Pine Brook Road Partners has joined forces with four banks and insurance companies to launch a US residential private mortgage insurance company.
The New York-based firm, together with Goldman Sachs, JPMorgan, PartnerRe and Renaissance Re, has invested a total of $500 million into creating Essent Group. Essent will provide private insurance to mortgage lenders, investors and government agencies when homebuyers are unable to pay a large enough deposit.
A spokesman for Essent declined to comment on the value of Pine Brook’s equity investment. According to media reports, Pine Brook managing director William Spiegel said the deal would help “support the recovery of the US housing finance system and bring much needed private capital to mortgage credit risk management”.
Essent will be led by Mark Casale, formerly president of mortgage insurance company Radian Guaranty.
In April, Pine Brook raised its debut fund with $1.4 billion in commitments. The firm had been fundraising since mid-2007 and had an original target of $1.5 billion. The vehicle will make equity investments of $100 million to $200 million and will focus on the financial services and energy sectors.