Private equity firm 3i Group is set to buy the European infrastructure fund management business of British bank Barclays, in a bid to raise fee income.

Barclays Infrastructure Funds Management Ltd (BIFM) has assets under management of GBP780 million (US$1.2 billion) and an investment team based in London and Paris.

The transaction is subject to an employee consultation process, 3i said in a statement without disclosing the offer price.

The private equity firm said the deal would help it to raise new funds and source new investment opportunities for its 3i Infrastructure business.

3i intends to leverage the Barclays infrastructure fund business to bring 3i Infrastructure incremental deal flow and to raise new funds.

The group said it is expected the asset management fees generated by Barclays’ arm will exceed the operating costs.

3i Group CEO Simon Burrows 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.”