South African alternative asset management firm Calibrate Ventures has acquired a significant minority stake in the Garrun Group, a leading insurance brokerage in South Africa.
Commenting on Calibrate Venture’s first foray into the insurance market, CEO of Calibrate Vaughan Jones says the Garrun Group and the short-term intermediary space was an obvious investment choice. “The Garrun Group’s established history and reputation in the local insurance market, coupled with its scale and high-quality management team, made it an ideal target for us,” Jones explains.
Specialising in commercial, industrial, and personal insurance, the Garrun Group was established nearly 60 years ago and is one of South Africa’s largest independent insurance brokers, with regional representation throughout the local market.
Jones continues, “The group’s track record in acquiring and integrating brokers, its strong compliance and administrative capability, combined with Calibrate’s capital base and skill set, will ideally position the partnership to bring a much-needed value proposition to the short-term intermediary market. We have already identified several immediate opportunities, and have embarked on a rigorous programme to accelerate the Garrun Group’s growth strategy. This includes acquiring interests in intermediaries with similar profiles who are looking to augment or realise further value from their business.”
In partnership with established investment company Mahogany Private Equity, Calibrate has allocated R250 million in pursuing investment opportunities in the short-term, life insurance, wealth and investment sectors in sub-Saharan Africa. Mahogany, together with Hannover Re, is invested in specialist insurance investor Lireas Holdings.
Says CEO of Garrun Group Cliff Garrun, “It has been apparent for some time that the short-term insurance intermediary space would be facing a shortage of capital. This can be attributed to regulatory changes and many of the traditional suppliers of capital having exited the market. Acquisition has always been a core strategy of the Garrun Group, and with an ongoing drive towards consolidation within the industry, it became vital that we found a capital partner. With the Calibrate transaction, we have managed to secure a highly credible investor, but it has also given us access to a wealth of industry experience and capability from Vaughan and the Calibrate team,” Garrun concludes.