Hellman & Friedman (H&F) is seeking to raise at least US$1 billion (C$1.4 billion) in equity for Hub International Ltd. in a deal that could value the insurance brokerage at US$30 billion, Bloomberg reported, citing sources familiar with the matter.
The private equity firm is working with Morgan Stanley and Goldman Sachs on a liquid private placement, the sources said, requesting anonymity due to the confidential nature of the discussions. The fundraising could exceed US$1 billion, attracting interest from long-only institutions and limited partners in private equity funds, they said.
Private placements of this kind, sometimes referred to as private initial public offerings, have gained popularity as private equity firms look to extend ownership of high-performing assets while offering existing investors an opportunity to cash out, Bloomberg said. These transactions provide liquidity while allowing firms to maintain control of portfolio companies and expand their shareholder base.
H&F acquired Hub in 2013 at a $4.4 billion valuation. Since then, the brokerage’s value has increased significantly. In 2023, Hub raised $4.2 billion through its first liquid private placement, led by Los Angeles-based Leonard Green & Partners, which brought its valuation to $23 billion.
Investors in the latest placement are expected to have an opportunity to sell their holdings after 12 to 18 months, according to sources. Discussions are ongoing, and details of the deal could still change.
Hub was established in 1998 through the merger of multiple Canadian brokerages. The company has expanded through acquisitions and now operates across North America. Headquartered in Chicago, Illinois, Hub employs more than 19,000 people and ranks as the world’s fifth-largest insurance broker, according to its website.
The fundraising comes as H&F considers exit strategies for other long-held investments. The firm is reportedly interviewing banks for a potential listing of Verisure, a security company that could be valued between €25 billion and €28 billion, according to sources.
Representatives for H&F, Goldman Sachs, and Morgan Stanley declined to comment.
Hub International recently acquired Drayton Valley Insurance Agency for an undisclosed sum. The brokerage’s owner Dale Jones and his team joined Hub Prairies as part of the deal. Following completion, Drayton is now referred to as Drayton Valley Insurance Agency, a Hub International company.
