3i Group Plc said it offered to buy Barclays Plc’s European infrastructure-fund business as the U.K.’s biggest publicly traded private-equity firm seeks to boost investments in the region’s physical assets.
Barclays Infrastructure Funds Management Ltd. has 780 million pounds ($1.2 billion) of assets under management, London-based 3i said in a statement today, without disclosing the offer price. The transaction is subject to an employee consultation process, it said.
“This strategic move is further evidence of our commitment to grow further and develop our infrastructure business and to increase our income from third-party assets under management,” Chief Executive Officer Simon Burrows said in the statement. The firm said it plans to “leverage” BIFM to raise new funds.
3i is seeking to boost its third-party fee income by increasing assets under management following a period of cost cutting and returning money to investors. For investors, infrastructure projects offer long-term stable returns that are typically protected by some form of government guarantee. The International Monetary Fund this week urged the U.K. to spend more money on infrastructure to boost growth.
BIFM raised its first fund in 1996 and was one of the first to invest in the public-private partnership infrastructure market, 3i said. The unit has invested 1.7 billion pounds across six funds to date, it said.
A Barclays spokesman declined to comment.