Pine Brook closes $1.4B maiden fund
Thomas Zadvydas

Pine Brook Road Partners LLC has closed its first fund.

The New York private equity firm announced Tuesday, April 7, that it had completed fundraising for Pine Brook Capital Partners LP with $1.43 billion in capital commitments. The firm said it will target equity investments between $100 million and $200 million in the financial services and energy sectors.

The fund is managed by a team of eight managing principals led by CEO Howard Newman. The others are Arnold Chavkin, Joseph Gantz, Robert Glanville, Robert Jackowitz, Craig Jarchow, Michael McMahon and William Spiegel, the former president of Cypress Group LLC.

Newman was vice chairman at Warburg Pincus for 22 years before founding Pine Brook in 2006. Prior to Warburg, he was an investment banker at Morgan Stanley. "It was time for me to have my own firm," he said.

Ben Sullivan, Bill Riddle and Mike Sutka at Lazard acted as placement agents for the fund. Tim Clark at Covington & Burling LLP was legal counsel.

Newman said his firm is not focusing on the traditional leveraged private equity buyout model. "We do what we call business building investing," he said. "We provide the capital a management team needs to build out its business over a number of years."

Newman was involved in growth investments in financial services and energy during his time at Warburg. The new fund currently has nine investments across both sectors.

These include oil and gas production companies Common Resources LLC and Stonegate Production Co. LLC and insurance providers Aurigen Re Capital Ltd. and Narragansett Bay Insurance Co. "Continuing to grow them is our first priority. The second is to do additional transactions in our space," Newman said.

Pine Brook Capital will advance capital into investments over time as risk declines. "They are mature, capital-intensive businesses, which need equity capital on a continual basis to run," Newman said. "We're looking a number of things, two on the energy side, a couple in financial services," he said of the new investments. He declined to give a time horizon.

Speaking at Houston energy conference CeraWeek in February, Newman said he was very comfortable investing "in the drill bit" and thought there were opportunities, given that lower oil and gas prices had driven down the prices of many companies in the space.

During his tenure at Warburg, Newman was directly involved in $3.3 billion in private equity investments in 47 companies, including Newfield Exploration Co., Spinnaker Exploration Co., Kosmos Energy LLC, Competitive Power Ventures Inc., Gryphon Exploration Co., Marine Drilling Cos., Encore Acquisition Co., RenaissanceRe Holdings Ltd., Mellon Bank Corp. and Dime Bancorp Inc. He maintains a seat on Newfield's board.