MARSH SURVEY SHOWS PRIVATE EQUITY FIRMS HAVE INCREASING AWARENESS OF POTENTIAL LITIGATION
FINDINGS SHOW A SERIOUS GAP BETWEEN PERCEPTION AND CURRENT DATA

LONDON , 27 June 2007 – Almost half of private equity firms believe they will face an increased level of lawsuits over the next two years, according to a survey by Marsh, the world’s leading insurance broker and risk advisor. Asked whether the legal action brought against private equity firms in the next 24 months will increase, decrease or remain the same 47% expected it to increase, while 43% said it would remain the same. Only 6% thought there would be less legal action.

The survey also found that private equity firms expect regulators to be the single biggest influencer of potential allegations with 83% citing them as a likely litigant. However, the reality is that regulators today account for just 2% of legal actions, according to actual Marsh claims data.

Marsh’s claims data also reveals that minority shareholders of private equity-backed businesses are bringing the most allegations, representing 46% of claimants in US and 21% in Europe. The most common allegation in both the US and Europe was in relation to a breach of fiduciary duty. Karen Beldy Torborg, Global Leader of Marsh’s Private Equity and M&A Practice, said this finding isn’t surprising given the complexity in separating what can be perceived as the dual capacities of a private equity professional. "They can be seen as both a private equity investor and an outside director of the companies they invest in," said Ms. Beldy Torborg. "It’s a unique situation, which brings with it an array of risks that must be fully understood and managed."

Additional findings in the survey found that media attention was considered by half of respondents (51%) as a likely catalyst for increased litigation against private equity. Trade union involvement and government intervention were also considered to be significant influencers of increased litigation by asignificant portion (42%) of respondents.

Ms Beldy Torborg added: "The complexity of private equity transactions and the phenomenal growth of the industry have sharpened private equity’s focus around risk."

The report surveyed over 150 leading private equity firms across Europe, the Americas and the Asia Pacific. Marsh is the leading risk advisor to the private equity market.

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About Marsh:

Marsh, the world's leading risk and insurance services firm, has 26,000 employees and annual revenues approaching US$5 billion. The firm provides advice and transactional capabilities to clients in over 100 countries. Marsh is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with approximately 55,000 employees and approximately US$12 billion of annual revenues. MMC also is the parent company of Guy Carpenter, Kroll, Putnam Investments, and Mercer. MMC’s stock (ticker symbol: MMC) is listed on the New York, Chicago, Pacific, and London stock exchanges. MMC’s Web Site is www.mmc.com. Marsh’s Web site is www.marsh.com, and in China www.marsh.com.cn