Allied Irish Bank and Morgan Stanley have raised €446 million (£351 million) from institutional investors to invest in European corporate debt through a new fund. The Clare Island fund is structured to fund investments in a diversified portfolio of corporate debt. The fund will be actively managed by AIB Acquisition Finance.

The funds raised will be invested in a portfolio of European senior, mezzanine and subordinated debt, including leveraged buy-outs of industrial businesses.

Institutional investors were invited to diversify their investment portfolios into European corporate debt through the purchase of the securities, which are issued in several classes by the special purpose vehicle.