3i Group has made an irrevocable offer to Barclays Bank to acquire Barclays Infrastructure Funds Management (BIFM), its European infrastructure fund management business, in what would be a 'significant milestone' for the group.
BIFM has assets under management of approximately £780m and an investment team based in London and Paris. It currently manages two active unlisted funds that invest in UK and European PPP and energy projects, which 3i believes would complement its current European infrastructure product offering, which is focused on core infrastructure, investing through 3i Infrastructure. The acquisition would not affect 3i's existing advisory agreement with 3i Infrastructure.
Simon Borrows, 3i Chief Executive, said: "This strategic move is further evidence of our commitment to grow further and develop our Infrastructure business and to increase our income from third party assets under management.
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"In addition to the significant progress already made in growing our Debt Management business over the past 12 months, this acquisition would represent further progress towards the strategic objectives that we announced in June last year."
The group added that the transaction would demonstrate its commitment to growing its Infrastructure business and reaffirm its objective to increase third-party fee income by growing assets under management.
Looking ahead, it intends to leverage the BIFM platform to bring incremental deal flow to 3i Infrastructure and to raise new funds. The group expects that the asset management fees generated by BIFM will exceed the incremental operating costs.
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