Barclays Capital has thrown a $1.5 billion (£738 million) lifeline to a third, controversial, highly geared fund that ran into trouble because of the global liquidity squeeze.

Golden Key, which has $5 billion of assets under management, is a structured investment vehicle (SIV) that was designed by Barclays Capital and managed by the Geneva-based asset management group Avendis.

In a statement, Golden Key said it had been working with a “leading investment bank” to develop a restructuring proposal. A spokesman for Golden Key declined to name the bank but sources said it was BarCap.

The fund said it had told its security trustee that the discussions with the bank were “well advanced”.

It also said it had already held detailed discussions with a majority of its controlling creditors, although it declined to say who they were. Golden Key said further information would be available in the next few days.

Sources said the plan is to pay out all commercial paper investors at par through a liquidity facility underwritten by BarCap.

If the rescue goes ahead, BarCap will have to stump up a loan of just over $1.5 billion in the coming months as the short-term commercial paper issued by Golden Key comes due.

Golden Key was arranged as a so-called SIV-lite, a riskier form of investment vehicle which was designed to offer investors higher returns in benign credit markets.

Typically the SIVs raised money in the commercial paper market and used the funds to go out and make investments in long-term assets, such as mortgage-backed securities.

As the US sub-prime crisis began to take hold, however, the SIVs and SIV-lits started running into trouble. Many were forced to sell assets as they struggled to roll over finance in the commercial paper market.

Their problems were compounded when they were downgraded by ratings agencies who saw the value of their assets falling.

In a similar rescue last week, BarCap threw a $1 billion lifeline to another SIV-lite fund called Mainsail II, run by the hedge fund Solent.

The week before, BarCap stumped up $1.6 billion to rescue Cairn High Grade Funding I, another of its SIV-lite creations.

Problems at a further SIV-lite created by BarCap, Sachsen Funding I, led to the rescue of the German savings bank Sachsen LB last month. According to sources close to the matter, BarCap was no longer under any obligation to finance the restructuring.

At worst, BarCap estimates its losses from SIV-lites at £75 million.

Ed Cahill, the head of BarCap’s collateralised debt obligations division, which created the SIV-lites, resigned last month.

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