Hellman & Friedman, a San Francisco-based buy-out firm, has teamed up with a hedge fund to buy the US car insurance arm of Zurich Financial Services for $1.1bn (€1.41bn).

The alliance between the alternative asset firms comes just a year after Hellman & Friedman was part of a consortium led by Henry Kravis, which criticised the interest of short-term hedge funds because they lacked the skills to manage a business.