Investcorp has teamed up with Coller Capital to create a $1bn (£778m) European private equity buyout fund.
London-based Coller Capital will use its current fund, Coller International Partners VII, to underwrite the new investment vehicle which will invest in European mid-market companies.
The agreement is part of Investcorp’s growth strategy to reach $50bn of assets under management in the medium term.
The Bahrain-headquartered firm has been on a growth spree in recent years as it acquired $11bn AUM credit management business Investcorp Credit Management and made a strategic minority investment in Geneva private bank Banque Paris Bertrand last year.
Investcorp executive chairman Mohammed Alardhi said: “The signing of this landmark transaction in the secondary private equity market is the latest step in our global growth strategy.
“It demonstrates the continued desire by institutional investors to back Investcorp’s investment platform.
“We look forward, at closing, to welcoming Coller Capital to the distinguished list of global institutions who partner with us and to working with them in the coming years to maximise the value of the portfolio."
Coller Capital chief investment officer Jeremy Coller said: “This transaction springs from a relationship of many years standing.
“It is a complex investment, of strategic importance to Investcorp, and we’re delighted to be their chosen partner.”