NEWS
Bullish despite M&A slowdown
There is more negotiation around getting the deals done than there was last year: Liberty GTS.
On the back of hiring three experienced underwriters in October, Liberty Global Transaction Solutions (GTS) is bullish on its potential in the Asia-Pacific region. But, while the potential is great, deals are taking longer to get done, having an impact on deal flow, Will Lewis, head of Asia-Pacific for GTS, told SIRC Today.
“Last year was a very big year for M&A globally and this year has been pretty good as well. There was a slowdown in the second quarter, but it looks like the fourth quarter is picking up. This issue is more buyers and sellers taking longer to conclude the price. There is more negotiation around getting the deals done than there was, say, last year,” Lewis said.
In early October the division, part of Liberty Mutual’s Insurance Global Risk Solutions Division, hired Damian Ng, Sanjeve Prakasam, and Alexandra Culas for roles in Singapore and Sydney, Australia. Ng and Prakasam are underwriters for the Singapore business, focusing on M&A insurance. Culas focuses on the same areas working from Sydney.
Lewis says the business, which writes a mixture of warranty and indemnity insurance, tax risk insurance and contingent risk insurance in the region, sees opportunity in certain sectors: healthcare, and construction to name but two. But the business is dependent on wider M&A trends, which it tracks carefully.
“We want to raise our profile and partner with our broker friends.”
Will Lewis, Liberty GTS
“It’s a non-renewable business, so we follow the trends of what’s happening in M&A. We are following submission levels quite closely so we saw a tail-off in the second quarter. They are picking up again, so we’re hoping they will take us through into next year in good shape. But deals are taking longer to happen,” he said.
Lewis hopes the new hires will bring sustainability to the business. “We want to recruit the best people we can, when we can. There is a lot of potential in Asia because penetration levels in the region are not necessarily as high as they could be. We want to raise our profile and partner with our broker friends as we continue to expand. But we have a strong growth story to take through into next year and beyond.
“They all bring with them significant M&A underwriting experience and will be a fantastic addition to the team as we continue to expand our business across the region to help protect our customers from the complex risks they face in today’s M&A market.”
In terms of discussion points at SIRC, Lewis believes the increasing difficulty of raising capital and securing leverage will be on the agenda, as will the consequence of that extending deal timelines. He adds that there are some new players in the market, leading to an element of fragmentation.
Main image: Shutterstock / Inked Pixels
