GTCR buys $1.4bn BofA insurance unit

Russell Investments' former CEO Andrew Doman will take over the reins at Premium Credit, which specialises in insurance payment plans.

Chicago-based private equity firm GTCR has acquired Premium Credit from Bank of America subsidiary MBNA Europe.

Terms of the transaction were not disclosed, though the firm said in a statement that the company's total asset value was approximately £900 million (€1.12 billion; $1.45 billion). Premium Credit’s primary business allows customers to pay insurance premiums in installments rather than annual lump sums. The company also provides payment facilitation and financing services for professional fees, school fees, membership subscriptions and other commercial services.

The investment was made by the firm's Fund X, a $3.25 billion, 2011-vintage vehicle. 

The firm is partnering with new and existing management on the deal, which it said will include a recapitalisation of the business to invest in future technology and service offerings.

GTCR has recruited a well known CEO to lead the business, bringing on Andrew Doman, former chairman and CEO of Russell Investments and former head of insurance consulting for McKinsey in London. Premium Credit’s current chief executive Nick Pearce will stay on as a consultant and member of the company’s board of directors.

“First and foremost, we like to spend time looking for proprietary situations … we often do that by bringing in new management to complement existing management,” said GTCR managing director Collin Roche. “It really fits the profile of what we like to do, in this case a corporate carve-out.”

GTCR has invested more than $10 billion since inception. The firm was founded in 1980.