The Group said it plans to follow the launch of its auto operation with a series of other investment funds to focus exclusively on purchasing portfolios of insurance industry subrogation claims.

Thomas Bryan, a principal and general counsel for inaugural fund, said it is expected to be capitalized in a few months with a minimum of $30 million.

"We expect an equity close the end of June. We already have $25 million lined up and have line of credit for $30 million," he said.

Mr. Bryan said investors who are involved include "wealthy individuals, investment bank types and some industry players."

He said the fund would specialize in buying the subrogation rights of automobile-related insurance claims limited to vehicle physical damage.

The company said the follow-on funds it plans to establish would total $250 million over the next thirty-six months.

Scott Conant, one of the firm's principals, said: "Through this fund, we have created unique capital and cash flow solutions for insurance companies and state insurance funds throughout the country.

"Typically, these enterprises carry subrogation claims on their balance sheet as receivables, but until now, they have had to endure a lengthy and costly collection process before actually realizing cash payments."

Subrogation claims are filed by insurers against parties who have caused damage or injury to one of their policyholders whom they have reimbursed for the loss.

Mr. Conant, a 30-year veteran of the insurance industry and a former KPMG consultant, said by providing up-front cash payments for portfolios, the Group can offer an alternative remedy to insurance companies focused on balance sheet and operating performance.

The Group "can be an important source of liquidity for companies faced with cash flow challenges and capital deficiencies."

The fund's criteria for portfolio purchases will include a valuation process that employs highly sophisticated computer modeling techniques developed by Subrogation Partners, Inc. in Farmville, N.Y., which has been involved for eight years in technology-based claims recovery services.

Mr. Bryant said the system evaluates the different cases involved in a whole portfolio on the likelihood of recovery and the amounts involved and that the group would pay accordingly. As an example, he said a car hit from behind, generally a non-contestable claim, would be rated platinum.

Once the portfolio is purchased, "We would essentially assume the position of the carrier and process them the normal way we do now. He said this generally involved intercompany arbitration or negotiation. In the one percent of the cases that require litigation, the Subrogation Partners firm has a national network of counsel it can employ.

Mr. Bryan said the model to be used is "a matrix we've developed in the last year."

"We have used eight years of the recovery company data as a test and its worked out nicely," he said.

Mr. Bryan said there has already been considerable interest from a number of potential "portfolio sellers," and "equally important, we have had an overwhelming response from the banking and investment communities. Many of the fund's prospective investors and strategic partners believe that we have identified a new institutional investment asset class."

The fund's Advisory Board is comprised of Joseph Termini, former New York State Insurance Department special deputy superintendent; Vincent Mistretta, Sr., former New York State Insurance Department executive director; Kieran Sweeney, former president and chief executive officer of Arrowhead General Insurance Agency, and Linda Lamel, a former College of Insurance president and vice president of TIAA-CREF.

Subrogation Partners said it has processed more than $1 billion in claims on behalf of 80 insurance companies and state liquidation bureaus throughout the United States. The firm said the company's management team designed SubroAGS, a Web-based platform technology solution to improve work flow processes and returns on subrogation.

Subrogation Partners is located on the Internet at www.SubroPartners.com