Portfolio Update

30^th April 2020 

B.P. Marsh & Partners Plc 

("B.P. Marsh", "the Company" or "the Group") 

Portfolio Update

Repayment of Loan:

B.P. Marsh (AIM: BPM), the specialist investor in early stage financial services businesses, is pleased to note the recent receipt of a £2m Loan Repayment from Nexus Underwriting Management Limited ("Nexus").

The Company provided Nexus with a £2m Revolving Credit Facility in April 2019 (the "Loan Facility") as part of a wider £16m fundraising exercise, alongside the global investment firm HPS Investment Partners LLC. This was undertaken in order to provide Nexus with sufficient capital to pursue its growth strategy via value accretive acquisitions.

The Loan Facility was drawn down in full and has now been repaid by Nexus, eight months earlier than the scheduled repayment date. The Loan Facility will remain in place until December 2020.

The Loan Facility is in addition to a further £4m facility that the Group provided to Nexus in July 2017, which is due for repayment by January 2024.

The Group holds an aggregate Nexus shareholding of 17.6%, having bought an initial shareholding of 5% in August 2014. Since the Group's initial investment, Nexus has become one of the largest independently owned Managing General Agencies in the UK insurance market, growing from approximately £50m of premium income in 2014 to a budgeted £345m of premium income in 2020. This premium income is generated across various specialty areas including Financial Lines, Reinsurance, Trade Credit, Marine and Aviation insurance.

When the Group made its first investment in Nexus, it was operating one London office. Nexus now has offices in 9 countries across Europe, America and Asia.

In addition, on 9^th  March 2020 Nexus announced that its independent broking arm, Xenia Broking Group Limited ("Xenia"), completed the acquisition of the trade credit business of Howden UK Group Limited ("Howden"), part of Hyperion Insurance Group Ltd. Xenia will integrate Howden's trade credit business with its existing trade credit broking operations, making it one of the largest independent trade credit insurance brokers in the UK.

Chief Investment Officer, Daniel Topping, commented on the repayment: "Given the unprecedented challenges currently faced by the UK and Global economies, it is testament to the strength of Nexus, its management and entire team that it is able, not only to continue to pursue its growth strategy via the acquisition of Howden's trade credit business, but also that it is able to access funding on commercially favourable terms.

"Nexus is not immune to the impact of Covid-19, but the Group has been pleased by the response of everyone at Nexus to adapt to these challenges and work towards solidifying the long-term strength of Nexus. At B.P. Marsh we have been pleased to see this approach replicated throughout our portfolio. Whilst it is currently difficult to provide long-term impact forecasts, we believe the approach taken by our portfolio's management teams has been sensible and proportionate, and underpins our long-term partnership-led approach to investment."

Covid-19:

B.P. Marsh continues to monitor closely the ongoing impact of the current Covid-19 pandemic. Whilst it is too early to predict with any accuracy the long-term impact, the Group's management team is working closely with each portfolio company and its management to ensure that each of them is well positioned to mitigate the short term impact of this situation.

At this juncture, the Group believes each portfolio company is adequately resourced to weather the challenges currently presented by Covid-19. The Group is focussed on cash flow and considers that it has sufficient resources available, including the £2m loan repayment from Nexus, together with access to a £3m loan facility, to support investee companies if necessary. 

We continue to operate effectively, with all management and employees working remotely. This shift in our working arrangements has not presented any significant challenges, as the team was already in the habit of liaising with portfolio companies across multiple locations and time zones. Our portfolio companies have also implemented remote working arrangements and have demonstrated that earlier investment into systems and business continuity plans have enabled these arrangements to be implemented with minimal impact.

Annual Results:

B.P. Marsh anticipates that it will publish its Annual Results on 9^th June 2020 as previously announced. The Group will provide a further update on the impact of Covid-19 within the Annual Results. 

Notes to Editors: 

B.P. Marsh's current portfolio contains seventeen companies. More detailed descriptions of the portfolio can be found at www.bpmarsh.co.uk. 

Since formation over 25 years ago, the Company has assembled a management team with considerable experience both in the financial services sector and in managing private equity investments. Many of the directors have worked with each other in previous roles, and all have worked with each other for approaching ten years. 

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