In addition to the equity stake, XL has committed to invest $500 million, over time, in FrontPoint Partners investment products.
Brian M. O'Hara, President and Chief Executive Officer of XL, said: "XL is an innovative group of companies which is always exploring new business models. We believe FrontPoint has developed a new approach to alternative asset management that will provide us with a range of opportunities to further diversify our Financial Products and Services business."
XL's Executive Vice President and Chief Investment Officer, Christopher Greetham, said: "Our investment in FrontPoint is part of the continued development of our strategic investment management capabilities through diversified affiliate manager relationships. These relationships complement our strategy in the alternative asset area while providing XL with access to different core competencies across multiple investment strategies. We will continue to seek opportunities to acquire shareholdings in the very best investment talent across different sectors of the capital markets as we formalize our strategic partnership program and continue to add value to the XL franchise."
Sarah E. Street, Chief Executive Officer of XL subsidiary, XL Capital Investment Partners, Inc., said: "The FrontPoint transaction is an exciting one for XL Capital Investment Partners, which was formed earlier this year to develop XL's alternative asset management business. We share a common vision with the principals of FrontPoint regarding the direction of the industry and how alternative asset management firms must evolve in the future."
XL will receive three seats on the board of FrontPoint, whose founders include: Philip Duff, the former Chief Operating Officer at Tiger Management and a former Chief Financial Officer of Morgan Stanley; Gil Caffray, former head trader at Tiger Management and the former managing director of global trading at Weiss International Management, and Paul Ghaffari, former portfolio manager at Soros Fund Management and managing director at Morgan Stanley Asset Management.
XL Capital Ltd, through its operating subsidiaries, is a leading provider of insurance and reinsurance coverages and financial products to industrial, commercial and professional service firms, insurance companies, and other enterprises on a worldwide basis. As at September 30, 2001, XL had consolidated assets of approximately $25.7 billion and consolidated shareholders' equity of approximately $4.8 billion. More information about XL is available at www.xlcapital