3i new investment drops 40 per cent

The UK-listed private equity firm has confirmed a reduction in its investment levels ahead of its interim results in November.

Global private equity investor 3i said it expects its interim results to show a reduction in investment levels, mirroring a drop in investment activity worldwide.

In a statement to the London Stock Exchange, the firm revealed Tuesday that it had made £340m of investments in the five months to August 31, a drop of over 40 per cent on the same period in 2001 when £600m was invested.

3i also published realisation figures for the period, which generated cash inflow of £587m across the portfolio. The biggest realisation was the sale of Go Fly to EasyJet, netting the firm £144m. 3i added that it expects the level of provisions against failing investments will be lower than the same period in 2001.

3i confirmed that it plans to hold a first close of its latest buyout fund before the end of the current financial year. It said that fundraising for the E3bn fund, which is targeting European mid-market management buyouts, was ‘progressing well’. The firm is hoping to raise up to E1.5bn from third-party investors.

Plans announced in May to issue £300m of perpetual preferred securities have been postponed until market conditions are more favourable.