3i Group

Investcorp has agreed to purchase the debt management business of investment company 3i Group plc for $271 million. Following the deal close, the buyer will have a combined total of $23 billion in assets under management.

3i's debt management business, called 3iDM, manages funds primarily invested in senior secured corporate debt. The U.K.-based target brings $12 billion in assets under management to Investcorp. The existing management team with CEO Jeremy Ghose will remain in tact as part of the deal.

Investcorp co-CEO Rishi Kapoor says “we see this business as one of the central pillars of Investcorp's product platform going forward and are absolutely committed to continuing to grow the business on multiple fronts including fundraising, product development and capital support.”

Headquartered in Manama, Bahrain, Investcorp is a private equity firm with more than $10.8 billion in assets under management. The firm focuses on corporate investments, real estate investments and other alternative investments such as hedge funds. The 3iDM deal is the buyer’s largest acquisition to date and is expected to close in early 2017.

As private lending and debt market has become increasingly important as a finance source for the middle market, lenders have begun to focus on specialization to leverage their value proposition. Investcorp has made several strategic moves after announcing its plans for expansion in November 2015, including: the purchase of investment management company Ssaris Advisors LLC’s hedge fund division and the July 2016 announcement for Abu Dhabi-based Mubadala Development Co. to purchase a 20 percent stake in Investcorp. And in 2015, the buyer acquired helmet maker Poc Sweden. Investcorp sold SourceMedia Inc., the owner of Mergers & Acquisitions, to Observer Capital in 2014.

Gibson Dunn & Crutcher LLP is serving as legal counsel to Investcorp and the GreensLedge Group is acting as financial adviser.

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