Apollo will retain all of its investment in specialty insurer Aspen after it paused work on its IPO, and M&A talks with Ryan Specialty, Blackstone, and SiriusPoint wound down, this publication can reveal.
Sources told this publication that Aspen had decided not to proceed with a second-quarter listing, and would reassess the market in Q4, or early in 2025.
It is further understood that both sets of M&A discussions Aspen had been holding in parallel have been broken off. Aspen had been discussing a merger deal with SiriusPoint, which this publication had flagged as a complex transaction to get to the line.
It was also examining the prospects of a complicated carve-up deal involving Ryan Specialty, and institutional investor Blackstone.
Aspen carried out significant market testing of its IPO, and has been passing through the regulatory process with the SEC via a series of F-1 filings, although it never formally announced an intention to list.
Details of the valuation discussions between Aspen and investors have been difficult to penetrate, but sources suggested that the specialty insurer would have had to drop below its ~1.2x-1.25x minimum valuation in order to cover the IPO.
Sources said that Aspen had been hurt by a negative turn in sentiment in the sector reflecting increased concerns about the adequacy of casualty reserves, and the sustainability of rate rises.
In addition, despite some signs of green shoots, IPO markets have remained subdued with investors imposing large IPO discounts on issuers.
Apollo agreed to acquire Aspen in 2019 for $2.6bn at a valuation of around 1.1x book, and has chosen to exercise the greater freedom it has compared to many sponsors around hold periods.
A listing remains the base case for Aspen around an exit, but will depend upon a more congenial IPO environment, and building increased investor conviction by putting up consistently strong quarterly results.
Insurance Insider revealed in September that Aspen was auditioning bankers for an H1 IPO in New York, and subsequently revealed that Goldman Sachs, Citi, and Jefferies had been appointed as the lead banks.
Aspen reported a combined ratio of 87.5% in 2023, along with an operating RoE of 20.2%, and $4.0bn of GWP.
Under former Brit CEO Mark Cloutier, the company has undergone major turnaround work, including the elimination of up to $1 billion in underperforming business, a significant repositioning of the portfolio, and the purchase of a sizable reserve cover from Enstar to close the books on 2019 and prior.
Aspen, SiriusPoint and Ryan Specialty declined to comment. Blackstone did not respond to a request for comment.