LONDON, Feb 25 (Reuters) - British private equity group 3i said on Monday its U.S. debt management arm had raiseda $500 million fund to invest in corporate debt and loans toback private equity buyouts.
The collateralised loan obligation fund, Jamestown II, is 3iDebt Management U.S.'s second since it was established in Augustlast year as a joint venture with U.S. fund manager WCAS FraserSullivan Investment Management.
London-listed 3i was set up after World War Two to play arole in financing the reconstruction of Britain, but in recentyears private equity has produced lacklustre returns and it hasbeen shifting its focus to debt and infrastructure investment.
"Jamestown II is further evidence of the progress we aremaking to expand our Debt Management business and generatefurther income from third-party assets under management," 3iChief Executive Simon Borrows said in a statement.
3i said the fund, a refinancing of a $400 million FraserSullivan fund which had reached the end of its two-yearreinvestment period, was made up of $460 million of investmentgrade debt and $50 million of subordinated notes.
Due to transaction costs and the fact that some of thesewere issued at a discount to par, the fund will have totalassets under management of $500 million to focus on investing inU.S. corporate debt and senior secured loans backing privateequity buyouts in the United States.
Shares in 3i were up 0.6 percent at 310.5 pence by 0932 GMT.