Legge believes demand will be high for the new practice, despite a record decline in H1 transactions
For Jonathan Legge, the timing of his arrival at One80 Intermediaries to establish a private equity and transactional liability practice couldn’t be better.
Although he joins after a record decline in first-half M&A, the industry veteran says it’s exactly this type of environment where PE firms are most keen to optimize their portfolio programs. What’s more, his arrival now means the wholesale broker and program manager will be ideally placed to help retail partners protect insureds from M&A exposures when the market picks up.
Legge notes that private equity is invested in close to 19,000 companies in the US making it a significant part of the US economy. As a result, retail brokers benefit from understanding the priorities of PE owners.
“Whether a broker focuses on PE or not, they are likely serving and prospecting PE-backed companies and with deal flow slower PE will look at their portfolio programs and say, ‘are there ways to better economize, do we have the right coverage’?”
“There are fewer transactions, there are fewer representations and warranties deals to be done but more effectively managing an existing portfolio program is still relevant and probably more relevant,” adds Legge, who joined One80 in July as senior managing director from Ethos Specialty. Legge’s previous three decades in insurance have included running the financial products segment of Marsh’s private equity and M&A business.
One80 is ideally positioned to understand the needs of financial investors through the deal cycle, as well as all manner of companies engaged in M&A, Legge adds. Backed by Kelso & Co., Boston-based One80 has itself struck more than 50 deals since its inception in 2020. These include the purchase of Cincinnati Intermediaries, Professional Risk Solutions, Agentic, ProSurance Group and Pearl Companies, which together comprise a significant financial lines proposition. One80 sees private equity and transactional liability as a natural extension.
“We have really strong PE backing and a history of M&A, which really dovetails with what we can bring to the retail broker,” says Legge. “It’s not academic to us – it’s part of what we do.” “It is very much, ‘how we can win for the client?”
Globally, the number of deals worth over $100 million slowed by 37% year-on-year to 280 in the first half, according to Willis Towers Watson and the M&A Research Centre, with North American acquirers underperforming the overall index. Moreover, Standard & Poor’s recorded the fewest $10 billion-plus deals — 11 — for any first half since the height of the pandemic in 2020.
Interest rate rises and economic uncertainty have in recent months spooked investors but an emerging consensus suggests the US may escape a recession, with markets already looking ahead to the start of a Fed rate-cutting cycle.
When the dealmaking recovery comes, Legge predicts it will be driven by middle market transactions and corporate spinouts, with the titans of the PE world making fewer but “more impactful” purchases.
As deal flow picks up Legge plans to expand transactional insurance covers beyond representations and warranties.
“Tax insurance, contingency risk, IP wraps – there are all sorts of transactional products I would like us to build out over time,” he said. “The market for M&A is going to come back and we will have our systems and capability all lined up for when it does.”
He adds, “To try to jump in during a really active market is a bit like jumping into a roaring river – it’s a little bit easier when it’s slower.”
Legge is a seasoned transactional risk and private equity specialist. Having started his insurance career at AIG he joined Marsh’s PE and M&A practice on its acquisition of Johnson & Higgins in 1997, rising to become leader of its FINPRO global private equity practice.
“We did the first portfolio programs, among the first reps and warranties deals and some of the first tax deals,” he said.
In 2008, Legge co-founded the company that would become alternative asset management specialist broker Vanbridge, moving from there to Ryan Specialty Group to build its transactional risk capability on subsidiary Epic’s purchase of Vanbridge in 2018. Legge was most recently executive vice president at Ethos, where he was head of strategic relationships focused on third-party capital and broker relationships.
One80’s focus on nichespecialisation “made it an interesting choice for me as those attributes will assist in our build-out of transactional products and PE solutions,” he says.
“Its collaborative approach has also impressed me – it is very much, ‘how we can win for the client?’ – as has the high level of expertise across the organisation.”
He adds, “I really enjoy working with retail brokers to provide market leading expertise and facilities to serve their clients. I’m looking forward to digging deeper into the capabilities of One80 and identifying ways in which we can best support our brokers and clients in the PE and transactional liability space.
*This article was reposted with permission from Insider Engage.