David McDonald and Theo Duchen are co-founders and, interestingly, co-CEOs of Acturis. Both men were previously partners at McKinsey & Company.
David Mcdonald became a partner in 1996 and co-led McKinsey’s ecommerce practice in the UK. Theo Duchen became a partner in 1997 and led McKinsey’s general insurance practice in the UK. He has worked extensively with both insurers and major international brokers for several years.
Theo Duchen studied at the Univeristy of Cape Town and then moved to the faculty of actuaries. Mcdonald qualified as a chartered accountant and received an MBA from INSEAD, France. They both became co-founders and chief executives of Acturis in 2001 and still hold their positons.
Acturis is an IT technology provider to the insurance industry, providing front and back-office systems to brokers and underwriters. “Over the past three years, Acturis has prospered operationally and financially, growing our revenues at a 45 per cent cumulative annual growth rate and generating strong cash flows,” says McDonald.
Acturis has received a minority investment from the private-equity firm Summit Partners. Summit’s strategy is to seek “outstanding management teams that have built their companies to market leadership.”
Duchen says he hopes the deal will “further leverage our success and continued growth strategy in the UK and in Europe.
Han Sikkens, a principal of Summit Partners who will join the Acturis board of directors, comments: “Acturis has demonstrated rapid growth and counts most of the leading insurers and brokers in the UK as its customers. The highly competitive UK insurance industry continues to seek efficiencies in administration and distribution, and other European markets can also benefit from the Acturis business model; Acturis, with its highly scalable, modern and flexible technology, is ideally positioned to serve this marketplace.”
Here’s Summit Partners’ investment approach:
Summit Partners makes growth equity investments in rapidly growing companies with proven business models, records of revenue and earnings growth, and the leadership capable of sustaining that growth. Often, these companies are looking for a partner to help them achieve scale and expand geographically.
We invest in growth companies across all industry categories. The primary industries in which we have invested to date include business services, communications technology and services, consumer products, education, energy, financial services, healthcare and life sciences, industrial products, Internet and information services, media and entertainment, semiconductors and electronics, and software.
At Summit, we believe that great companies are built by great management teams—not by investors. We frequently make minority investments that leave owners in full control of their companies, and we serve as active board members experienced in guiding companies through growth stages—advising on board and management recruiting, geographic expansion, acquisitions, financial reporting and management systems.
Little to No Leverage
We structure investments with little to no debt because excessive interest and principal payments can constrain a company’s ability to grow. However, there are instances where leverage —when used in the correct amounts and for the right purposes—can be a critical part of a company’s balance sheet. In these instances, we can offer subordinated debt financing in conjunction with growth equity.
Flexible Investment Size
We are flexible on financing terms and make certain that investor and company interests are aligned. We will invest as little as $5 million to more than $800 million per company in combined growth equity and subordinated debt. Our transactions are structured to foster long-term growth, ensure financial stability, and maximize shareholder value. Frequently, we are the first institutional investor. We usually are the lead investor and often the sole investor. We are currently investing nearly $6 billion worldwide in capital.
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