LONDON (Bloomberg) ? Bermuda-based XL Capital and Barclays Plc are among investors raising 231 million pounds ($414 million) in an initial public offering of UK insurer Admiral Group Plc, people familiar with the sale said.

Barclays Private Equity, XL and the group sold 84.1 million shares at 275 pence each, valuing Cardiff, Wales-based Admiral at about 714 million pounds, said the people, who declined to be identified. Barclays cut its stake to 18 percent from 53 percent and XL sold its entire 5.4 percent holding. The shares were on sale for 245 pence to 300 pence apiece.

Buyout firms including Kohlberg Kravis Roberts & Co. and Soros Private Equity have raised more than $2 billion selling European companies in stock sales this year.

Barclays raised about 16.8 million pounds in July selling a stake in NCC Group Plc, which insures businesses against the collapse of their software suppliers. It backed a management buyout of Admiral in 1999.

"There should be some upside," said Brian Moretta, who helps oversee $1.6 billion of funds at Edinburgh-based SVM Asset Management and plans to buy the shares. "Admiral is a direct writer of insurance and definitely has the sort of business model that is going to work going forward."

Admiral targets customers who traditionally pay higher-than- average premiums, such as younger drivers living in cities. The company, started in 1993, sells car insurance directly to the public through the Admiral, Bell Direct and Diamond brands.

Caroline Ledosquet, a spokeswoman for Admiral, and XL Capital spokeswoman Caroyln Moss declined to comment. Barclays referred calls to Robert Bailhache, a spokesman from the public relations firm Financial Dynamics who declined to comment.

Merrill Lynch & Co. is managing the sale, with Citigroup Inc. assisting. The banks have an option to sell a further 12.6 million shares under the so-called over-allotment option, increasing the total amount raised in the IPO to about 266 million pounds.

Admiral shares start trading in London under the symbol "ADM" tomorrow.