A London-based alternatives shop is looking bankroll private companies left in the lurch by banks with bad balance sheets. ARCH Financial Products this month launched the CF ARCH cru Finance Fund to capitalize on the opportunities in corporate private finance arising from the current credit crisis.

The fund, a joint venture with cru Investment Management, will focus on the private markets via a series of specialist investment companies that will invest in short- and medium-term private finance deals, including asset-based lending and senior-secured traded debt deals of between US$3 million to $10 million

ARCH, which manages US$2 billion, is fund’s investment manager while cru is responsible for retail distribution.

“The credit crunch has battered the balance sheets of major banks and there is a severe shortage of cash among existing lenders,” said Robin Farrell, CEO of ARCH. “A number of sound businesses are in danger of collapsing without immediate credit, and there is huge demand for finance from the private sector. This environment makes it the ideal time to be investing in private finance deals, with which we can capture superior yields through highly predictable ‘control investing.’”

The Financial Services Authority-regulated fund has a minimum investment requirement of £1,000 (US$1,499).