5 Questions With … Mitch Caplan, Executive Advisor, Aquiline Capital Partners

1) You recently joined Aquiline Capital Partners as an executive advisor, what attracted you to the firm?

Well, there were a couple of reasons. First, I think Aquiline has a phenomenal brand with an incredible depth of in-house knowledge. The firm’s exclusive focus on financial services and appreciation for operational experience are an obvious fit with my background [Caplan previously served as CEO of E-Trade]. Also, in my role as an advisor, I’ll be able to wear a few hats, which appealed to me. Beyond evaluating investment opportunities, I can also get involved on an operational level with some of Aquiline’s portfolio companies, so it’s a good balance. I can’t think of a better place to be.

Yes, there are two actually, and both illustrate the firm’s creativity, which was also a big part of why I joined. Beyond evaluating investment opportunities in existing companies, Aquiline is focused on developing its own franchise ideas. The examples I’m of thinking of are Validus Re Holdings and Tygris Commercial Finance Group. In both instances, the companies were basically whiteboarded by Aquiline. Validus Re is a reinsurer that was formed by the firm in 2005 after Hurricane Katrina to offer property catastrophe and other specialty lines. That company went public in July 2007. Tygris was launched this summer to address the void in the financing markets, even as the credit crunch deepened. Both are cases of the firm seeing a need and creating a vehicle to fill it.

By and large, I think the marketplace for private equity continues to evolve, but it’s still a fairly stable source of capital funding, especially given recent events. When companies attract private equity investors, they are entering into a long-term partnership. That allows an investment thesis to be viewed from a macro perspective. At a public company, it’s harder to do that because every quarter carries expectations and the stock price is always there to tell you what kind of job people think you’re doing.

These are unique, interesting times and I don’t think there’s a firm out there that hasn’t been impacted in some way. Opportunities are certainly going to come out of all this chaos, but determining timing is the challenge. The team at Aquiline is sticking to their formula and staying as disciplined as possible.

Given the current market environment, our team is focusing on the markets we believe represent the greatest opportunities in terms of recovery and growth over the long-term, particularly India, China and certain European markets. We plan to remain engaged with key participants and carefully monitor developments in these markets.