Non-life insurance, reinsurance legacy and run-off acquisition and management, and investments specialist Randall & Quilter Investment Holdings Ltd. is seeking to raise close to £50 million in order to fund future growth.
The capital raise will feature a £45 million placement of new ordinary shares with institutional shareholders and Directors, as well as £4.3 million through an open offer of new ordinary shares to Qualifying Shareholders.
Ken Randall, Group Chairman and Chief Executive Officer of the firm, commented on the capital raise and the prospects for R&Q; “We are delighted to have gained support for this capital raise to fund the significant growth opportunities ahead for the Group in our core activities of legacy acquisition activity and the writing of programme business on behalf of reinsurers.
“We thank our major existing shareholders for their continued support and are pleased to welcome a number of new shareholders onto our register. We have provided the open offer element to enable our smaller and non-institutional shareholders to participate on equal terms.
“We believe this capital raise will represent a step change in the Group’s profile, providing enhanced access to quality business through balance sheet strength. The significant opportunities available to the Group in both of our core operations are now able to be fully harnessed and we look forward to the future with added confidence.”
R&Q also announced some impending senior leadership changes, with CEO Ken Randall set to step down and become Executive Chairman in the summer of 2018.
At that time, CFO Tom Booth is expected to become Group CEO and a new CFO will be appointed. It’s also expected that Alan Quilter will step down from the COO role and become Deputy Chairman, with a new COO being sought to replace him.
Randall & Quilter aims to grow its core legacy acquisition activities, a market where there is considerable opportunity currently, as well as increase its fee income earned through its Accredited subsidiary and R&Q Insurance (Malta) through the underwriting of MGA and programme business, largely for well-rated reinsurance companies.
The company sees opportunities currently due to a number of factors, including regulatory changes impacting large underwriters globally, macroeconomic effects, Brexit and the separation of distribution from underwriting capital.
The capital raise will be used to put a £30 million capital contribution into R&Q Insurance Malta to grow its balance sheet and gain an A- rating, and a $25 million capital contribution to Accredited, putting it into the size ‘7’ category (defined as vehicles with $50 million to $100 million of net assets), which opens up larger loss portfolio transfer opportunities and programme business for the firm.
It’s a strong move from Randall & Quilter in a market that is highly competitive, but the additional capital will help the firm to grow its core legacy business and expand more quickly into fee driven business, where by it can put its underwriting expertise to work for other reinsurance capital providers.