Hellman & Friedman is looking to raise at least $1 billion in equity from investors for Hub International Ltd., in a potential deal valuing the insurance brokerage at $30 billion, according to people familiar with the matter.
The private equity firm is working with Morgan Stanley and Goldman Sachs Group Inc. on the so-called liquid private placement, the people said, asking not to be identified discussing confidential information. The firm could end up raising more than $1 billion from a range of investors including long-only institutions and limited partners in private equity funds, they said.
Such transactions, sometimes referred to as private initial public offerings, have been gaining traction as buyout firms look to hold onto their best-performing assets for longer, while also allowing their limited partners to cash out.
Private equity firms are turning to more innovative solutions to generate liquidity for investors as the overall dealmaking environment remains challenging. These deals help buyout firms keep control of their portfolio companies while also broadening the shareholder base and providing regular liquidity windows.
Hub’s valuation has grown significantly since H&F acquired the business in 2013 at $4.4 billion valuation. In 2023, Hub raised $4.2 billion in its first liquid private placement led by Los Angeles-based Leonard Green & Partners, the people said. That fundraising took the insurance broker’s valuation to $23 billion.
H&F plans to give investors in this latest placement an opportunity to sell after 12 to 18 months, according to the people. Deliberations are ongoing and details of the potential deal could still change, the people said.
Read More: Private Equity’s $3 Trillion Burden Sparks Hunt for Exit Options
Hub was formed in 1998 when a number of Canadian brokerages merged. The company has since made multiple acquisitions and expanded operations into the US. Chicago, Illinois-based Hub now has more than 19,000 employees across North America and is ranked as the world’s fifth largest insurance broker, according to its website.
H&F is also mulling exit options for another long-held investment as it’s interviewing banks for a listing of Verisure, Bloomberg News reported last week. A deal could value the security group at €25 billion to €28 billion, the people said.
Representatives for H&F, Goldman Sachs and Morgan Stanley declined to comment.
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