ADVENT CAPITAL TO BUY LLOYD’S UNDERWRITING AGENCY KINGSMEAD

Lloyd’s corporate vehicle Advent Capital has reached agreement with Fairfax Financial Holdings for Advent to acquire Lloyd’s underwriting agency Kingsmead and Heraldglen Ltd, a Lloyd’s corporate member that provides dedicated capacity to the three Kingsmead managed syndicates. Kingsmead’s syndicates, which have total capacity of £216m, are syndicate 2 (Paul Upton), a marine and excess-of-loss syndicate with a 2000 year capacity of £89.1m, syndicate 271 (David Higgins), an aviation reinsurance syndicate with a 2000 year capacity of £79.8m and syndicate 506 (Grahame Pipe), a non-marine syndicate with a 2000 year capacity of £47.3m. Advent merged last year with the managing agency of non-marine syndicate 780, BF Caudle. Syndicate 780 specialises in non-marine reinsurance, mainly treaty reinsurance, London market reinsurance, facultative and direct property, casualty and personal accident. For the 2000 year of account, syndicate 780 had capacity of £85m. Kingsmead and BF Caudle will continue to operate as individual units for the 2001 year with a combined managed capacity of £250m. At the same time as the acquisition a letter of credit will be put in place for £110m for the five underwriting years of account between 2001 and 2005 to support Advent’s funds at Lloyd’s. Following completion of the purchase, Fairfax will own 22% of Advent through its subsidiary Orc Re.