Bloomberg News

3i Boosting Debt Business Hires Cantor Fitzgerald’s Tessier

November 15, 2012

3i Group Plc (III) is planning to more than double its debt-management unit and hired Melissa Tessier from Cantor Fitzgerald LP as Britain’s biggest publicly-traded private-equity firm moves away from investing in buyout deals.

Tessier will focus on investor relations in Europe and report to Andrew Bellis, a partner and managing director at 3i Debt Management, according to an e-mailed statement from the company. Tessier worked on European and U.S. structured credit products at Cantor Fitzgerald.

3i is seeking to more than double its debt business to $25 billion through expanding in the U.S., high-yield bonds and direct lending, Jeremy Ghose, chief executive officer of 3i Debt Management, said in an interview at his London office.

“We will be looking for acquisitions of credit management firms,” Ghose said. “One of the areas we will develop is high- yield bonds, which offers a natural complement to our loans business.”

3i announced plans in June to cut a third of its workforce, reshape its private equity business and focus on infrastructure and debt as new chief executive Simon Borrows came under pressure to revive profit and return money to investors.

The debt management unit boosted its assets to as much as $10.2 billion, it said in August, through a new venture with New York-based WCAS Fraser Sullivan Investment Management LLC. Last month it formed Jamestown CLO I Ltd., a U.S. collateralized loan obligation of $461.2 million.

Headcount Reduction

New private-equity investments have shrunk in a “subdued” market for mergers and acquisitions, 3i said today in an earnings statement. The firm spent 138 million pounds ($219 million) on new investments compared with 448 million pounds in the same period a year earlier, it said.

It reduced headcount by 104 employees and closed offices in Barcelona, Copenhagen, Hong Kong, Milan and Shanghai, according to the statement.

3i will avoid mezzanine financing, distressed debt and real estate, as well as asset-backed deals for the time being.

“I am not convinced there is room for growth for real mezzanine financing, ” Ghose said. “It will become more difficult to get buyout firms to see the merit of using mezzanine debt now that required returns almost match that of equity.”

3i fell 0.1 percent to 209.4 pence in London trading today.

To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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