The sixth largest US financial institution, First Union Group, which has $250bn in assets, has increased its shareholding in the Lloyd's broker Besso Holdings from 5% to 20%.

Besso chief executive Colin Bird, who led a management buy-out in 1995, said First Union Group had wanted to acquire the whole brokerage.

He said it was surprising that First Union, although it has a long association with Besso which has acted as its brokers for 18 years, would be seeking to make such a relatively small purchase.

"First Union would not normally invest in a company with less than £100m in turnover," he said.

Besso staff now own 58% of shares, while the remainder is owned by First Union Group and Brian Marsh, who was previously of Nelson Hurst & Marsh.

Turnover increased by 33% in 1999 to £8,530,880 and profits on ordinary activities before tax increased by 77% to £1,118,855.

Bird says that Besso is on target to surpass more than £12m in brokerage for this year, with about £2m generated from a joint internet venture in the US called erisk which sells directors' and officers' cover.

The Lloyd's broker, which mainly targets the US market, is also eyeing the new UK solicitors professional indemnity market.

"We have experience of running solicitors professional indemnity schemes in the USA," said Bird. "There are a number of highly innovative ways, which are not done here, which we are considering to target the market."

Besso has also entered into a joint venture in the UK with Dispute Resolution Management, a specialist in environmental issues. It's main areas of specialisation are Directors' and Officers' liability, professional indemnity, medical malpractice, excess liability and property/auto physical damage facilities.