Marron's Lightyear Takes Stake in CGSC in Latest Insurance Play

   By Erik Holm 
 

Lightyear Capital LLC, the private-equity firm founded by former Paine Webber Chairman Donald Marron, said on Monday one of its funds agreed to take a large stake in insurance broker Cooper Gay Swett & Crawford Ltd.

CGSC will use the capital raised in the deal to fund its continued expansion, the broker said in a statement on its website.

Lightyear said it had combined with unnamed additional investors to take a controlling stake in CGSC. Terms of the deal weren't disclosed.

The broker, formed in 2010 with the combination of London-based Cooper Gay with Swett & Crawford of Atlanta, specializes in hard-to-place insurance in sectors including mining, aerospace and engineering. It took in revenue of $344 million as it placed $3.5 billion in premiums last year.

Lightyear, which invests in financial services companies through three private-equity funds, also owns stakes in Lloyds of London underwriter Antares Holdings Ltd., Houston International Insurance Group and Bermuda catastrophe reinsurer Flagstone Reinsurance Holdings Ltd. (FSR).

Flagstone is in the process of selling itself to Validus Holdings Ltd. (VR) for about $645 million, a significant discount to its $1.1 billion market capitalization at its 2007 initial public offering.

Lightyear previously owned U.S. crop insurer NAU Country Insurance Co., which it sold in 2010.

Lightyear was founded 12 years ago by Mr. Marron, who serves as the firm's chairman and a member of the investment committee. Mr. Marron was chairman and chief executive at Paine Webber Group Inc. for 20 years until it was acquired by UBS AG (UBSN.VX) in 2000.

The CGSC transaction is expected to close by the end of the year.

Write to Erik Holm at [e-mail]

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