Barings, one of the best-known names in UK finance, has started a new chapter in a US tie-up with fixed income affiliate Babson Capital Management to create a $260 billion fund manager.

The new firm, which will take the Barings name, will incorporate Baring Asset Management, Babson Capital Management and Babson's two US subsidiaries, Cornerstone Real Estate Advisers and Wood Creek Capital Management, to create a firm with 1,700 employees worldwide.