First Europe, now the U.S. 

3i Group said today it has formed a joint venture with WCAS Fraser Sullivan Investment Management to establish a U.S. debt management business.

The deal follows an agreement in May to acquire the management of a group of European collateralized debt obligations from another U.S. money manager, Invesco.

Together, the two deals boost assets managed by 3i’s debt arm to approximately $10.2 billion. When the transactions are completed, 3i will manage or advise 25 funds, including 19 CLOs.

 “This strategic transaction demonstrates our stated commitment to grow 3i’s debt management business and third-party income over time,” said 3i chief executive Simon Borrows. “The U.S. is a highly attractive credit market given its size and liquidity and we are pleased to be partnering with such a strong and established team to access this market.”

The CEO said the firm expects to further grow its debt management business, both organically and through acquisitions.

3i Group will initially own 80% of the U.S. venture, dubbed 3i Debt Management U.S., and Fraser Sullivan’s senior executives will initially own the remaining 20%, with 3i taking full control within three years.

Going forward, all new U.S. debt management business for both 3i and Fraser Sullivan will be implemented through 3i’s debt arm. However, the  joint venture will not result in any changes to the management of the six CLOs managed by Fraser Sullivan and its affiliate, FS COA Management LLC

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