Mid-market still active, 3i says

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Date: Wednesday 09 Jul 2008

LONDON (ShareCast) - Private equity firm 3i said the mid-market remained healthy in the second quarter of 2008, providing both investment opportunities and chances to realise investments.

In the three months to the end of June the company invested £428m, down from £591m in the corresponding quarter of 2007, though investment on behalf of funds managed or advised by 3i more than compensated for the shortfall, rising to £347m from £111m a year ago.

Realisation proceeds, excluding funds managed or advised by 3i, more than halved to £301m from £605m a year earlier.

However, realisations were achieved at aggregate uplifts of 26% over end-March 2008 carrying values.

The quoted portfolio generated a positive return of £79m during the period.

During the period the company issued £430m of new convertible binds to refinance the existing €550m convertible bond due 25 July 2008.

At present the group expects investment and realisations will be roughly in balance in the current financial year, with net debt at 31 March 2009 projected to be at similar levels to that seen at 31 March 2008.

"We remain highly selective with respect to new investment, and continue to monitor closely the financial performance of our portfolio," said Philip Yea, 3i's chief executive. "This approach, combined with the diversity of our business in terms of asset class, geography and sector put us in a good position to deal with what continues to be an uncertain economic environment," Yea added.

Chairman Baroness Hogg said at the AGM: "3i achieved substantial growth in net asset value, and successfully continued its strategy of raising external funds to accelerate growth in assets under management."

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