NEW YORK–Caution and selectivity were the words used to describethe acquisition strategy being employed by three chief executivesof privately held brokerage firms at a recent insurance conferencehere.

The comments came during a panel discussion here this week atthe Standard & Poor's “Insurance 2008 Conference: OperatingWithin a Global Economy.”

Martin P. Hughes, chairman and chief executive officer ofChicago-based Hub International, said his brokerage has two goalsin mind when it looks at an acquisition: footprint and margin. Henoted that Hub has an established footprint now, so he is moreconcerned with the margin when considering a deal. He said that ifhe feels a deal will not build more margin, then he will notexecute it.

Both Mr. Hughes and John Howard, president and CEO of Roseland,N.J.-based Crump Group Inc., said they do not feel pressure toacquire or merge, and Mr. Hughes cited that lack of pressure as abenefit of being a private broker.

Mr. Howard said his brokerage is looking for opportunisticacquisitions. He said it is not about trying to expand into anymore geographical regions for Crump so much as whether anacquisition will help the brokerage be more successful with respectto a particular product or service.

Michael J. Sicard, chairman, president and CEO of USI HoldingsCorp., based in Briarcliff Manor, N.Y., said the firm isconcentrating now on organic growth to supplement the acquisitionsit has made.

The brokers agreed that acquisitions in the brokerage world havea lot to do with people, and bringing those people into a certainculture. Mr. Howard explained, “When we acquire firms, we getpeople and relationships and not a lot else.”

Mr. Sicard said that looking at acquisitions is similar tolooking at prospects and clients in that a brokerage should notjust do whatever it can to get people in the door. If the peoplethat make up a potential acquisition do not want to be part of theestablished culture of the purchasing brokerage then that issomething to consider.

Mr. Hughes said he is concerned more with the sales force thatis being acquired than with the management team. He added that hedoes not worry too much about the technical aspects of a deal, butinstead focuses on locking up the producers.

Speaking regionally, Mr. Hughes said he does not see muchopportunity right now in the U.S. for acquisitions. Part of thereason is that the pricing for an acquisition is too high, henoted, adding that he will not do a deal until the pricing comesdown from where it is. He said he sees more opportunity foracquisitions in Canada, and that he will likely expand there.

The brokers also spoke to the advantages of working with privateequity partners as opposed to going public. Crump's Mr. Howard saidhis brokerage has flourished by not having to deal with the“distractions” of public companies.

USI's Mr. Sicard expanded on this by noting that he hasexperience in both areas. He was with Willis when the brokeragewent private and then public again. Now, at USI, he is not asworried about short-term results as much as doing things that heknows will be beneficial in the long term. He noted that GoldmanSachs, USI's private equity partner, generally sticks to five-yearplanning, which helps USI focus on longer-term objectives.