According to Marcel Larochelle, managing partner of Novacap Financial Services, the additional financing from new investors will enable Revau's US subsidiary, Advanced Underwriting, to make rapid progress in the managing general agent (MGA) market for property and casualty insurance.

In an interview with the Insurance Portal, Larochelle explains the choice of a continuation vehicle as a financing tool in Revau's particular case, as announced on Sept. 3. “Private investment funds normally have a term of 10 years,” he says. There are limits on the amount that can be invested in each company in order to diversify the portfolio."

The investment in Revau in 2020 quickly paid off, according to Larochelle: “It has been a resounding success. The company has grown from a regional player in Quebec to a major player in Canada.” 

Strategic acquisitions were made, enabling the MGA to add new lines of business, such as surety bonds and legal protection.

In 2023, the management team began looking for an entry point from which to develop Revau's U.S. division. They finally found their first targets last year, and the transaction was announced in May 2025.

“The U.S. market is so large that you can have a company with one or two lines of business and it will be enough to generate as much revenue and profitability as a firm the size of Revau in Canada,” explains Larochelle.

For growth  

The acquisition of the two Texas-based MGAs required a new capital injection. There was still capital available in the original fund created by Novacap to support Revau. Institutional investors who entrusted funds to this private firm could also become co-investors in Revau, but this financing formula had its limitations, explains Larochelle.

Investors in the first fund had the option of selling their stake to the new fund, which serves as a continuation vehicle, or retaining their investment. This is what Novacap did with its own stake in Revau, “because we also invested in the company, not just our investors' money,” he explains.

New investors can now join the new fund to support Revau's expansion. The new fund is planned for five years with a possible two-year extension. The available capital is reserved solely for Revau's future development.

“In the end, Revau could be sold, but that deadline does not mean we are obligated to sell the company. We could simply create another fund that would provide the same liquidity that was offered in the first fund,” explains Larochelle. In Novacap's history, the investment company has held some of its investments for more than 15 years.

The possibility of an initial public offering to create a public company is not a good option for Revau, says Larochelle. “In financial services in Canada, apart from the big banks and a few large insurance companies, there isn't much for investors,” he says.

He cites the example of Guardian Capital, which tried its hand at the stock market before recently accepting an offer from Desjardins Group to return to being a private company.

The Canadian financial services industry remains highly fragmented, according to Larochelle. He saw this when analyzing the market for underwriting intermediaries, known as MGAs. “It's a collection of small players. In our jargon, we call it the lower mid-market,” he says. 

Shortly after the investment, a chief technology officer from Lightspeed was quickly recruited to help implement the company's new subscription platform.

“The investments we made in technology represented several years of profitability,” adds Larochelle. “Revau is now one of the most advanced companies in its sector in North America.” This technology platform subsequently facilitated the integration of new underwriting resources added to Revau's portfolio.

American expansion  

Business growth in the United States was already in the works for Revau in 2023, as revealed by its President and CEO, Jean-François Raymond, in an interview with the Portail de l'assurance.

As chairman of Revau's board of directors, Larochelle fully supports the expansion into the U.S. market.

“We are entering this market with the advantage of having a very strong management team and a technology platform that is rarely, if ever, found among other MGAs in North America. And we have a management team that is accustomed to managing multiple lines of business, adding new ones, and optimizing them,” he explains. 

Companies similar in size to Revau in the United States have not needed to optimize their operations due to the considerable size of that market, according to Larochelle. The expertise developed by Revau's management team in Canada will therefore be put to good use in the United States.

Larochelle says he is not generally enthusiastic about the idea of expanding into the United States, where many Canadian companies have destroyed the value they had established in Canada. “In Revau's case, we remain cautious, but the growth potential is incredible.”

The two MGAs acquired in the spring of 2025 are specialized in their niche, underlines Larochelle. They know their market, and their operations are continuing as normal. The approach used in Canada will be used to add new lines of business in the United States.

“These people find themselves in a company with a unique technology platform. By joining Revau, we are also offering them the opportunity to become shareholders. This is very interesting for them,” he adds.

Three other cases 

Novacap Financial Services has previously used the continuation vehicle formula three times: 

  • Syntax Systems Group, a leading provider of cloud computing services. According to the October 13, 2021 press release announcing the investment, Novacap indicated that since investing in the company in 2016, Syntax had increased its revenue nearly 15-fold. 
  • Groupe Master, a firm founded in 1952 specializing in heating and ventilation equipment. Novacap invested in the company in 2014 and enabled it to quadruple its revenue until the creation of the continuation vehicle, announced in Dec. 2021. 
  • Nuvei Corporation, a global leader in payment services. In a transaction announced on April 1, 2024, Nuvei was taken private and transformed into a privately held company. 

A different market 

Revau is seeking its place in this universe of huge firms and a multitude of MGAs of similar size, but whose risk underwriting is concentrated in a single industry.

Since moving to Texas last June, Jean-François Raymond has made a few observations about his first few months in the United States. In an interview with the Insurance Portal, he highlighted “the excellent work ethic.”

He also mentions the warm welcome he received from his colleagues. The arrival of Canadian investors is not a cause for concern. “The Canada-U.S. relationship isn't very good right now, but that's not an issue here. We've been very well received,” he says.

Raymond points out that the two MGAs in Dallas focus on niches where underwriting conditions are very strict: trucking and construction. “There's a lot of turmoil in these two sectors. Premiums are rising, and insurers are reducing their capacity.”

The MGA market in the United States is very different from that in Canada. Many of these underwriting intermediaries have very high volumes, but they specialize in a single sector. Profit margins are low, so managers compensate with volume.

“There are a lot of contingent commissions in Canada; that's not the case in the United States. MGAs take a smaller commission, they give less to the broker, but they write large volumes,” he says.

“It's the same principle as a wholesaler like Costco. You reduce prices to sell more,” explains Jean-François Raymond. In the United States, MGAs tolerate higher loss ratios than we see in Canada.

At Revau, the approach is that of a generalist. We underwrite risks in a wide variety of commercial insurance sectors. In the United States, MGAs focus on a single, often very niche market. “There are MGAs with premium volumes of several hundred million, but only in a very specific product, such as residential construction of three stories or less, and nothing else,” he explains.

“Americans don't understand what we do. They're open to the idea, but they say, ‘Why spread yourself across four or five lines when you can be the best in one?’ That's the model here,” says Raymond.