News 2001

Arch Capital Group Announces Close of $763 Million Private Equity Investment Led by Warburg Pincus and Hellman & Friedman

NEW YORK--(BUSINESS WIRE)--Nov. 20, 2001--Arch Capital Group Ltd., a Bermuda-based insurance holding company (Nasdaq: ACGL), today announced that it has closed $763 million in private equity funding led by private equity firms Warburg Pincus and Hellman & Friedman. This financing increases the company's capitalization to over $1 billion of invested capital.

On October 24, 2001, the Company announced the launch of an underwriting initiative to meet current and future demand in the global insurance marketplace.

Peter Appel, President and CEO of Arch Capital, said: "The two most important components of our new initiative--the management team and a $1 billion capital base--are now in place. Our team, led by Paul Ingrey, is already in Bermuda helping to meet the increased demand for insurance and reinsurance products. Arch is now a key participant in the global insurance marketplace."

Paul Ingrey, Chairman and CEO of Arch Reinsurance, said: "The benefits of Arch's existing platform have become readily apparent. We've already been reviewing submissions, quoting terms and binding policies. With more than $1 billion of fresh capital, we are a significant source of capacity for the upcoming January renewal season."

Altogether the investment totaled $763 million. Warburg Pincus and Hellman & Friedman led the financing, investing $405 million and $225 million, respectively. Other institutional investors included funds affiliated with GE Capital, GE Asset Management, Trident II, LP, and Farallon Capital Management. Included in the financing, management co-invested a combined $13.15 million.

The company also announced that Kewsong Lee, a Managing Director at Warburg Pincus, and Jack Bunce, a Managing Director at Hellman & Friedman, will join the board of directors.

"Arch is open for business," said Warburg Pincus' Kewsong Lee. "Instead of being distracted by raising money and building infrastructure, the Arch management team can focus on underwriting insurance to grow this company."

Added Jack Bunce of Hellman & Friedman, "We are confident the insurance market will value Arch's key assets--knowledgeable underwriters and lots of clean capital."

The company's reinsurance team, also announced last month, includes industry veterans Ingrey, formerly Chairman of F&G Re; Dwight Evans, formerly Executive Vice President, North American Property for St. Paul Re and F&G Re; and Marc Grandisson, Vice President and Actuary of the reinsurance division of Berkshire Hathaway. Together they represent more than 70 years of combined management experience in the reinsurance business.

About Arch Capital Group Ltd.
Arch Capital Group Ltd., through its subsidiaries, provides reinsurance and insurance products on a global basis. Upon the closing of this transaction, Arch Capital will have more than $1 billion in equity capital.