Philip Yea, group chief executive of UK private equity giant 3i, has stepped down as the firm revealed its top 50 investments had lost £682m (21%) of their value in its third quarter.
Yea had been in the position since July 2004 after joining from Investcorp, and will be replaced by Michael Queen, the managing partner of 3i’s infrastructure business. Queen has been at the firm since 1987, and has been a 3i board member since 1997.
The shake-up was announced following an interim management statement by the firm which revealed its plight.
It revealed it had carried out a valuation exercise of its largest investments as of December 31 in light of what it called “extreme volatility in the markets”. These investments accounted for approximately 61% of the £5,934m portfolio total, and include a number of 3i’s own funds, like 3i Infrastructure and 3i Quoted Private Equity, as well as well as companies like UK water provider Anglian Water Group and Dutch recruitment classified advertising business VNU Media.
Assets based on an earnings basis fell £214m in value between September 30 and the end of the year. A further £147m was wiped off from assets that were moved from a cost-based valuation, and 3i’s quoted portfolio lost £168m. Together with various other loses, like loan values, this meant a total asset fall of £682m.
Investment in the quarter was £173m bringing the total for the last nine months to £841m, significantly down on the £1.8bn invested in the same period in 2007. Realisations were down to £942m from £1.5bn.