company and one of the world's biggest money managers, said it will buy a 24.1 percent stake in Hong Kong-based investment bank Peregrine Investments Holdings Ltd. for US$200 million.

The transaction values Peregrine at US$830 million, a 9.8 percent premium to Friday's closing share price of HK$6.80.

Zurich's investment comes after Peregrine -- one of Asia's biggest investment banks outside of Japan -- last month said it suffered losses in equities and derivatives trading as the Hong Kong stock market collapsed in October.

On November 1, the Japanese Bond Research Institute, Japan's largest credit rating company, placed Peregrine's credit rating on review with "negative implications'' saying it faced "pressure on its financial strength'' due to turmoil in Asian markets.

"This investment not only strengthens our substantial capital base, but also deepens our relationship with a well- respected, multinational company that brings to Peregrine extensive financial services knowledge and technical expertise,'' said Philip Tose, chairman of Peregrine.

Bermuda-based Zurich Centre Investments Ltd., the private equity arm of Zurich Group, will receive convertible preference shares with full voting rights, as well as three seats on an enlarged nine-person board of directors. The convertibles may be exchanged for common shares at any time from January 1, 2001 to December 31, 2004 at a price of HK$8 per share.

The investment, conditional on the approval of Peregrine's existing shareholders, would make Zurich the largest shareholder in Peregrine. The second largest shareholder will be Peregrine International Holdings Ltd., whose 26.6 percent stake will be reduced to 20.3 percent.

Peregrine International is a private company who's owners include Tose and managing director Francis Leung.

Sixty percent of the company is publicly held. That will be reduced to 45.4 percent.

The transaction is the latest in a series of high-profile purchases by Zurich Group.

"Our investment in Peregrine takes place after lengthy and in-depth discussions with the senior management of Peregrine and is based on our confidence in that management team and our view of the company's ability to continue as a leading player in the Asian capital markets,'' said Steven Gluckstern, chief executive of Zurich Centre Investments, in a statement.

Gluckstern, Zurich Centre managing director Adam Mizel, and Zurich Insurance Co. Chief Investment Officer Laurence Cheng will join the Peregrine board.

Under Tose and Leung, Peregrine has grown from a small private firm selling Hong Kong stocks well before their time, into one of Greater China's most aggressive investment banks. In 1996 and the first nine months of 1997, Peregrine was the top underwriter of Asian stock sales. The group has 33 offices in 15 Asian countries as well as major financial centres. In 1996, Peregrine generated pre-tax profits of HK$1 billion.

The company is also one of Asia's best connected, boasting longtime links to some of Hong Kong's most powerful corporate leaders, including Cheung Kong Holdings Ltd. billionaire Li Ka-shing and Hopewell Holding's chairman Gordon Wu as well as China-backed companies including Citic Pacific and Chinese government investment vehicles.

Tose has boasted that he can approve a deal on the basis of a phone call that bigger, more bureaucratic rivals would take days or weeks to study. The firm's traders are reckoned to be among Hong Kong's savviest.