3i to boost fee income after Barclays fund deal

PRIVATE equity group 3i is to take over the European infrastructure fund management business of Barclays bank to boost its fee income from public-private partnerships and energy investment projects.

3i Group, which wants to become one of Europe’s biggest investors in infrastructure, said yesterday that it had made the bank an irrevocable offer for Barclays Infrastructure Funds Management, which runs assets of £780 million.

The company said the deal would complement its existing business at 3i infrastructure, help raise new funds and source new investment opportunities.

Simon Borrows, 3i’s 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.”

Since BIFM was launched in 1996, the business has invested £1.7 billion across six funds. It has teams in London and Paris.

The purchase price was not disclosed, but 3i said the annual asset management fees earned by BIFM were expected to cover its operating costs.

Cressida Hogg, 3i’s infrastructure managing partner, said: “We know the BIFM team well, having invested with them on successful deals, and look forward to working with them more closely.”