3i debt arm sale worth £270m

Investcorp has completed the acquisition of 3i Debt Management, the former debt investment unit of 3i.

3i Group has announced that its sale of 3i Debt Management to Bahrain-based Investcorp has completed.

The deal, which was agreed towards the end of October last year, results in total cash proceeds to 3i of £270 million (€314 million; $330 million).

This includes £34 million from the repayment of loans provided to 3i Debt Management to fund two CLO warehouses, and an exceptional profit on disposal of £47 million.

At the time of the deal’s announcement, the 3i Debt Management team insisted it would be “business as usual” with Jeremy Ghose remaining as chief executive officer and John Fraser heading up the US team. The name of the firm changes to Investcorp Credit Management.

The unit, which has around 50 people in total, will sit as a separate business line alongside Investcorp’s three existing “pillars” of private equity, real estate and hedge funds.

Last year, Investcorp embarked on a plan to grow its AUM from $11 billion to $25 billion over the next five years. The 3i Debt Management deal sees its AUM grow to around $23 billion, executive chairman Mohammed Al Ardhi told PEI.

3i Debt Management operated from offices in the US, UK and Singapore and had funds under management of circa $12 billion. In September, just before the Investcorp announcement, the firm closed its latest CLO vehicle, Harvest XVI, on €452 million.