A pair of British executives are seeking to buck the trend of waning sentiment towards special purpose acquisition companies (SPACs) by establishing a £1bn listed vehicle for investors to access the Lloyd’s of London insurance market.
Sky News has learnt that Financials Acquisition Corp (FINSAC), which floated in the UK in the spring of 2022, will unveil plans to raise up to £500m for London Innovation Underwriters.
The company will be positioned as a unique way to give ordinary investors access to a pure-play Lloyd’s vehicle that will seek to build a £1bn portfolio of speciality insurance premiums.
Sources said an announcement about the deal was likely to be made on Wednesday morning.
It will come just weeks before a deadline for FINSAC to strike a merger deal in accordance with the terms of its listing.
In doing so, it will stand out as a rarity in the global SPAC market, with hundreds of the vehicles in New York and Europe having been wound up after failing to find attractive targets.
Many companies which have gone public through this route in recent years have either collapsed into insolvency, such as Virgin Orbit, while others, like the British car-buying platform Cazoo, have been forced into talks about financial restructuring.
FINSAC’s success will depend on its ability to raise £500m in new equity capital at a time when the appetite for initial public offerings in London has been lacklustre at best.
Last week, WeSoda, a soda ash producer, called off a £6.5bn flotation, blaming weak investor sentiment.
One insurance executive said the plan stood a realistic chance of success at a time when the Lloyd’s market is particularly attractive from a financial perspective.
FINSAC was set up by Andy Rear, a former Munich Re executive, and Will Allen, who previously worked for the investment bank KBW.
Paul Jardine, an experienced insurance executive who has chaired Chaucer, is a board member.
It is said to have considered combinations with a number of insurtech businesses before settling on the plan to establish London Innovation Underwriters.
FINSAC is being advised by Barclays, HSBC, Numis and The Growth Stage.
It initially raised £150m in its original IPO last year.
A spokesman for the company declined to comment.