Names lured by 30% return

A new wave of Names is set to join Lloyd's.

A major drive to woo private investors is targeting experienced investors and business people with the lure of 30% return on capital.

But whereas Names of the past faced unlimited liability, today's investors will enter the market via limited liability companies - dubbed NameCos.

They risk only the money in the NameCo.

Leading members' agent Hampden Agencies is launching a recruitment drive -its first for more than a decade - setting with a minimum investment of £400,000.

Chief executive Nigel Hanbury said current market forecasts could give a return on capital of 30%.

The time was right to recruit new Names because of the market's current strength, he said.

He added that Lloyd's was in good shape despite the WTC losses, it had escaped the equity meltdown afflicting other parts of the industry and its asbestos liabilities were taken care of via its run-off vehicle Equitas.

Traditional benefits remained, such as the chance effectively to use assets twice.

Entrance costs for an investor using Hampden are £8,000 for a £1m NameCo and £2,250 to cover the red tape associated with being in business.

Hampden has 605 unlimited liability Names, 500 NameCos and the lion's share of the market in running NameCos.

It had not set recruitment targets.

Hanbury said today's investors were more professional than the traditional image of inherited wealth associated with Names.

"Our Names left now are extremely savvy and usually successful businessmen in their own right," he said.

"We need to capitalise at the top of this market cycle, but no cycle is the same as the one before and members' agents will be more aggressive in adjusting their Names' exposure as the cycle develops."

Gearing mechanisms would be used to boost investors' underwriting in boom times, and withdrawn as the market softened.