BlueBay Asset Management LLP, a London-based fixed-income investment firm, will join with Ireland’s National Pensions Reserve Fund to create a fund offering loans to small and medium-sized companies in the country, according to two people with knowledge of the matter.
The fund will raise as much as 450 million euros ($588 million), according to one of the people, who asked not to be identified as the matter isn’t public. The fund may be announced as soon as today as Irish Finance Minister Michael Noonan lays out the 2013 budget.
The fund will be backed by 300 million euros of senior debt financing from investors including the Irish authorities, in addition to 150 million euros from BlueBay and the Irish pension fund, said one of the people.
The fund, looking to start senior secured lending by the end of the first quarter, will seek to deliver an annual return of 15 percent for equity investors, said one of the people. Officials at BlueBay declined to comment. Ray Gordon, a pension fund spokesman, wasn’t immediately able to comment.
BlueBay is owned by Toronto-based Royal Bank of Canada, the country’s biggest lender, which paid about 963 million pounds ($1.6 billion) for the firm in 2010 to expand its wealth-management business.