US bank Bear Stearns has hooked up with Bank of Scotland Corporate, the investment banking arm of HBOS, to invest in eight junior debt funds worth €233m ($315.5m).

The innovative deal will create a joint venture vehicle, BoS Mezzanine Partners Fund, to hold the stakes in the eight third-party funds. These holdings are already owned by Bank of Scotland, which is one of the largest investors in private equity.