After years of rumors about its future, the boutique broker Fox-Pitt, Kelton Ltd. of London said Friday that it would separate from its parent company, Swiss Reinsurance Co.
Fox-Pitt, which has a significant presence in New York, announced a takeover by its management and the private equity firm J.C. Flowers & Co. of New York. The deal had been rumored earlier in the week.
Though J.C. Flowers will be the majority owner, Swiss Re, of Zurich, will retain a minority interest. No financial terms were disclosed.
Fox-Pitt was founded in 1971; Swiss Re bought it in 1999. Giles Fitzpatrick, who will remain Fox-Pitt's chief executive, said in a press release: "We are excited about reintroducing employee ownership and by partnering with such a high -quality investor."
J.C. Flowers is an investor in financial services worldwide. Its chairman, J. Christopher Flowers, is a former partner of Goldman Sachs Group Inc.
In 2000 his firm, along with Ripplewood Holdings LLC, took over the troubled Shinsei Bank Ltd. of Tokyo. Mr. Flowers is a director of Shinsei, and Fox-Pitt helped it last year with a $2.9 billion secondary offering.
J.C. Flowers tried to acquire a stake in the bankrupt futures trading firm Refco Inc. last year but eventually backed out.
A spokeswoman for Fox-Pitt said its management will not change. Alan Badanes leads global corporate finance, Hank Erbe global equity capital markets, and Blair Smith U.S. equities and sales. The U.S. research unit is led by several senior executives.
Though a small force in U.S. bank mergers and acquisition, Fox-Pitt is renowned for its bank and insurance research in New York and London. In Europe and Asia it has advised various insurance companies on deals and securities offerings, but the total value of the deals on which it advised has declined over the years, according to Bloomberg LP.
Last year it was an underwriter in China Construction Bank's $8 billion initial public offering and a $2.1 billion MetLife Inc. securities issue. In 2004 it helped MetLife sell its Spanish operations to Liberty Mutual Insurance Co.
The last couple of years have been a roller-coaster ride. Speculation about Swiss Re's plans followed management changes and defections.
