One of Cambridge’s oldest colleges has borrowed money for the first time in its 700-year history in a “sensational deal” devised to take advantage of the investment opportunities presented by the credit crunch.

Clare College says the intricate transaction “breaks new ground” because it is the first move of its kind by any college or charity in Britain or the US. It moves college investment beyond even the frontiers breached by top US institutions such as Yale, famous for their innovative investment strategies.