Private equity firm Fortress Investment Group has made its first foray into the insurance market, acquiring ailing reinsurer Alea Group Holdings for £162m.
In the past 18 months Alea, hit by losses from hurricane Katrina, has sold off its core business offerings and pursued an aggressive run-off strategy.
Fortress,which has considerable experience outside the insurance sector, and assets of over £30bn, has purchased Alea's remaining portfolio in the US, London and Switzerland.
It insisted that it intended to back the current management.
Mark Cloutier, chief executive of Alea, commented: "We will continue to adjust management and staff levels as the needs of the group change and as we move through the run-off process.
"We suffered a very small operating loss in this challenging year of transition, and are very pleased with the substantial progress we have made in terms of preserving and de-leveraging our capital base."
Alea reported losses of £0.8m in 2006, down from £178.9m the previous year. Net premiums fell by 75% to £215.9m.
Last year, the company suffered a slew of high profile departures, and saw a staff reduction from 284 to 137.
Fortress has secured the backing of 55% of Alea shareholders, and is expected to obtain the additional 20% necessary for amalgamation approval at a special general meeting later this month.
The acquisition will become effective in the summer.