BGC Partners has announced that it has reached an agreement to sell its insurance and reinsurance broking businesses, including brands Ed Broking Group Limited and Besso Insurance Group Limited, to The Ardonagh Group Limited for a $500 million cash consideration.It’s an interesting move given .Perhaps made more interesting by recent moves in the broking world, in particular the divestments from Aon and Willis Towers Watson, which perhaps have led BGC to believe its efforts are better focused on its other initiatives in the brokerage, advisory and financial technology sphere.The announcement does not make it clear whether this is all of Corant Global being sold by BGC, as it only explicitly states the inclusion of broking brands Ed and Besso.

Corant Global does also include insurance broking and distribution brands Cooper Gay, Globe Underwriting, piiq, Epsilon and Junge.But as said, the announcement from BGC on the sale is not clear on this.But we can be certain that reinsurance and specialty broker Ed is part of this deal and so Ardonagh will gain a much larger reinsurance specialism, with brokers familiar with dealing with ILS funds and collateralized markets as part of the deal.

Howard W.Lutnick, Chairman and Chief Executive Officer of BGC, explained the sale, “The agreement to sell our Insurance Brokerage business for $500 million reflects the significant value we have created since entering this market in 2017.Like our previous sales of eSpeed and Trayport, as well as our IPO and tax-free spin-off of Newmark, this sale further demonstrates our commitment to driving shareholder value.

“While we have built an exceptional Insurance Brokerage business, this sale will focus our resources on Fenics.We expect to use the proceeds to accelerate Fenics growth and to repurchase shares and/or units.“Ardonagh is an excellent partner to continue our Insurance Brokerage business.

The combined platform will add to their strength, capability, and create the world’s leading independent specialty insurance broker.“While our Insurance Brokerage business provided less than 10 percent of BGC’s total revenue over the trailing twelve-months, the $500 million of cash that we expect to receive represents over 17 percent of BGC’s fully diluted market capitalization.“The sale proceeds will provide additional capital to accelerate Fenics growth, which increased 40 percent year-over-year in the first quarter of 2021.

Additionally, our Fenics Growth Platforms, which include Fenics UST, Fenics GO, Lucera, Fenics FX, and other newer standalone platforms, grew more than 82 percent over the same period.While the growth of our Insurance Brokerage business was industry-leading, we believe the scale and scope of the Fenics opportunity is far greater, with potential to drive shareholder value materially higher.” Lutnick, concluded, “We have been clear and consistent about our plans to express the value of BGC’s assets.This transaction demonstrates our commitment to increase shareholder value and focus our interest on Fenics, which we believe represents the greatest opportunity for our Company.” The transaction is expected to close in the second half of 2021 and BGC noted that its Insurance Brokerage business contributed approximately $191 million in revenue during the twelve-month period ending March 31, 2021.———————————————————————.

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