Pine Brook, Others Commit $500M To Mortgage Insurer

By Shasha Dai

5/28/2009 – Pine Brook Road Partners and others have committed $500 million of equity to launch Essent US Holdings Inc., a start-up mortgage insurance company.

The breakdown of equity among Pine Brook and other investors, which include Goldman Sachs Group Inc., J.P. Morgan Chase & Co., PartnerRe and Renaissance Re Holdings Ltd., wasn't disclosed.

Janice Walker, a spokeswoman for Essent, declined to comment on whether Pine Brook or any other investor will take a majority stake in the new venture.

Essent, of Radnor, Pa., will offer insurance to mortgage lenders and investors through its monoline insurance subsidiary Essent Guaranty Inc., which is in the process of obtaining approvals for issuing insurance policies.

In a prepared statement, William Spiegel, managing director of Pine Brook, said the deal helps to "support the recovery of the U.S. housing finance system and bring much needed private capital to mortgage credit risk management."

Spiegel and other officials at the firm weren't available for comment.

The idea of launching such a venture came from Essent's management team, led by Chief Executive Mark Casale, who most recently served as president of mortgage insurer Radian Guaranty Inc. and previously worked for companies as Advanta Mortgage Corp., said Walker.

Casale and the investors believe the timing is right for getting into the mortgage insurance space.

"Despite the economic dislocation, introducing private capital helps to revitalize the private mortgage insurance industry," said Walker.

The investment is typical for Pine Brook Road, which closed its $1.43 billion debut fund in April. The firm seeks to commit from $100 million to $200 million a deal to launch companies, and infuses the capital into the ventures over time.