Charles Davis and Stephen Friedman to strengthen its business of investing in insurers and related ventures.

Davis, 49, will serve as president and chief operating officer of Marsh & McLennan Risk Capital Corp., an investment unit of the world's largest insurance broker. Davis oversaw the investment banking services division of Goldman Sachs from 1991 to 1994. The unit maintains relationships with blue chip corporate clients.

Friedman, a 60-year-old former chairman of the New York-based investment banking firm, will be a senior advisor to the Marsh & McLennan subsidiary.

Before his 1994 departure from the top job at Goldman Sachs, he led the firm through a period of rapid growth.

"With their superb background and reputation, they will make a tremendous contribution to our continued success in building an investment business,'' Jeffrey Greenberg, 46, chairman of the six-year-old Marsh & McLennan Risk Capital, said through a spokeswoman. Greenberg is the son of Maurice Greenberg, chairman and chief executive of American International Group Inc.

Marsh & McLennan Risk Capital is a private equity manager that invests for three groups. One is Trident Partnership LP, whose $667 million of committed capital makes it the largest insurance-only equity fund.

The Greenwich, Connecticut-based company also invests for Risk Capital Holdings Inc. and its subsidiary Risk Capital Reinsurance Co., which Marsh & McLennan Risk Capital formed in 1995 with an initial public offering and private placement.

Marsh McLennan Risk Capital was a major investor in several Bermuda-based insurance companies formed in the mid-1990s to take advantage of its favourable tax laws and regulatory system. These companies include ACE Ltd., EXEL Ltd., Centre Reinsurance and Mid Ocean Ltd., which is becoming a wholly owned subsidiary of EXEL.