoke about its various investments and acquisitions. It wrote: “In addition, as previously announced, in June 2022 the Group invested a further US$3.5m (£2.8m) in XPT, of which US$2.8m was in redeemable shares and US$0.7m in equity, increasing B.P. Marsh’s shareholding in XPT from 28.18% to 29.15%. This additional investment was raised to repay US$1.5m of loan funding from Madison Capital, and for future deferred consideration payments.”
It added: “During the Period, the Group completed its transaction regarding the disposal of its Spanish business, Summa Insurance Brokerage S.L. to Acrisure España S.L., part of Acrisure LLC, the global financial services business, realising total cash proceeds of £9.6m. Additionally, the Group completed an investment in Denison and Partners Limited (“Denison”). The Group acquired a 40% Cumulative Preferred Ordinary shareholding in Denison, a start-up London-based Lloyd’s Insurance Broker, established by Alasdair Ritchie, a market veteran with over 40 years of experience in the Insurance Market.”
On the wider market, BP Marsh said that while the pace of recent rate increases has slowed, it does not anticipate the market going back to pricing of the last soft market in the short to medium term.
It wrote: “With the ongoing conflict in Ukraine, the Group has considered its direct exposure and remains of the view that the business and its underlying investee companies should not be materially adversely affected by the global sanctions in respect of Russia. The Group acknowledges, however, the various macro challenges facing the world economy. These include higher inflation, increased interest rates, political uncertainty and heightened risks of recession across each of the territories in which the Group’s portfolio companies operate.”
It went on: “It is not yet fully known how these challenges will affect the insurance market. The Group continues to maintain its disciplined approach against this uncertain backdrop. However, it is believed that increased costs will at least be matched by an increase in premium rates in the short-to-medium term.”
