through the purchase of common stock.

Capital Re will use the money to augment the surplus of its operating entities. ACE's stake in the company will be about 10 to 11 percent. ACE has agreed to keep its stake in Capital Re below 20 percent for two years.

Capital formed a joint reinsurance venture with ACE a year ago. Capital Re this week reported an operating loss of $6.3 million in the fourth quarter, compared to a profit of $17.5 million a year ago.