3i debt management business expands to the US

3i acquired an 80% equity stake in the new venture, 3iDM US, the rest being held by a group of Fraser Sullivan partners. 3i expects to increase its stake to 100% in the next three years. The gross assets of the business are approximately $10.9m.

Under the terms of the agreement, all new US debt management business for both 3i and Fraser Sullivan will be implemented through 3iDM US. The six collateralised loan obligation (CLO) funds currently managed by Fraser Sullivan and its affiliate FS COA Management will still be managed by those two entities.

The deal follows on from 3i's purchase of seven CLO management contracts from investment manager Invesco in June. The latest transaction will increase 3iDM's assets under management to approximately $10.2bn on a pro forma basis. 3iDM will manage or advise 25 funds, comprising 19 CLO funds and six funds across private equity fund-of-funds, mezzanine, senior loans, managed accounts and credit opportunity funds.

The move illustrates 3i's strategy to diversify both its sources of income and geographical focus. The group is also ramping up its investment efforts in Latin America, according to reports: it plans to invest an average of $100m a year in Brazilian businesses, has just injected $55m in Brazilian cable and broadband provider Blue Interactive, and is understood to be analysing four other potential transactions in the country.

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