AnaCap books 4.5x on Simply Business

The exit follows the close of the firm’s third fund below target on €850 million.

UK-based AnaCap Financial Partners has agreed to sell insurance distributor Simply Business to New York-headquartered Aquiline Capital Partners in a deal understood to value the business at £120 million (€150 million; $172 million).

The sale, which is set to complete this summer, will generate a return of 4.5x for AnaCap’s investors.

Simply Business is a UK-based online commercial insurance broker targeting small and medium enterprises. AnaCap invested in the business in 2013 using capital from its 2009-vintage AnaCap Financial Partners II, which closed on €575 million, according to PEI Research & Analytics.

Today the company insures more than 350,000 businesses and landlords across the UK. Under AnaCap’s ownership, revenues have grown by 75 percent, with double-digit growth in new business policies and close to an 80 percent improvement in renewal rates, as well as a fivefold increase in EBITDA.

The exit follows the final close of AnaCap’s third fund, AnaCap Financial Partners III, in February on €850 million, below its initial target of €900 million. The vehicle came to market at the beginning of 2014, held a first close on €500 million in June 2014 and a further interim close on €700 million last summer.

Placement agent Asante Capital is understood to have helped AnaCap with the fundraise.

Earlier this month Aquiline closed its third fund, Aquiline Financial Services Fund III, on $1.1 billion, exceeding its $1 billion target, as reported by Private Equity International.

Investors in the fund include Oregon Public Employees' Retirement System and Oregon State Treasury, which invested in its previous vehicle, and Danish pension fund PKA AIP and asset manager Conning, according to PEI Research & Analytics.

This fund will follow Aquiline's strategy of investing in mid-market companies in the financial services sector, including banking and credit, insurance, investment management and markets, and financial technology and services businesses, it said at the time.

The sale is the latest in a string of successful exits for private equity firms in Europe, including Apax Partners’ sale of almost its entire remaining stake in London-listed online classifieds site Auto Trader, Synova’s 16.1x return on the sale of Kinapse, and Palamon Capital Partners’ 13x return on the sale of independent wealth manager Towry.

According to S&P Global Market Intelligence’s latest Private Equity Market Snapshot for EMEA, aggregate capital realised from EMEA-located exits reached €135.9 billion for 298 deals during the first quarter of 2016, compared to €44.9 billion for 313 deals in the same period in 2015.

However, 59 percent of this year’s figure was one deal, the sale of BG Group by Temasek Holdings and other investors for €80 billion. However, after netting out that outlier, capital realised grew 24 percent compared to 2015, S&P said.

The picture for EMEA entries is not so rosy. S&P noted a “drastic decline both in deal counts and capital deployed by global PE buyers into the EMEA region”.

Total allocation of capital by global firms dropped by 65 percent during the period of 1 January to 15 March, plummeting to €14.8 billion from €42.5 billion for the same period in 2015.

The number of new investments into EMEA-located targets fell by 15 percent compared to the same period in 2016, and the average entry deal size dropped from €69.1 million to €30.1 million, S&P said.

The only sub-regions which experienced a rise in aggregate transaction values were Southern Europe, up from €900 million to €3.2 billion, and the Middle East, which attracted €900 million of new capital, up from €400 million in the same period in 2015.