Premium Funding and Principal Finance are set to merge under a new ownership arrangement that will also see private equity investor Pemba Capital Partners taking a key stake.

Pemba is acquiring a majority interest in the combined group alongside the founders and management of Principal Finance and Premium Funding. The total funding turnover for the firms is on track to be about $650 million for this financial year, with the business servicing more than 100,000 clients.

Principal Finance MD Daniel Gronert will become CEO while Premium Funding’s Ross Hayward will be Head of Strategy and Systems. Premium Funding founder Barry Hayward will continue in a consulting role.

“Both Principal Finance and Premium Funding have been instrumental in driving innovation to make premium funding easier for brokers and clients,” Mr Gronert said today.

“The opportunity to bring both companies together and partner with Pemba, who understand our industry and have the resources and expertise to support our growth aspirations, is extremely exciting.”

Premium Funding and Principal Finance will continue to operate under their respective names until the integration is complete, with a date for completion still to be determined.

“Our goal was always to grow the business in a meaningful way that ultimately benefits our broking community and clients through efficiencies and scale, Ross Hayward said.

“This new partnership allows us to achieve these goals and also maintain a focus on industry and technology advancement.”