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 ?Nat-West 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.
GI Partners hires new investor relations director
GI Partners, a private equity firm based in London and Menlo Park, California, has hired Kristen Mary to be its director of investor relations. In that position, her responsibilities will include communicating with investors and marketing duties, Rick Magnuson, GI's executive managing director, said in a statement. Mary joins the firm from MVision Private Equity Advisors, a London-based placement agent where she was a partner for five years. Mary's appointment follows GI's July closing of its second fund, valued at $1.45 billion (€1.1 billion). The fund's limited partners include American, European and Middle Eastern governments and banks.
Finance staff in demand
A survey by Ashton Penney, a UK provider of interim management to private equity firms, showed that demand for CEOs and CFOs in 2006 was only marginally greater than in 2005. However, there was 14 percent more demand for financial managers and controllers and an increase of 10 percent in demand for specialists in areas such as investment due diligence and acquisition identification and consolidation on behalf of portfolio companies. The survey revealed an increase from 18 percent to 30 percent in the proportion of interims required for turnarounds and recoveries.
KKR Euronext gets HCA allocation
KKR Private Equity Investors, the Euronext Amsterdam-traded vehicle affiliated with Kohlberg Kravis Roberts, has invested approximately $315 million in HCA, a hospital chain recently acquired by KKR, Bain Capital, Merrill Lynch Global Private Equity and HCA founder Thomas Frist for $33 billion. The involvement of the Euronext vehicle sees KKR Private Equity Investors coinvesting in the HCA deal in the amount of $250 million. Through its commitments to other KKR partnerships, the vehicle is investing a further $65 million, according to a press release. The investment represents a roughly 6.3 percent stake in HCA. KKR's Euronext vehicle aims to invest roughly 75 percent of its capital in KKR-sponsored investments. The remaining 25 percent ?may be committed opportunistically,? according to the release. In October, KKR announced a $282.3 million investment from the Euronext vehicle in the semiconductor business of Royal Philips Electronics, another KKR deal.
GP bolts to become Comcast CFO
Michael Angelakis, a managing director at Providence Equity Partners, a Providence, Rhode Island-based private equity firm that specializes in the media and entertainment, communications and information sectors, has decided to leave the firm after seven years to join Comcast Corporation, a Philadelphia-based provider of cable, entertainment and communications products and services, Comcast said in a statement. Angelakis will make the move at the end of the first quarter of 2007, the statement said. Angelakis will replace Comcast's two current chief financial officers, Lawrence Smith and John Alchin, who, at the end of last year, announced their plans to retire, the statement said. ?Mike was a cable operator when he joined us, and we understand his desire to return to an operating role, especially at such a great company,? Jonathan Nelson, Providence's chief executive officer, said in the statement.
Search expands office space
Search Investment Group, a fund management business affiliated with the Miller family of Hong Kong, has expanded to an additional floor of the Cheung Kong Center. The professionals hired to manage the new Squadron Capital division will move from Search's current 57th floor location to the 46th floor. Squadron is currently in the market with a fund of funds that will target Asia-based private equity GPs. Search is led by David Pierce.