The London-listed SPAC is launching the investment vehicle Lloyd’s of London
The London-listed SPAC is launching the investment vehicle Lloyd’s of London
- Financials Acquisition revealed it had set up London Innovation Underwriters
- SPACs are blank check companies created specifically to raise capital through an initial public offering
A dedicated acquisition company has launched a new listed company offering investors access to the Lloyd’s of London insurance market.
Financials Acquisition revealed it has formed London Innovation Underwriters (LIU), with which it plans to merge to raise significant amounts of capital through a listing on the UK stock exchange.
It believes the combination would create an “efficient vehicle” that allows investors to build exposure to the market without having to make goodwill payments or create additional fee structures.
Fine: Financials takeover revealed it had created London Innovation Underwriters (LIU), a vehicle intended to give investors access to the Lloyd’s of London insurance market
LIU plans to access Lloyd’s insurance marketplace through London Bridge 2, a platform that makes it easier for participants to interact with insurance-related securities investors.
Financials expect that upon completion of the merger, LIU will have sufficient capital to support up to £1 billion of capacity.
SPACs are blank check firms formed specifically to raise capital through an initial public offering with the intention of purchasing another company.
They flourished during the height of the Covid-19 pandemic, especially in the US, as companies sought a way to go public in a faster and cheaper way.
However, their popularity began to decline in 2022 after a wave of high-profile bankruptcies, rising interest rates and economic uncertainty.
Will Allen, CEO and co-founder of Financials Acquisition, said: “We believe LIU will provide investors with a unique opportunity to gain efficient access and diversified exposure to the Lloyd’s market with liquidity.
“We are pleased with the initial response we have received from both investors and underwriters and look forward to the next phase of the transaction.”
Allen, a former director of investment bank KBW, co-founded Rear Financials with former Munich Re director Andy last year through a partnership vehicle called Finsac.
Financials’ announcement comes a day after Lloyd’s reported pre-tax profits of £3.9 billion for the first six months of 2023, after posting a £1.8 billion loss in the same period last year.
Profits were driven by solid investment returns and underwriting profits more than doubling to £2.5 billion, thanks to a reduction in the number of major loss events.
Gross written premiums rose 22 percent to £29.3 billion due to rising prices and growth of both new and existing syndicates.
John O’Neal, CEO of Lloyd’s, said the results “demonstrate that we are now delivering consistent improvements in profitability and the ability to grow sustainably. This performance puts us in a strong position for the second half of the year.”