GTCR invests $200m in specialty insurance company

The Chicago-based firm has been busy in the market downturn, spending nearly $500m in the past few months to set up platforms for medical devices and pharmaceuticals.

GTCR Golder Rauner will invest $200 million in Ironshore, a specialty insurance company, as part of a financing package that will inject up to $300 million in the company.

“The insurance industry has been an area of focus for GTCR within our broader financial services practice,” David Donnini, principal at GTCR, said in a statement. “Specialty insurance represents one of the most compelling areas of the property and casualty insurance industry.”

GTCR will be the lead investor in a group of existing investors that will provide the financing. The equity injection will help Ironshore expand its product offerings, the company said. Ironshore hired insurance industry veteran Kevin Kelley as chief executive in 2008, along with several other industry executives to help the company enter new lines of business.

Ironshore underwrites professional liability, medical malpractice, environmental, property liability and casualty business from offices throughout the US. The company also writes property catastrophe and property all-risk coverage for small- to mid-sized commercial risks through its Bermuda headquarters. In London, specialty coverages are underwritten at Lloyd’s through Ironshore’s Pembroke Syndicate.

GTCR has been busy in the market downturn, investing more than $600 million from its $2.75 billion ninth fund, which closed in 2006.

In April, the firm spent $200 million to buy the rights to several classic pop culture characters, including Lassie, the Lone Ranger, He-Man and Rudolph the Red Nose Reindeer, from UK media company Entertainment Rights.

GTCR exited Ovation Pharmaceuticals in an all-cash transaction including payments of up to $900 million to Danish pharmaceuticals company Lundbeck, and a few days later set up a $200 million pharmaceuticals platform with Abbott Laboratories veteran Ed Fiorentino.

The firm also invested $250 million to create a medical devices platform last November in partnership with former Cardinal Health senior executive Thomas Daulton.

GTCR was founded in 1980 and has more than $8 billion under management.