Melior Equity Partners was founded in 2019 by Jonathan Cosgrave and Peter Garvey
ALTERNATIVE capital provider Duke Royalty has exited its investment in Irish niche insurer BHPC, which trades as BHP Insurance.
The exit comes as BHP said it has agreed to acquire Dublin-based Keegan Meredith & Williams Insurance (KMW) on foot of a “significant investment” in BHPC by Irish private equity firm Melior Equity Partners.
BHP also intends to make additional acquisitions in the Irish market.
Melior was founded in 2019 by Jonathan Cosgrave and Peter Garvey.
They previously co-headed the management of the Carlyle Cardinal Ireland Fund, a €292m private equity fund directed at Irish investments, for The Carlyle Group.
BHP provides insurance cover to the not-for-profit sector, including social housing groups, tidy towns and sports associations. It has about 5,000 clients across the country.
UK-based Duke Royalty said it received net cash of £6.9m (€8.1m) for its investment in BHP Insurance, representing a near 30pc internal rate of return. It’s the highest realised return ever for Duke Royalty.
The UK firm first invested in BHPC in 2018, providing €4.6m to help bankroll a buy-out of the Irish insurer by its management team.
That gave Duke Royalty a 10.5pc stake in the Dublin firm, whose managing director is Martina Westphal.
Ms Westphal led the buyout of BHP Insurance’s not-for-profit business. It formed the largest part of the BHP group’s activities.
BHPC’s accounts for the financial year to the end of April 2020 show that it generated turnover of €2.9m that year, and a €1.6m pre-tax profit.
Last December, Duke Royalty provided a follow-on investment of €1.1m in BHPC.
Ms Westphal said yesterday that the acquisition of the Keegan Meredith & Williams business is a “strategic step” for BHP Insurance and that it would enable the group to expand the range of products and services it can offer.
“We are particularly pleased to have received investment from Melior Equity Partners, a local, Irish private equity firm managed by a team that has an in-depth understanding of the insurance broking sector having previously led a successful investment in the AA Ireland,” she added.
Ms Westphal began her career with AA Ireland in 2003 and eventually joined BHP in 2007.
John Williams, the managing director of KMW, will remain with the business.
The investment in BHP by Melior Equity Partners was the first from the firm’s Melior Equity Partners Fund II.
“KMW is the first of many acquisitions that BHP is seeking to make,” said Melior investment director Esmond Greene.
“We are in discussions with a number of small and mid-sized brokers who appear excited about coming together with an Irish owned platform,” he added.