By Pablo Mayo Cerqueiro, Echo Wang and David French
LONDON/NEW YORK Accelerant is planning to raise fresh capital next year in a deal that could result in the specialty insurance provider making its debut on the stock market, its CEO and co-founder told Reuters on Monday.
The Cayman Islands-based group, which counts sports financier Todd Boehly's investment company among its backers, raised $150 million in December from investors to fund the rollout of an insurance exchange, valuing it at $2.4 billion, Accelerant Chief Executive Jeff Radke said.
It expects the cash to carry it into 2024 before it needs to tap investors again, although the timeline may be brought forward if growth opportunities come about, he said.
Accelerant is weighing whether to secure the extra funds through a private share sale or an initial public offering (IPO) in New York, the executive said, without giving a specific fundraising target.
No final decisions have been made, and banks have not yet been formally appointed to structure a deal, Radke added. The company's institutional shareholders did not reply to requests for comment.
Accelerant connects risk underwriters with reinsurers and institutional investors. It takes payment from capital providers and helps them manage their portfolio of underwriters.
Founded in 2018, the group has grown rapidly with the backing of its majority shareholder Altamont Capital Partners, drawing in other investors along the way, including Boehly's investment company Eldridge and MassMutual's private equity arm Barings.
Other firms in the industry have been looking to capitalise on rising prices for commercial insurance and reinsurance to attract new investors.
Skyward Specialty and Fidelis Insurance Holdings have completed IPOs in New York since January, while French company AXA is considering carving out its reinsurance arm XL Re, Reuters reported earlier this month.
However, markets are just starting to warm up to new entrants after soaring interest rates all but froze IPO activity last year.
Equally, investors have shown a preference in recent months for companies with a profitable track record over the promise of high growth.
Portfolio rotation prompted by soaring debt costs sent growth-focused stocks on a dive last year. While this spilled into the private markets, Accelerant has been able to maintain its valuation in its fundraising efforts.
The group is on track to post around $2 billion of insurance premiums this year and positive earnings before interest, tax, depreciation and amortization (EBITDA), Radke said.
Trade publication Inside P&C reported on Accelerant's IPO ambitions earlier this month, citing sources.
(Reporting by Pablo Mayo Cerqueiro in London, and Echo Wang and David French in New York; Editing by John O'Donnell and Matthew Lewis)
