TRAGEDY touched David Howden at an early age. He was only seven when his father, Philip, an industrialist, died. “We suddenly went from being quite well off to not having much at all,” said the founder of Hyperion Insurance, an international broker and underwriter with sales of £87m. “The little bit we did have, some dodgy accountant managed to fiddle out of us. Our lifestyle suddenly changed.”
His mother, Gwendoline, returned to teaching autistic children and Howden was able to go to private schools, attending the Dragon in Oxford and then Radley.
He was only 16 when he broke his back playing rugby and needed a spinal fusion. “Radley and I agreed that if I couldn’t play sport I shouldn’t come back,” he cheerily admitted. “I hadn’t exactly been the model pupil. My entrepreneurial streak had started quite early: buying things other boys couldn’t and selling them on.”
After taking A-levels in 1980 at a London tutorial college, Howden joined Alexander Howden, an insurance broker founded by his forebears, an Edinburgh shipping family. “Alexander Howden was my great-great-great-grandfather, but it hadn’t been a family firm for a very long time,” Howden said. His new colleagues didn’t see it that way. He was taken out to lunch on his first day and told: “We all know why you got a job and none of us respect you for it.”
The teenage Howden was shocked — though he remains friends with his lunch partner. He left after a year to work for a small firm, Nelson Hurst and Marsh, led by Brian Marsh, who was to become an investor in Hyperion. Howden sold professional indemnity for doctors, lawyers and architects — a new concept at the time.
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In 1988, he struck out on his own and took and two colleagues, Mark Pangborn and Mark Howells, to set up a subsidiary for one of his clients, Regis Low.
They were enthusiastic, but raw. “In our first letter to try to get clients, we wrote: ‘Unencumbered as we are by other clients, we think we are ideally suited to serve you’. Funnily enough, it was quite successful.”
But Regis Low was sold and Howden was unhappy. “In 1994 I had just had enough, I didn’t like the politics of the business.”
By then, Brian Marsh had become a venture capitalist, and when Howden decided to go his own way, Marsh threw in £25,000 — 25% of the start-up. That stake is now valued at more than £30m. Also part of that long-term shareholder support is 3i, which paid £50m for a 27% stake in 2008. Howden himself owns 15%.
Hyperion is a commercial broker, insuring companies rather than individuals, focused on broking and underwriting. Underwriting is run through its Dual subsidiary. On the broking side, Howden cheekily revived the family brand. Fortunately, Aon, the American giant that swallowed Alexander Howden in 1997, didn’t complain. It even sent over the paintings of his ancestors that hang in the boardroom.
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Hyperion employs more than 1,000 people in 52 offices, operating from 28 countries. “We discovered the best way to do business was to put on our pinstripes and fly abroad,” he explained. “As soon as you were abroad you were somebody, you had a bit of credibility in Peru or Colombia. A lot of people sat around waiting for business to come to London.”
This year, Hyperion was ranked 39th on The Sunday Times/Fast Track Buyout Track 100, a league table for private equity-owned companies, with profit growth of 46% to £11.3m pre-tax. Much of that growth has been through acquisition. On Friday, Hyperion announced the purchase of Windsor, a Lloyd’s broker, and more deals are likely.
He sees his staff as key to Hyperion’s success, which has also been recognised with two Queen’s Awards for exports — in 2007 and this year. “We have been absolutely ruthless on a number of very simple things: the most important is the people we employ,” Howden said. “If you get the right people, they know what to do.”
There have been mistakes on the 18-year journey that will lead Hyperion to seeking a public listing soon. “We opened a business in Argentina years ago just before the peso devalued from parity to the dollar to four to one,” recalled Howden. “All our products were sold in dollars and the currency collapsed.”
Married with three daughters, Howden, 48, breeds longhorn cattle on the Oxfordshire-Buckinghamshire border, where he is also renovating a pub for the community. Bibendum’s Simon Hopkinson is adviser on the project.
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Howden’s advice for entrepreneurs? “The most important thing is to make a decision. You often get it wrong but you always need to make a decision.” And always keep an eye on the numbers. “If you run a high growth business, managing the cash is absolutely key. We run a strictly no surprises culture.”