Alleghany Corp., the insurer that bought Transatlantic Holdings Inc., acquired a stake in Ares Management LLC and agreed to invest as much as $1 billion in the asset manager to diversify its portfolio.

Alleghany paid $250 million for a 6.25 percent equity stake, the companies said today in a statement. The New York- based insurer will also commit capital to a range of “existing and new” strategies at Ares, according to the statement.

Insurers have been striking deals with asset managers in a push for fee income and new investment opportunities. Allied World Assurance Co. said in January that it took a stake in Crescent Capital Group LP in a bet on junk-rated debt.

“The Ares senior management team has built an impressive business and we believe the firm has excellent long-term prospects,” Alleghany Chief Executive Officer Weston Hicks said in the statement. “We believe our two organizations will be well-positioned to serve the converging reinsurance and capital markets.”

Ares got legal advice from Proskauer Rose LLP and its bankers were JPMorgan Chase & Co. and Bank of America Corp. Morgan Stanley was the banker for the insurer, which got legal advice from Willkie Farr & Gallagher LLP.

Ares had about $66 billion of committed capital and 700 employees as of July 1, according to the statement. It issued a $412.8 million collateralized loan obligation with Goldman Sachs Group Inc. in June and a 310.5 million euro ($411.9 million) CLO this month with Credit Suisse Group AG. CLOs pool high-yield, high-risk loans and slice them into securities of varying risk and return.

“We will be working with Ares to invest across their broad spectrum of products including both investment and non- investment grade securities,” Alleghany said in an e-mail. “We see this as an opportunity to access their expertise in these products to prudently enhance our returns. We will look to put this money to work over the next year.”

Today’s moves will boost Alleghany’s fixed-income returns and help Ares expand in insurance, Hicks said. Bill Mendel, an Ares spokesman at Mendel Communications, declined to comment.

With assistance from Kristen Haunss in New York. Editors: Dan Reichl, Dan Kraut