Risk business targets Europe

Market sources say that when European private equity firms and/ or their portfolio companies are considering taking out insurance policies, the names of three providers are likely to make their way automatically onto shortlists: Marsh, Aon and Willis. If Oliver Crispin has his way, a fourth might be added in the near future.
After 17 years at Marsh, Crispin has joined the London office of Lockton International. The move coincided with the acquisition by Lockton Inc, the Kansas City-based insurer, of South Africa’s Alexander Forbes International
Risk Services, in November 2006. Shortly after the deal closed, Lockton announced that its Private Equity and Corporate Acquisitions Practice (PECAP) would be merging with the equivalent European practice within Alexander Forbes under a new Lockton International brand.
With the firm making no secret of its intention to bolster its resource in the months ahead, Crispin is spearheading Lockton’s attempted land grab in the European private equity risk management arena. He says: “In the LBO
space, there’s room for another player.” Areas in which his team will specialise include: due diligence for acquisitions; refinancings and disposals; transaction facilitation solutions; portfolio insurance programmes for funds; and private equity professional liability insurance.
While Crispin believes that his firm will have certain competitive advantages over its rivals, he also thinks that the pie has become larger for all. For example, he refers to the case of the “NatWest Three,” in which a trio of UK bankers were extradited to the US on charges relating to an allegedly corrupt deal they agreed with Enron Corp. This, he says, has brought the type and amount of directors and officers (D&O) cover required by those trading with US financial services firms into sharper focus.
In addition, Crispin says lenders to private equity deals are increasingly sensitive to risk, particularly in light of the recent Financial Services Authority (FSA) report in the UK, which raised concerns about possible deal failure. Plus, he says: “private equity is moving into new areas over the last 18 months, for example, there’s been a big push into renewable energy.”
As new risks like these are encountered, Crispin and his team at Lockton hope to be among those chosen to offer private equity firms a guiding hand.