Insurtech-focused UK SPAC targets £150m IPO. Aeolus’ Aditya Dutt part of sponsor team

Financial Acquisition Corp, a new special purpose acquisition company (SPAC) sponsored by FINSAC LLC which plans to raise £150 million through its listing on the London Stock Exchange (LSE), has named experienced ILS practitioner, Aditya Dutt, as part of the sponsor team of the vehicle.

FINSAC is a limited liability partnership founded by Will Allen, formerly of investment bank KBW and Andy Rear, a former Munich Re executive.

Rumours circulated last week that the pair were set to launch a new SPAC on the LSE, which would target a merger with a leading name in the insurance industry.

Today, FINSAC has confirmed its intentions for Financial Acquisition Corp to float on the LSE, with plans to raise £150 million through the listing.

An announcement on the planned listing also confirms that the company is, “targeting a Business Combination with a technology-enabled company or business which is likely to operate in (or adjacent to) the insurance or broader financial services industry.”

As well as being founded by Allen and Rear, who bring extensive experience as senior executives in insurance and financial services, FINSAC is supported by institutional and strategic investors, and also industry experts, including Dutt and Dominic Christian, Global Chairman of Reinsurance Solutions at Aon.

Dutt serves as the President of Aeolus Capital Management, a Bermuda-based reinsurance and insurance-linked securities (ILS) focused investment fund manager, having joined from RenaissanceRe in 2020.

With Dutt forming part of the sponsor team of the new vehicle, his experience in ILS and third-party capital could suggest the SPAC may look to companies leveraging alternative capital for its acquisition. But either way, the sponsor team of the SPAC has embedded ILS market expertise and can tap into the Aeolus knowledge-base as well, via Dutt.

Alongside Dutt and Christian, the sponsor team includes cornerstone investors, Toscafund Asset Management LLP and Empyrean Capital Overseas Master Fund Ltd., and strategic investor Ventura Capital GP Limited.

Allen, CEO of Financial Acquisition Corp, commented: “We are delighted to launch the first UK SPAC that will be focused on the rapidly growing Insurtech industry. Technology has transformed every facet of daily life and ambitious tech-enabled insurers are driving this growth as they disrupt traditional markets. Much of this transformation currently stems from private investments and we believe now is the right time to bring these next generation companies to the public market in London – the natural home of insurance.”

Rear, Executive Chairman of the SPAC, said: “Through the industry expertise and skill set of the management, board and sponsor team, the Company believes it can identify and help bring to the public market high quality Insurtech companies with the ambition to grow and significantly enhance the long-term value of their businesses as a listed company. Our combined global network and track record in insurance give us confidence that we will attract ideal targets in the space and we look forward to bringing a partnership to market soon.”

Supporting Allen and Rear, Paul Jardine will serve as a Senior Independent Non-Executive Director of the company, while Nic Gorey, Shobha Frey, and David Morant will all serve as Independent Non-Executive Directors.

Financial Acquisition Corp is the latest SPAC vehicle with a focus on the insurance and reinsurance market, but the first UK SPAC to focus on the insurtech sector.

The company says that the firms being considered for a merger “must have the potential for sustainable advantage beyond short-term growth, significant bottom-line growth, a strong management team with a solid track record of value creation who are ready for public markets, as well as operating in parts of the insurance value chain where technology offers a structural operating and/or distribution advantage.”

A SPAC, also known as a blank check company, offer investors a means to back managers with specific re/insurance sector expertise on unknown acquisitions and combinations, which can return significant multiples.