Amid intense legal and regulatory scrutiny, financial services company Marsh & McLennan is reportedly considering alternatives for its $3 billion (€2.3 billion) private equity arm, MMC Capital. Those alternatives include selling the business to a third-party or even closing MMC altogether.
A spokesperson for Marsh declined to comment.
Late last year, Marsh announced that the Securities and Exchange Commission had requested information on “related-party transactions” between Marsh and its MMC Capital subsidiary. At the time, Marsh said it would fully cooperate with the SEC investigation.
Two months earlier, New York Attorney General Eliot Spitzer had filed a civil lawsuit against the financial services company, accusing Marsh’s insurance brokerage unit of rigging insurance bids. Marsh is currently in settlement talks to resolve the charges.
Over the summer of 2004, MMC Capital raised $1.1 billion in commitments for its third fund, Trident III, to make investments in the global insurance, employee benefits and financial services industry. Since 1994, MMC Capital has raised more than $3 billion.
MMC Capital is led by chief executive officer Charles Davis.
The private equity affiliate mostly manages third-party capital. But according to a New York Times report, Jeffrey Greenberg, ousted in October 2004 from his role as Marsh CEO, was a major investor in previous Trident funds. Fund III barred Marsh directors from committing capital, according to the report.
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