JC Flowers, the buy-out firm behind the privatisation of Japan's Shinsei Bank and a bid for Refco, the scandal-hit US broker, is hoping to raise a $1bn (€840m) fund targeting banks and insurers.

The fund will be the second raised by the firm founded by Christopher Flowers, the former Goldman Sachs banker, Bloomberg reports. It will be one of only a handful of buy-out funds to focus exclusively on the financial services sector.