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Report: 3i mulls move into debt investments

The UK-listed private equity frim is reportedly considering a move into investing in debt instruments. Other firms which have recently moved to take advantage of credit opportunities include Providence Equity Partners and BC Partners.

3i is reportedly considering a move into investing in distressed debt.

“There are some good buys in the debt market,” Bob Stefanowski, chairman and managing director of 3i North America, told Dow Jones.  He said that 3i is considering buying bargain senior debt on the secondary market from companies with good cash flow.

Stefanowski, who joined 3i six months ago, said that there were no concrete plans for debt investment and that it is more of a concept right now. He joined 3i from GE Corporate Finance Europe, where he was president and chief executive officer, so his experience lends itself to debt advisory.

3i does not have a distressed debt vehicle but it does have an €800m debt warehouse, which was formed in early 2008. Warehouse lending is a specialised type of lending that commercial banks and other finance institutions provide to companies involved in the mortgage banking business.

Other firms which have recently moved to take advantage of credit opportunities include Providence Equity Partners and BC Partners.

3i has recently made bids to reduce its £1.85 billion debt burden. Yesterday PEO reported that 3i is trying to raise £400 million by selling some of its European venture capital portfolio on the secondaries market, which follows last month's sale of a 10 percent stake in its infrastructure fund for £60 million as well as the estimated £110 million liquidation of its quoted private equity fund.