3i mulls RMB fund, second Indian infrastructure fund

The listed European firm is considering the launches as part of a two-year expansion plan following its recent restructuring.

3i, the London-listed private equity veteran, is “exploring the idea” of launching an RMB-denominated private equity fund, a spokeswoman for the firm told sister news site PEI Asia.

The firm is also considering setting up a second Indian infrastructure fund, she added, declining to add any further detail on either fund. 3i’s first Indian infrastructure fund closed on $1.2 billion in 2007, and was 42 percent deployed as of March this year, the spokeswoman said.

“Investors are looking for regionally focused funds to invest in,” Michael Queen, 3i’s chief executive, was quoted as saying in a recent report by the Financial Times. “They want to invest in China, in India and in Europe. So over the next 18 to 24 months we plan to raise a European private equity fund, a Chinese renminbi fund and a second Indian infrastructure fund.”

His statement came on the back of a strategic restructuring earlier this month to merge 3i’s buyout and growth capital divisions into one consolidated private equity business line. “This will mean that 3i has two distinct business lines, infrastructure and private equity,” the firm said in a statement at the time.

Jonathan Russell, who had run the firm’s buyout division for more than 10 years, left as part of the shake-up. The firm also mentioned as part of the restructuring that it was considering launching a debt investment business.

The announcement of the global restructuring followed news of the restructuring of the firm’s Southeast Asian businesses earlier this year. In June, the firm merged its Asian buyout team with its Southeast Asian growth capital team, both of which were based in Singapore. The firm did not replace its departing Asian buyout head, David Osborne, who joined Southeast Asia-focused private equity infrastructure fund manager CapAsia after 25 years at 3i.

“Growth capital is our predominant focus in Southeast Asia, India, China and it’s where we believe that we will see the largest investment opportunity over the coming years,” Mark Thornton, 3i partner and head of Southeast Asia, told PEI Asia at the time.

Fundraising in China might not be difficult for 3i as the firm already has a relationship with China Investment Corporation (CIC), China’s $300 billion sovereign wealth fund. In the €1.2 billion global growth capital fund the firm raised in March this year, CIC was reportedly the biggest third-party LP, according to the Financial Times.