Brady Insurance is exactly the sort of business that private equity behemoths are salivating to gobble up at present.

Based in Carrick-on-Shannon, it has a strong local brand and a growing national presence. Its core business remains its brokerage. But it also developed its own underwriting business, Brady Underwriting, offering speciality liability insurance for big events such as the St Patrick’s Day Parade for a host of major television and film productions.

Last year, the combined company had gross written premiums of €21 million. However, its chief executive Jane Brady is advancing plans to boost that number to €30 million within five years.

Private equity has been on a land grab in the insurance industry in Ireland in recent years, with a small number of large players seeking to consolidate the fragmented sector. Essentially, there are two types of insurance brokers in Ireland at present: those looking to consolidate the industry and those that are being consolidated.

Brady Insurance, however, does not fit into either camp and that is what makes the tale of its owner so interesting. The company currently employs 40 people. Even with some small bolt-on acquisitions, Brady feels a total headcount of between 50 and 60 “feels about right”. 

In fact, when many of her competitors are selling, Brady recently exercised an option to buy back the 51 per cent stake in the business she sold in 2021 to Coverys European Holdings (CEH), a subsidiary of a private equity-backed US firm. 

There was no rancour. Instead, taking back control just felt right. “We have faith in independent brokers. And we think there’s a place for them that isn’t part of the PE structure,” she told me last week.

Brady is something of an outlier, albeit a happy one. 

Figures compiled by Renatus Capital Partners show that 22 insurance-related businesses changed hands last year. Of those, 15 involved private equity. 

And private equity is not just targeting insurance brokerages. There were 18 accountancy mergers in Ireland last year. Of that, Renatus said eight involved private equity buyers. The sale of Grant Thornton to its PE-backed US sister company was a headline deal, now a host of regional and provincial firms have entered the PE family also. 

Based on its weekly deal tracker, Renatus totted up 464 deal completions in Ireland last year. Some 74 of those involved private equity money. That equates to 15 per cent off all deals. The corresponding figure for the previous year was just seven per cent.

Looking back, there was an average of 21 PE deals between 2010 and 2015. Having been behind the international trend on private equity, Ireland has quickly caught up.

It is not just international money. Renatus, an indigenous private equity firm, has also been busy. “Private equity activity is expected to remain strong, driven by substantial levels of dry powder awaiting deployment and an increasing number of players entering the Irish market,” Kyle Barry, an investment manager with Renatus, said.

It is not just the initial investment driving deals. Increasingly, trading companies backed by private equity money are becoming more and more acquisitive. In its 2024 M&A review, Davy Corporate Finance noted that private equity is “indirectly supporting investee companies to scale through acquisition with the latter being more noticeable in 2024 and in 2023”.

In recent years, much of the PE activity has centred on financial services areas such as accountancy or insurance. But they are far from the only sectors being targeted, as the opportunities in those areas decrease, the money will no doubt flow elsewhere. 

Take Lonsdale Capital Partners. The London private equity firm invests between £10 million (€12 million) and £20 million into businesses touting enterprise values that range from £20 million to £50 million. In Ireland, Lonsdale has invested in the equine wear business Horseware Ireland and made a sizable gain on a prescient bet on educational publisher CJ Fallon.

Late last year, Lonsdale launched Irish dental platform Total Dental Ireland. Now, the investor is looking to expand its buy-and-build model into GP surgeries in Ireland, Lonsdale co-founder Ross Finegan, a Dubliner, confirmed to The Currency last week. 

Like with insurance and accountancy, PE deals offer a tidy exit for founders, many of whom would struggle to achieve similar premiums on a conventional trade sale. 

“Akin to dental roll-ups both in the UK and Ireland, a similar thesis exists in that there are not too many options for retiring dentists or retiring GPs to sell their business and to capitalise, in some respects, on their life’s work,” Finegan said.

“And by us looking to do a roll-up in the GP sector, we’re essentially looking to give retiring GPs options to sell their business.”

Veterinary practices have also been targeted, while a number of private equity players are also buying up pubs in Ireland too. Having been behind the PE curveball for so long, the sector is fast playing catch up. You might not have realised it, but private equity has arrived at a town and village near you.

Of course, private equity is not passive money. It too wants a return, and that means companies will have to adapt, shift and grow. Hard decisions will have to be made. Costs will be cut to boost margins. 

A 2007 article from the Harvard Business Review summed up the PE approach and its strategy for success: 

“Their ability to achieve high returns is typically attributed to a number of factors: high-powered incentives both for private equity portfolio managers and for the operating managers of businesses in the portfolio; the aggressive use of debt, which provides financing and tax advantages; a determined focus on cash flow and margin improvement; and freedom from restrictive public company regulations.

“But the fundamental reason behind private equity’s growth and high rates of return is something that has received little attention, perhaps because it’s so obvious: the firms’ standard practice of buying businesses and then, after steering them through a transition of rapid performance improvement, selling them.”

The latter point is crucial. Eventually, this business will be flipped on and sold again. Some will go to trade buyers. Others will go to another private equity firm. The cycle will continue. 

Jane Brady, however, wanted to end that cycle. 

Speaking to me from Carrick-on-Shannon, she says she understands why many of her contemporaries are selling. But, having gone through the PE process, she is happy to take back control.

“The PE model works for many people. But what happens next? Obviously, you have to produce a return on investment, and that cycle turns into a bigger cycle each time there are new shareholders,” he said. 

“I feel now I’ve stopped the cycle in Brady Insurance and we are going to maintain this independence and just continue to do business. It doesn’t stress out that customer relationship.”

She added: "But I think that some of our competitors are quite stressed and quite up to the pin of their collar to manage the growth they have to achieve.”

Elsewhere last week

In July, the liquidators of Wirecard UK and Ireland Limited had just lodged a High Court action against the Irish tax authority in a bid to recover tens of millions of euro in withheld corporation tax refunds. But the court proceedings never really progressed past the starting line. On August 8, less than a month after the court granted leave to bring the proceedings, the case was discontinued. Last week, Francesca revealed how Wirecard crossed swords with the Irish tax authority and won.

In October, the Port of Cork started work on a new berth, capable of accommodating the massive offshore wind turbines that will be installed off Ireland’s coasts. Alice visited to learn more.

OpenAI set up its European HQ in Dublin and the company is keen to make its case to Irish officials about how the EU's AI Act rules should be implemented here. Newly released files outline its Irish lobbying offensive.

The Programme for Government was published last week, outlining the direction of travel for the incoming government. In my view, it is essentially a policy continuation of the previous government, albeit with less focus on the issues championed by the Green Party. I was looking for ideology as I read the document. After all, as I wrote last week, this is the first government in 30 years that is absent any overt ideology. The Progressive Democrats (remember them?) brought small-state, pro-market gusto to the cabinet table. The Labour Party brought social change. The Green Party brought climate, and, in retrospect, had an outsized influence on government policy. 

As I wrote: “What is the ideological anchor of this government? Based on this document, it is about keeping the democratic centre together."

Thomas, meanwhile, looked at the Programme for Government through the prism of infrastructure, one of the key issues facing the country. In his assessment, the coalition is prepared to modernise the way the State tackles big projects, but not to allocate priorities among the ever-expanding list of needs.

Last week, Tom revealed that the board of Scouting Ireland had written to its members to inform them that the Charities Regulator is “appointing inspectors to investigate the affairs” of the body. In a follow-up story, he reported that the regulator had been concerned about issues in Scouting Ireland for over a year. Correspondence shows that there was a long build-up to the appointment this week of inspectors to the charity.