Frontenac leads $50m specialty insurer deal

The Chicago firm has acquired a majority interest in WNC Insurance Services and is joined by SE Capital, PPM America and company management.

Chicago-based private equity firm Frontenac Company has led a $50 million (€40 million) investment in WNC Insurance Services.

Additional equity is coming from Chicago-based private equity firms SE Capital and PPM America. Incoming WNC executives Richard Riley and Robert Gross, who will serve as chief executive officer and chief financial officer, respectively, are also taking a stake in the company. Current WNC chairman Carl Hermann, Jr., and chief operating officer Carl Hermann III will retain their shares in the WNC.

An exact breakdown of investment amounts was not disclosed in the statement. ING Capital will serve as an arranger and senior lender for the deal.

South Pasadena, California-based WNC provides lender-placed and voluntary property and casualty insurance for financial institutions. WNC is a managing general underwriter, which means the company acts as a distribution partner for its insurance carriers.

As part of Frontenac’s “CEO1st” strategy of partnering with experienced management on its investments, Riley and Gross were brought in by the firm from Aon Risk Services of the Americas, which provides insurance, risk management and human capital consulting services.

“We have brought together an unbeatable team of insurance veterans with an experienced in-place management team, who together will lead WNC through its next growth phase,” Frontenac principal Patrick Blandford said in a statement. “We will look to augment WNC’s impressive record of performance with selective acquisitions that expand its product portfolio and client reach.”

Frontenac Company manages more than $1 billion in assets. In December, it led a $70 million capital commitment to the startup of Encore Legal Solutions, which provides legal information management services. In that deal, Frontenac invested alongside Milwaukee-based Baird Capital Partners and Cleveland, Ohio-based Primus Venture Partners, and partnered with industry veteran Lynn Graham, who had previously served as CEO of IKON Office Solutions.