3i sees ‘encouraging increase’ in deal numbers

The listed firm’s statement follows similarly upbeat reports from other listed private equity investors in Europe.

In line with other investors, 3i Group saw a steady increase in activity levels in the last quarter of 2010, according to an interim management statement issued Thursday.

The firm invested £183 million (€160 million; $216 million) between 1 September and 31 December, mostly through its buyout division, which accounted for £166 million. Growth capital and infrastructure accounted for just £2 million and £15 million respectively.

The investment total for the last nine months of the year was £510 million, representing a significant rise on the equivalent period during 2009, during which £249 million was invested.

“There was an encouraging increase in activity in our markets during the period as we made some high quality new investments and had significant realisations from the portfolio at good uplifts,” said Michael Queen, 3i’s chief executive.

The firm’s realisation pace remained steady throughout the year. It generated £105 million in the last quarter from exits, including £58 million of realisations of growth capital investments. Overall, the last nine months of 2010 was around 50 percent slower in terms of realisations than the equivalent period in 2009, however in that year the firm underwent a concentrated period of asset sales to improve its case position.

Further proceeds of around £305 million are expected from the forthcoming sales of MWM and Hyva; the two exits were agreed last quarter but have yet to complete.

3i’s statement follows similarly upbeat assessments from two listed European funds of funds. Euronext-listed Conversus Capital announced last week that, following a near two-year period without making a new fund commitment, it was now considering returning to investment mode.

Earlier in the January, HarbourVest Global Private Equity, which is listed on both the London Stock Exchange and Amsterdam’s Euronext, said it had experienced a dramatic return to activity in its portfolio, with December 2010 being its busiest ever month in terms of investment and realisations.