For many large financial corporations and their private equity groups, parting is not sweet sorrow, but sweet. Marsh & McLennan Cos. bid a final farewell to its MMC Capital earlier this month. The new independent firm is named Stone Point Capital.
Stone Point will manage a total of $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 continues to be the largest limited partner in Stone Point’s fund but no longer holds any ownership position nor directs 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 chief executive officer.
The new independent private equity group is based in Greenwich, Conn. and is being 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.
Marsh & McLennan initially 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. Last October, New York State Attorney General Eliot Spitzer filed suit against Marsh & McLennan over alleged bid rigging.
The Marsh 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.