3i secures £400m of exits in Q2

But the London-listed group did no new deals and remains 'cautious' on investment

3i enjoyed a strong second quarter for exits, booking £164 million ($278 million; €207 million) in proceeds – while also agreeing further realisations that will bring in an additional £245 million in the coming months, the London-listed private equity group said today.

In its interim management statement for the three-month period to June 30, chief executive Simon Borrows said 3i was seeing “good momentum across the Group and a growing number of exits at attractive valuations”.

However, 3i's private equity arm did no new deals during the period. In the statement, it said that the private equity mid-market “remains fully priced … This has provided us with the opportunity for good realisations, but continues to result in a cautious approach to new investment”.

Exits during the quarter included the initial public offering of Phibro, an animal health products business, and the sale of its stake in architecture business Foster + Partners. Coupled with refinancing activity in the rest of the portfolio, that generated total realisation proceeds of £164 million. Deals signed in the quarter but not yet completed included the sales of Hilite, a German car parts maker, and Vedici, a French hospital group.

3i did manage to invest £35 million in cash during the period, mostly via a £27 million purchase of a stake in its most recent fund, the €5 billion Eurofund V, from a third-party investor.

3i added that its existing portfolio was continuing to perform well, with value-weighted earnings growth of 17 percent over the last 12 months. However, that was marginally down on the equivalent figure of 19 percent at the end of the previous quarter.

This helped the group deliver an unaudited total return of £135 million, or 4 percent on opening shareholders’ funds, for the three-month period. Again, that was slightly below the equivalent figure for the same period last year of £146 million.

At 11.30am BST, 3i shares were trading at 388.10p. down 5.30p, given the company a market capitalisation of £3.77 billion.