Lloyd's to recruit millionaires

LLOYD'S of London is launching a drive to attract wealthy individuals, only a decade after tens of thousands of Names - investors with unlimited liability - were driven out of the insurance market after its brush with insolvency.

One leading members' agency, CBS, plans to establish a collective investment fund to buy about £1bn of Lloyd's £14bn underwriting capacity.

CBS already acts for about 700 of the 1,600 individuals who still participate on the basis of unlimited liability.

Finance director Andrew Castell says that corporate investors, introduced to the market in the Nineties, have snatched most of the capacity on the best performers among Lloyd's 60 syndicates.

The new fund, which will operate rather like an investment trust, is aimed at those with at least £250,000, and more likely £1 million, of investable assets. Castell says investors in hedge funds and private equity might be interested in setting aside about 10% of their wealth for Lloyd's.

Current predictions suggest investors will generate a return of between 6% and 8% a year on their underwriting investment over an eight to ten year period. In addition they will reap investment returns on their capital.