Barclays sells iShares business

Exchange traded funds provider, Barclays Bank has agreed to sell its iShares asset management business to private equity firm CVC Capital Partners for ┬ú3 billion as it looks to raise cash and avoid turning to the government for aid. ┬á However, Barclays will still maintain links with iShares, and is providing ┬ú2.1 billion of financing for the deal - in effect a loan to CVC to help it buy iShares. ┬á "This transaction realises significant value for Barclays," said the bank's chief executive John Varley. "iShares has experienced rapid growth over the past several years and has reached a point where it can develop further on a stand alone basis." ┬á "Barclays shareholders will benefit from a reinforcement of our capital base and an ongoing commercial relationship with iShares," said Varley. ┬á The iShares business is the worldÔÇÖs biggest maker of Exchange Traded Funds (ETFs), and while the funds have proved very popular in the US, they have yet to really take off in the UK. ┬á ETFs are listed shares that pool investors' money and track the performance of particular indexesÔÇöa cheap way for private investors to gain access to many different shares through a single holding. ┬á While other High Street banks have accepted government money to help them through the credit crunch, Barclays has chosen instead to raise finance privately. Last year, the bank raised ┬ú7 billion from investors in the Middle East and reported profits before tax of ┬ú6.08 billion.