Hamilton Insurance Group (HG) priced its IPO at $15.00 – $1.00 below the low end of its $16.00-to-$18.00 price range – on Thursday night (Nov. 9, 2023). The profitable Bermuda specialty insurance and reinsurance company priced 15.0 million shares – the number of shares in the prospectus – at $15.00 to raise $225.0 million. The IPO raised $30 million less than the estimated IPO proceeds of $255.0 million, which assumed pricing at $17.00, the mid-point of the range.
Hamilton’s stock opened at $15.25 after 11 a.m. EST today – Friday, Nov. 10, 2023 – on the New York Stock Exchange. The stock hit a session high of $15.39 and a session low at $15.00, its IPO price, before edging back up to $15.15 shortly before noon EST. Volume totaled about 1.59 million shares in late Friday morning trading.
Hamilton’s stock closed its first day NYSE trading at $15.00 – even with its IPO price – on volume of 4.34 million shares.
Barclays, Morgan Stanley, Citigroup and Wells Fargo Securities were the joint book-runners.
Pricing the IPO at $15.00 gave Hamilton Insurance Group a valuation (market cap) of $1.65 billion. That’s in contrast to the projected valuation of $1.87 billion, based on an IPO price of $17.00, the mid-point of the range.
The interest in Hamilton Insurance Group’s IPO came mostly from “long only funds,” the IPO pros say.
Of the 15.0 million shares in the IPO, the Bermuda specialty insurance and reinsurance company offered 6.25 million shares and selling shareholders offered 8.75 million shares.
Hopkins Holdings, a shareholder, and certain directors had given non-binding indications of interest to buy 260,000 shares – about 1.7 percent of the IPO.
Private equity firms Blackstone, Hamilton Lane, Hopkins Holdings and Magnitude Partners are among the principal shareholders, the prospectus says.
Hamilton Insurance Group is a global specialty insurance and reinsurance company founded in Bermuda in 2013.
“Our diversified underwriting model is complemented by a unique and long-term investment management relationship with Two Sigma,” Hamilton Insurance says in the prospectus. “Founded in 2001, Two Sigma is a premier investment manager with a strong track record and approximately $60 billion of assets under management across affiliates as of April 1, 2023.”
Two Sigma managed $1.6 billion of Hamilton Insurance Group’s assets as of Dec. 31, 2022, via the company’s investment in the Two Sigma Hamilton Fund, according to the prospectus.
Hamilton Insurance Group says its business is 57 percent international and 43 percent Bermuda, based on gross premiums written for the year ended Dec. 31, 2022, according to the prospectus.
The company’s international business consists of business written out of its Lloyd’s syndicate in London and its subsidiaries in the United Kingdom, Ireland and the United States, including its Hamilton Global Specialty and Hamilton Select platforms. The international business includes commercial specialty and casualty insurance and specialty reinsurance products. The U.S. Excess & Surplus (“E&S”) market is part of Hamilton’s international business.
The company’s Bermuda business consists of Hamilton Re, Ltd. and Hamilton Re US. The insurance product lines include property, casualty and specialty reinsurance business and high excess Bermuda market specialty insurance products, predominantly for large U.S. commercial risks, according to the prospectus.
Hamilton Insurance Group is a money machine. For the 12 months that ended on June 30, 2023, Hamilton Insurance Group reported net income of $87.42 million on revenue of $1.2 billion.
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