NEW YORK (Reuters) ? Axis Capital Holdings Ltd. said a private equity fund that is one of its founding investors will sell 3 million shares.

Trident II, L.P. and related companies will sell the stake, or about two percent of Axis? outstanding shares, in a block trade to public investors, Axis said in a statement issued after markets closed on Tuesday.

Trident will receive all net proceeds from the sale, which would be valued at about $103.8 million based on Axis? Tuesday closing price of $34.60 on the New York Stock Exchange.

Axis shares fell 37 cents, or 1.1 percent, to $34.23 in morning trading yesterday.

Citigroup Corporate and Investment Banking will be the underwriter in the offering.

Stone Point Capital, formerly the private equity arm of insurance broker Marsh & McLennan Cos. Inc., manages the Trident Funds and has raised more than $3 billion for investments in insurance, employee benefits and financial services.

Trident was a lead investor in Axis when it was formed in 2001.

The private equity fund has been reducing its stake in Axis since 2005. Trident and its affiliates own about 15 percent of the Bermuda-based insurer, a source close to the company said, or 8.3 million common shares and 17 million Axis warrants.

Stone Point?s Trident funds and its predecessor companies have been investing in the Bermuda insurance market for more than two decades, having started by backing reinsurers Ace Limited and XL Capital.

In April, private equity investors led by Stone Point established Bermuda-based Paris Re to take over the reinsurance business of French insurer Axa.

In late 2005, the group led formation of Harbor Point, a $1.5 billion reinsurer formed to take over the reinsurance business of Chubb Corp.