Private equity firms are paying high prices for well-managed wholesale brokerages and managing general agencies, but that doesn't mean they are a quick or easy way out of the business for retiring specialty producers, merger and acquisition experts warned.
"Private equity is not necessarily an exit," said John Kraska, managing director for Hales & Company in New York, who intermediates and assists in transactions between brokers looking to sell their businesses and potential buyers.
Brokers often begin discussions with him saying, "I hear private equity pays a lot. Should I sell to private equity?" he reported, going on to reveal that what private equity firms really provide for specialty brokers is not an immediate solution to a broker without a succession plan but partial liquidity for business growth at the time of the deal, he said.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
