George, growth shares, hurdle shares, what are they? How do they work?

I will say for those listening that colloquially hurdle, growth, MIP, these terms can all be used a little bit interchangeably.

So while someone might be talking to you about a growth share, we'll set out here what we typically see as growth and a hurdle really.

But just, you know, for people to remember, they can be used a bit interchangeably, so it's important to look at the actual form of what's being issued.

Economically, that will drive really what it is.

So growth shares are a share class which allow the participants to benefit from value growth in the company above a certain predetermined threshold or base.

That's normally set at the time of the acquisition.

So thinking about timing, does the expected hold period, George, affect the way in which the MIP is designed?

Or you're acting for a, a standalone platform already, which is doing bolt-on acquisitions, George.

Yeah, that's, that's quite right, Rob.

So the overall structure of the transactions tends to be largely similar, but there are some nuances, particularly as you're thinking about how do we incentivize individuals as part of the transaction we're doing now, but then on an ongoing basis.

And, um, I'll talk a little bit about that now.

We do have another episode or two coming down the line on, uh, management incentivization, where we'll explore this in a bit more detail.

But earn-outs are quite common, um, on brokerage M&A, but more so I would say on bolt-on transactions, um, or if someone's looking to establish a platform with maybe a smaller initial platform acquisition.

Where an existing brokerage is acquiring a number of other brokerages as part of a roll-up strategy, uh, earn-outs can be quite helpful as a tool to make sure you're appropriately incentivizing people at the time of the transaction, then on an ongoing basis.

You know, our listeners should definitely listen to that one, and we'll unpack in more detail.

George, what makes Lloyd's stand out from the, the crowd?

It's a good question, so I'm gonna go slightly less legal here and, um, really kind of just concepts.

So Lloyd's stands out for a few reasons.

Um, first of all, it is a true time-tested institution.

It's been at the heart of the global insurance industry for over three centuries now.

The origination story actually of Lloyd's is, is really fascinating.

You can't say that for many kind of legal regulatory frameworks that, uh, uh, sit around a commercial organization like Lloyd's, but we haven't got time for that today.

Let's, um, George, talk about some of the key commercial and legal terms that are really important in Lloyd's M&A deals.