3i doubles up before tighter credit market

3i, a global private equity firm, has released figures for its pre-close period for the six months ending September 30 2007 showing investments to have more than doubled while realisations almost doubled compared with the equivalent period last year.

The London-listed finance house invested a total of £1.012bn (€1.45bn) in the five months ended August 31 2007, compared with £452m in the same period of 2006. A further £258m was invested on behalf of co-investment funds managed by 3i, up from £116m in 2006.

Realisations, excluding those from co-investment funds, stood at £1.011bn for the period, up significantly from £627m in the same period last year. Buyouts were responsible for more than half of that figure – at £539m, up from £298m last year – with growth capital second at £255m and venture capital totalling £110m, as well as £17m from QPE, 3i’s £400m Quoted Private Equity fund, which was floated in July of this year.

Investments, however, showed a shift away from a reliance on buyouts, with growth capital the most active investment segment at £445m compared with £339m of buyouts – a distinct difference from last year, when there were £251m of buyouts and just £106m of growth capital investments. QPE’s outlay totalled £182m in the current period.

Philip Yea, 3i’s chief executive, indicated how this shift might play out in the current credit markets, saying: “Whilst the dislocation in leveraged finance markets is expected to lead to a slowdown in new buyout transactions completed, our strategy of broadening the spread of our asset classes and geographies combined with our balance sheet resources, enables us to address the current period of adjustment from a position of strength.”

3i also announced the first close of the 3i India Infrastructure Fund, which has a target of US$1bn, with US$250m already committed by 3i and a further US$250m by 3i’s listed infrastructure fund.