3i is paying £18.3m for Mizuho Investment Management (MIM), which was founded in 2005 by the Japanese bank to invest third-party money in senior and subordinated corporate debt, including collateralised loan and debt obligations (CLOs and CDOs).
Jeremy Ghose, chief executive of MIM and the first non-Japanese board member at Mizuho, is joining 3i with his 28-person team to become managing partner and head of the newly created 3i debt management business.
MIM operates a number of funds, including the Harvest and Windmill CLOs in Europe, a mezzanine loans fund and private equity fund of funds. Mr Queen said its ??provision rate and loss rate is significantly lower than the average?.
3i has already invested about £500m in debt of other private equity-owned companies with funds from its own balance sheet and loans from Lloyds Banking Group.
After suffering an unrealised loss of £112m in the year to March 2009, 3i??s debt business last year generated £50m of realised profits, a £45m jump in unrealised value, and £10m in fees and income.
Mr Queen said 3i planned to expand MIM by raising fresh debt funds and moving into new geographic markets, such as India. ??This is really the next step for our growth plans,? he said. ??We see great opportunities for growing this business.?
