Randall & Quilter Investment Holdings has announced $100 million of new equity investment by way of:
- An $80 million subscription by Bricknell Insurance Holdings, an investment vehicle controlled by 777 Partners, for a new series of preferred stock issued by R&Q subsidiary Randall & Quilter PS Holdings, which are exchangeable (subject to certain terms and conditions) for ordinary shares in the capital of the company.
- A $20 million subscription by funds managed by Hudson Structured Capital Management for 11,902,318 new ordinary shares.
Proceeds of the investment will be used to invest in the growth of R&Q’s program management and legacy businesses, the company said.
“We are extremely pleased to have raised these funds,” R&Q executive directors Ken Randall, Alan Quilter and William Spiegel said in a statement. “We have long been clear on the significant opportunities we see for the group in the two fast-growing markets we operate in: program management and legacy. It has become apparent that the market dislocation currently being experienced will only increase demand for these specialist capabilities as the balance sheets of traditional insurance companies come under increased strain. The equity we have secured will enable us to proactively and quickly move to capitalize on these dynamics as the market seeks the solutions R&Q is able to provide.”
Randall, Quilter and Spiegel said that they believed that the COVID-19 pandemic would have “a limited impact” on R&Q’s existing business.
“While there will be some near-term delay in completing transactions, we believe the impact of the pandemic on the wider insurance industry will create considerable future opportunity for the group,” they said. “Our existing legacy books have limited exposure to unexpired risk, our program management portfolios are largely reinsured with highly rated counterparties, and our investment portfolio has an average duration of two years with approximately 92% of our investments rated BBB or better, of which approximately 51% is in government bonds and cash. Our conservative investment portfolio has resulted in net unrealized losses of only 1.4% as of April 22, 2020.”