The Carlyle Group has agreed to acquire a majority equity interest in JenCap Holdings, a wholesale insurance broker, and the assets of Wholesale Trading Co-Op Insurance Services. Wholesale Trading is currently owned by its management team and a group of external private investors. The transactions are expected to close by the end of March.
Carlyle intends to use JenCap to consolidate specialty insurance distributors including managing general agencies, specialty program underwriters, transactional wholesale brokers and captive managers.
Upon closing of the transaction, John Jennings, the current President and Chief Executive Officer of Wholesale Trading, will be named President and CEO of JenCap. Kristopher Bauer, a founder of Wholesale Trading and co-head of its Casualty Practice, will be named President of Wholesale Trading. JenCap will be headquartered in New York and Wholesale Trading will continue to operate from offices in New York, San Francisco, Atlanta and Princeton, New Jersey (www.wholesaletradingins.com).
“As a start up, over the last five years we have built a successful business from scratch through hard work and client service,” said Mr. Jennings. “However, it is clear to us the next five years will require significant investments in technology, data analytics, human capital and acquisitions to expand product offerings and distribution networks. With Carlyle Group as our financial partner we have the ability to make those investments, attract the best talent both inside and outside the industry and immediately set us apart from our competitors.”
Equity for the two transactions will be provided by Carlyle Global Financial Services Partners II (CGFSP) which closed in December 2011 with $991 million of capital. CGFSP invests in management buyouts, growth capital opportunities and strategic minority investments in financial services firms globally. The investment activities of CGFSP are led by John Redett, a Managing Director of The Carlyle Group.
“We are pleased that John Jennings and the professionals who started Wholesale Trading will be joining JenCap Holdings,” said Mr. Redett. “John and his team have done a tremendous job building the organization from a start-up, creating a high-growth, client-focused organization in only five years. We look forward to making the necessary investments for Wholesale Trading and JenCap to quickly become a significant player in the specialty insurance distribution and service business.”
CGFSP currently has four portfolio companies: Edgewood Partners, a retail property & casualty and employee benefits insurance brokerage and consulting firm, acquired in December 2013; Conifer Financial Services, a third-party fund administrator and capital market services provider, acquired in May 2015; DBRS, a credit rating agency acquired in March 2015; and PIB Limited, a multi-market insurance broker acquired in December 2015.
The Carlyle Group invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The firm employs approximately 1,700 people in 36 offices across six continents and is based in Washington, DC (www.carlyle.com).
© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-11-16
