3i adds to debt division

The UK-listed firm has hired leveraged finance veteran Rob Reynolds to lead its credit-focused fund.

3i Group’s debt platform, 3i Debt Management, has recruited Rob Reynolds as head of its new credit opportunity fund.

Reynolds, who will report to the division’s managing director Andrew Golding, was previously head of investments at Resource Europe, a manager of collateralised loan obligations. He comes with a 25-year track record in leveraged finance, working across various European banks including Dresdner Kleinwort Benson and Commerzbank.

The fund will target investments in various types of credit such as loans, bonds and floating rate notes primarily based in Europe. No target has yet been set for the fund, which has received a seed commitment of £50 million (€57 million; $78 million) but investors will be sought at a later date, according to a person with knowledge of the matter.

3i declined comment.

3i Debt Management was created through the acquisition of Japanese bank Mizuho’s debt investing arm in a deal agreed last September. The acquisition added £3.7 billion (at the time worth €4.4 billion; $6 billion) in assets under management to 3i’s fledgling debt investment division, which now has £4.2 billion total assets.

Jeremy Ghose, the former chief executive officer of Mizuho Investment Management, was placed at the helm of the division. Soon afterwards the firm pulled a number of employees from its banking team, including Golding, to support Ghose.

3i plans to further acquire a US debt manager within the coming months, said Michael Queen, the firm’s chief, at a Dow Jones summit over the summer. “We see a real opportunity in the market for non-bank finance entities to basically provide credit.”

The UK’s biggest quoted private equity firm is cultivating its debt division at a time when a relegation from the FTSE 100 and a drop in the value of its assets battered its public image. In a recent earnings call Queen attributed volatile stock markets as the cause for a write-down in its portfolio expected to be announced early November.