Aquiline-Backed CRT Said to End Merger Talks With Pierpont

CRT Capital Group LLC and Pierpont Securities LLC have ended talks to combine the brokerage firms after failing to reach an agreement, according to two people with knowledge of the matter.

Pierpont and CRT, backed by Aquiline Capital Partners LLC, had been negotiating terms for a merger since August and called off negotiations this week, said the people, who asked not to be identified because the talks are private.

Pierpont, which expanded its debt-trading unit with $200 million from Stone Point Capital LLC and General Atlantic LLC in 2010, exited its high-yield bond and loan business as 11 people resigned, Karen Ogden, the firm’s chief administrative officer, said last month.

Tripp Kyle, a spokesman for Aquiline, said he couldn’t comment, as did Pierpont’s Ogden. Stephen Friedman, Stone Point’s chairman and a former Goldman Sachs Group Inc. chairman, and William Ford, chief executive officer of General Atlantic LLC, didn’t return e-mails seeking comment.

The Stamford, Connecticut-based firms have sought to profit from a retrenchment by Wall Street’s biggest banks in the wake of the worst financial crisis since the Great Depression. Smaller brokers are now combining or closing as bigger banks tighten their grip on trading volumes that have failed to keep pace with a corporate-debt market that’s grown 70 percent since 2008. Gleacher & Co. said in April it was closing its fixed-income unit and Knight Capital Group Inc. agreed to sell its debt-brokerage to Stifel Financial Corp.

CRT Expansion

CRT increased its debt operations after receiving a $225 million investment from Aquiline, the private-equity firm led by Jeff Greenberg, in 2010. The firm doubled its staff within two and a half years and acquired Braver Stern Securities LLC’s sales and trading team in 2011 after that broker’s attempt to expand failed. Greenberg was the former chairman and CEO of Marsh & McLennan Cos. before founding Aquiline in 2005.

Pierpont agreed to merge last year with Cortview Capital Holdings Inc., which received a $125 million commitment from Warburg Pincus LLC, according to a statement from the firm at the time.

Private-equity firms saw an opportunity to invest in broker-dealers as the biggest Wall Street firms reduced the amount of capital they committed to facilitate corporate-bond trading in the wake of Lehman Brothers Holdings Inc.’s collapse in 2008. The 21 primary dealers that do business with the Federal Reserve reduced their holdings by 76 percent from the peak in October 2007 through the end of March, when the central bank started reporting the data differently.

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