The majority of the Munich-based company Fonds Finanz will be taken over by the British private equity company HG Capital. With 28,000 affiliated insurance brokers, Fonds Finanz is one of the largest so-called broker pools in the German market.
HG Capital buys 60 percent of Fonds Finanz. The two companies did not want to comment on this. The founders Norbert Porazik and Markus Kiener remain on board as minority owners and managing directors of the broker pool. The purchase price should amount to almost 200 million euros. In return, the majority is not only sold to Fonds Finanz, but also to a number of IT and support companies that Porazik and Kiener directly own. The deal is expected to be implemented on January 1, 2022.
Fonds Finanz is largely unknown to end customers; they practically never have anything to do with broker pools. But anyone who organizes their insurance through a broker who takes out car or home insurance for them is likely to be indirectly involved.
Because most brokers have organized their organizational and technical connection to the insurer via a pool. The insurers would not conclude any agreements with many individual brokers, that would be far too time-consuming. As pool members, you have the connection. The customer’s motor vehicle contract is placed with an insurer via the pool system, for which the pool receives a share of the commission.
In addition, pools such as funds provide financial comparison systems with which brokers can compare the various offers in the individual sectors. These comparisons are important: Without them, brokers could easily hold themselves liable for incorrect advice if a contract turns out to be unfavorable for the customer.
All forms of insurance sales are sought after by investors because they promise high regular income through commission income. These commissions are always paid by the customers.
The buyer HG Capital manages around 40 billion dollars (35.4 billion euros) and employs around 180 people in offices in London, Munich and New York. The HG funds have interests in 35 companies with 55,000 employees, valued at $ 92 billion. The company prides itself on investing primarily in companies that create meaningful change.
Insurance intermediaries play a major role in this. The company has a stake of around 20 percent in the British broker Howden and finances the Hamburg-based GGW Holding, in which managing director Tobias Warweg has now bundled at least 17 acquired brokerage companies.
HG Capital has big plans with Fonds Finanz. Apparently the Munich company is supposed to form the basis for a “European super pool”. In the next step, the company will acquire a number of competitors in Germany, according to industry circles.
Founded in 1996, Fonds Finanz achieved sales of 178 million euros in 2019 and a pre-tax profit of seven million euros. It has 420 employees and 150 regional directors.