3i reports considerable investment opportunities

Despite considerable increase in investments during challenging period, returns were down for buyouts and growth capital 3i, has reported “considerable” investment opportunities exist despite the deterioration in the financial markets, which have impacted on realisations. In its pre-close period briefing for the year ending 31 March 2008, the 11 months to 29 February involved total investments of £2.15bn (€2.7bn) substantial increase on £1.348bn invested in the equivalent period last year. A further £600m was invested on behalf of co-investment funds managed by 3i, almost triple the £250m co-invested in the like period for 2007. Broken down into investment lines, £823m was invested in buyouts, nearly double the £431m total for buyouts in the period to 28 February 2007. As has been the case with 3i for some time now, growth capital took the lion’s share of capital, with £960m invested in this period, up from £447m for the 2008 period. Quoted private equity, carried out through 3i’s QPE fund which listed on the London Stock Exchange last year, has stepped up activity. The fund, which carries out private equity-style investments in public equities, was up from £14m last year to £182m for the current reporting period. Infrastructure, however, was significantly down, dropping from £284m last year to just £54m in this reporting period. Conversely, realisations for infrastructure and venture capital were better than in other business lines. £32m of exits were reported in the current period for infrastructure, compared to just £5m last year, while venture increased from £133m to £168m. Buyouts were slightly down, totalling £843m compared to £990m last year. Growth capital dropped from £609m to £432m. Having only launched last year, QPE had no previous exit figures, but reported £17m of gains for the 11 months to 29 February 2008. Total realisations proceeds, excluding co-investment funds, were £1.619bn, down from £1.935bn last year. “Our business as a whole continues to perform in line with our cross cycle return objectives,” said Philip Yea. “Although our portfolio companies are not immune to economic cycles, to date we have seen no material changes to their overall financial performance. The opportunities available to our investment business are considerable, notwithstanding the deterioration in the financial markets since the turn of the year.”

Partners Group, a Switzerland-based alternative asset manager, has expanded its Asian presence with the opening of an office in Sydney. Martin Scott, who in the past built a strong Australian presence for Zurich Financial Services, has joined Partners Group in the Sydney office. He will be joined by Mike Siebert, who has helped expand Partners Group’s Asian presence from its Singapore office since 2004.

SHS Gesellschaft für Beteiligungsmanagement has raised €40m from investors in Germany and across Europe. The fund is geared to financing young, innovative companies operating in the fields of life sciences and healthcare. Numbered among the investors are the European Investment Fund (EIF), through which the SHS fund has received support from the European Recovery Programme (ERP)-EIF Dachfonds and the Competitiveness and Innovation Framework Programme (CIP) set up by the European Union, Kreditanstalt für Wiederaufbau (KfW), a pension fund, and funds of funds. SHS intends to subscribe for a comparatively high 5% of the fund by first closing. Following a successful first closing, SHS expects to close its SHS III fund with a volume of €70m by the end of 2008.