Marsh & McLennan Cos. bid a final farewell to its MMC Capital last week, announcing that the sale to the group’s management team was completed. The new independent firm is named Stone Point Capital.
Stone Point will manage $2 billion in assets, including Trident III, the latest MMC Capital fund that closed last year with $1.1 billion. The group will continue to invest in employee benefits, financial services and insurance companies.
Marsh & McLennan is the largest limited partner in Stone Point’s fund, but the financial corporation no longer holds a majority position. Nor will Marsh & McLennan direct any investment decisions. The limited partners in the Trident fund were overwhelmingly in favor of the spinout, according to Charles Davis, Stone Point Capital’s CEO.
The new independent private equity group is based in Greenwich, Conn., and is run by its current team of investment professionals. Stone Point announced that former MMC Capital Senior Principal Stephen Freidman has rejoined the firm. Friedman, a former Goldman Sachs executive, will serve as a senior advisor and member of the investment committee of the Trident Funds.
Marsh & McLennan announced the split in March amid growing concerns and scrutiny of the company. Investing in insurance companies presented a potential conflict of interest for MMC Capital, as its parent company sells insurance policies. Earlier this year, the Securities and Exchange Commission requested documents from the company concerning related-party transactions, including MMC Capital investments. Prior to that, New York State Attorney General Eliot Spitzer filed suit against Marsh & McLennan over alleged bid rigging.
The spinout is the latest in a series of private equity spinouts and upheavals. Limited partners in the most recent AIG Capital Partners fund may withdraw from the fund after the group’s pro-independence executives were fired. In March, J.P. Morgan Chase announced that its private equity unit, JP Morgan Partners, would be spun out by late 2006.