GCP Plots ClearView Platform, Sees Late ’11 Close for Third Fund

GCP Capital Partners will spend $23 million to acquire a controlling stake in ClearView Risk Holdings, operator of Texan insurance broker Southwest Risk.

As part of the investment, said Bob Deutsch, managing director, GCP is also plotting to make strategic acquisitions to support ClearView’s development. Aside from GCP, Bryan Wilburn, the founder and CEO of Southwest Risk, and Houston International Insurance Group will remain as co-investors in ClearView. Southwest Risk will undergo a brand switch, to ClearView Risk.

Part of GCP’s bet, Deutsch told peHub, is that interest rates will increase, which is expected to provide a lift to insurance brokerages. “Higher interest rates should lead to higher pricing” for policies, he explained.

If this is the case, GCP assets will go along for the ride as interest rates are projected to begin to lift from historic lows in the three to four percent range. The private equity firm has already invested in, via prior funds, Acrisure, a Midwest-based brokerage; Validus Holdings, Ironshore Inc. and Harbor Point Re, each separate Bermuda reinsurance companies; and Paris Re, a property and casualty reinsurer.

While Deutsch acknowledged existing GCP assets have synergies to, and in some cases, already have business with, ClearView Risk Holdings, he said the company will remain independent from other GCP insurance companies.

The deal represents GCP’s first investment from its third fund, which already has $200 million committed, Deutsch said.

GCP held its first close on its third U.S. fund in November, Deutsch said, and will hold its second close in April 2011, followed by its third and final close in November 2011. The fund will be no larger than $1 billion at close, Deutsch told peHub.