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Electra Partners generates 3x return on esure investment

Electra Private Equity has reported an uplift in its diluted net asset value per share of 33p as a result of the successful IPO of UK motor insurer esure, its third largest investment at 30 September 2012.

 
In 2010, Electra invested GBP30m (via the Tosca Penta Investments LP fund) in the management buyout of esure from Lloyds Banking Group, led by Peter Wood, founder and executive chairman of esure. GBP15.3m of Electra’s original investment had been repaid prior to the IPO.
 
As a result of esure’s IPO, Electra is due to receive further cash proceeds of GBP51.5m. In addition, Electra (via its holding in the Tosca Penta Investments LP fund) will hold 6.19 million ordinary shares in esure which, at the IPO price, had a valuation of GBP17.9m.
 
Including income, this investment has generated a gross return of 3x original cost for Electra; an IRR of 48 per cent.
 
Tim Syder, deputy managing partner at Electra Partners, says: “esure has been an excellent investment for Electra Partners. At the time of the MBO in 2010, it was clear we were backing an entrepreneur with a proven track record and investing in a business with highly recognisable brands at what appeared to be a favourable point in the insurance cycle. The success of the IPO is strong testament to Peter and his team in developing the business over the last three years.
 
“esure is a good example of what we are keen to do: support companies that are able to prosper from the benefits of independent ownership and a fully motivated management team.”
 
This follows a busy start to 2013 for Electra Partners in which it has made two major investments: a GBP114m binding offer to acquire a portfolio of UBM’s data services businesses and a GBP56m investment in a portfolio of five secondary private equity funds.

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