Slaughter and May is advising buy-out giant 3i on an unusual fundraising.

The magic circle firm is acting for 3i Group and 3i Quoted Private Equity, which are listing their 3i QPE fund on the London Stock Exchange (LSE).

The float, which is expected to raise at least £400m, is to generate funds to build a portfolio in small and mid-sized European companies.

Slaughters corporate partner Martin Hattrell is leading the team advising the buy-out house on the deal. He is being assisted by corporate partner Kathy Hughes and tax partner Graham Earles.

3i Group will contribute around 45% of the amount raised. Because 3i will retain a controlling stake in the company, under changes made by the UK Listing Authority last year, the listing will be considered a 'secondary' listing.

Freshfields Bruckhaus Deringer corporate partner Jonathan Baird is advising the underwriter, ABN Amro.

The float comes as a number of private equity houses – among them leading US houses Kohlberg Kravis Roberts & Co and Apollo Management – and hedge funds have moved to raise capital through publicly-traded vehicles.

Hattrell told Legal Week: "One attraction of these permanent capital deals is that the investment entity has a longer life. Many funds have a relatively short life and make investments on that basis."

3i operates a panel of preferred individual advisers in the UK, which includes Macfarlanes partner Charles Meek, Travers Smith corporate head Chris Hale and Clifford Chance private equity head James Baird.

However, Slaughters advises 3i on all corporate matters affecting the group, including advising it on the float of its infrastructure fund in March, raising £700m.