American Guggenheim Partners, the privately held financial institution linked to the philanthropic family, plans to establish a European leveraged finance operation in Dublin.

Guggenheim Partners, which last December sold a majority stake in subsidiary Guggenheim Alternative Asset Management to Bank of Ireland for about $184 million (€142.8 million), has applied to the Irish Financial Services Regulatory Authority for a licence.

Adrian Duffy, the Mayo man designated to run the operation, said the firm plans to establish a "sizeable fund" to participate in European leveraged buy-outs and other leveraged finance transactions.

"We are looking to raise a predominantly euro-denominated fund with capabilities in other denominations including sterling and the dollar," he said.

"We are talking to US investment banks about the right structure."

Guggenheim will look to have a "slightly different funding vehicle to a lot of other CLO [ credit loan obligation] managers", said Mr Duffy, who is currently a managing director in Guggenheim Partners' US leveraged finance division, which has $10 billion under management.

Guggenheim sees a growing opportunity in the "nascent" European leveraged finance market, which is now 40 per cent of the size of the US market and growing dramatically, Mr Duffy said.

Dublin was chosen as a base because Guggenheim was looking for a "pro-business regulator" and highly qualified people who will be "fairly sticky", he said.

"It has been difficult for US firms to find the right level of experienced people in London and to keep them."