Willis Takes On Banks Seeking Asia M&A Under Walkiewicz, GuoSonali Basak
Willis Group Holdings Plc’s Rafal Walkiewicz and Michael Guo, who were promoted last week to lead the investment-banking operation, are focusing on Asia as they vie with Wall Street in advising insurance takeovers.
The co-chief executive officers are leading a staff of about 35 dealmakers who pair investors to insurance assets, they said in an interview. Walkiewicz joined the capital markets and advisory business at London-based Willis last year from Goldman Sachs Group Inc. and works in New York.
Willis, the third-largest insurance broker, hired Guo in 2013 from Boston Consulting Group to build operations in Asia. The company predicts opportunities for insurers from mature markets that are seeking to expand in the continent.
“We see Asia growing, and that is becoming more and more an important part of the business” for companies in the U.S. and Europe, Walkiewicz said. “There are investor groups and conglomerates that are trying to tap into this opportunity that insurance will create in China going forward.”
Asia-based insurers have also become eager to expand abroad, according to Willis. The advisory business also works with reinsurers in Korea and China and opened a Sydney office this year, said Guo, who is based in Hong Kong.
Willis advised Meadowbrook Insurance Group Inc. on its $433 million agreement in December to sell itself to Fosun International Ltd., the Chinese investment firm led by billionaire Chairman Guo Guangchang. Fosun purchased a stake in Bermuda-based Ironshore Inc. this year and has shown interest in OneBeacon Insurance Group Ltd., whose owner is exploring a sale, according to people familiar with the matter.
“The Meadowbrook-Fosun transaction is the first transaction for a Chinese company to buy a public insurance company in the U.S.,” Willis’s Guo said. “We do expect that to continue.”
Insurance dealmaking has accelerated globally as alternative investors like pension and hedge funds take weather-related risks, pressuring premium revenue at established firms. Also, low interest rates have squeezed investment income from bond portfolios.
Bermuda’s Endurance Specialty Holdings Ltd. announced a deal in March to buy Montpelier Re Holdings Ltd. for more than $1.7 billion in cash and stock. Brit Plc, based in London, said in February that it agreed sell itself to Canada’s Fairfax Financial Holdings Ltd. XL Group Plc, based in Dublin, agreed a month earlier to acquire Bermuda’s Catlin Group Ltd.
The Agnelli family’s investment company, Exor SpA, made a $6.4 billion unsolicited offer last week for PartnerRe Ltd. A deal would thwart PartnerRe’s merger announced in January with Axis Capital Holdings Ltd., that was meant to create the world’s fifth-largest property-casualty reinsurer.
The Exor offer is “an extension of the trend that you see with third-party capital entering insurance and reinsurance flows,” Walkiewicz said. “I think we’ll see more of that.”
Willis was the No. 22 adviser on insurance deals globally in the year through Friday, according to data compiled by Bloomberg. It’s ahead of companies including Jefferies Group LLC and Moelis & Co. Goldman Sachs had the top spot and Morgan Stanley was second.
“We compete with bulge brackets, and we compete with boutiques” that have groups from different regions cooperating on deals, Walkiewicz said. Willis is different because “it’s one global team” with a focus on insurance, he said.
Willis’s main business helps commercial clients buy coverage guarding against property damage or liabilities, giving the company access to information about global insurance markets. Walkiewicz and Guo’s unit also advises on transactions including catastrophe bonds, the securities where returns are related to events such as storms or hurricanes.
The pair replaced Tony Ursano, who left Willis and joined TigerRisk Partners, a firm that specializes in reinsurance brokerage and capital management.