Capital Holdings, he said, "offers us substantial funds to manage."

The parent, formerly known as Capital Holding, specializes in selling insurance to low- and moderate-income customers.

But the company didn't really take off until Capital Holding hired Mr. Mehta, then a fast-track young executive vice president at the Cleveland Trust Company.

Today, Capital Holding has vanished from Mr. Kahn's resume.

The case was eventually settled, with Capital Holdings paying an undisclosed sum to Mr. Kahn.

The first fund of funds was started by the Rothschild family in Europe in 1969 under the name Leveraged Capital Holdings.

"The people who bought the portfolio David liquidated will make a lot of money," Mr. Tumbler of Capital Holding said.

Capital Holding, based here, will also start a tender offer at $11 a share for Southlife's almost two million shares of preferred stock.

Capital Holding said it would also assume $23 million of Durham debt.

"On the downside, there was weakness in 3M, Capital Holding, Kimberly-Clark and Avon," he said.