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3i sells debt management, sticks to its knitting

Management says it wants to concentrate on managing its core private equity business and grow infrastructure investment
October 25, 2016

Private equity group 3i (III) has agreed to sell its debt management business to Gulf-based alternative investment company Investcorp, generating £222m in cash proceeds. Chief executive Simon Borrows plans to focus on managing 3i's private equity portfolio and growing infrastructure business.

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The debt management business has generated good cash returns since the strategic review carried out when Mr Borrows gained leadership of 3i in 2012. However, management says cash income from the debt management business is now less important, as the group has a leaner cost base and stronger balance sheet. The debt management business was formed following the purchase of Mizuho Investment Management in 2011, followed by the acquisition of WCAS Fraser Sullivan Investment Management and five collateralised loan obligation contracts from Invesco.