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3i closes growth fund on €1.2bn; open to new investments

3i closes growth fund on €1.2bn; open to new investments
  • Deborah Sterescu
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Further strengthening its position in the markets, 3i has just announced the final close of its Growth Capital Fund on т‚Ќ1.2bn, and has made it clear that the firm will continue to look for new investment opportunities.

The vehicle will continue 3i's existing growth capital strategy by making minority investments in businesses across Europe, Asia and North America. The fund will invest in approximately 20 mid-market companies, typically investing between €25m to €150m over the course of its life. 3i has committed a total of €800m to the fund.

As its first investment from the vehicle, 3i has just injected €84m in European fruit juice producer Refresco, based in the Benelux region, in exchange for a 20% stake.

3i CEO Michael Queen has been working to improve the firm's financial position and to cut it debt since last January when he took over from former chief executive Philip Yea.

In 3i's statement today that releases its financial results for the 11 months ending 28 February 2010, it was revealed that the group had cash, cash deposits and undrawn committed facilities of £2.35bn, further reducing net debt to £528m. This is a marked improvement from 14 months ago, as for the year ending 31 December 2008, 3i had cash, cash deposits and undrawn commitments of £839m and net debt of more than £2bn.

The statement today also showed that the firm invested a total of £311m compared with £898m in the equivalent period last year. Of this investment, £130m was cash invested in the existing portfolio.

Queen has worked to cut debt by selling assets, shutting down units (having sold most of its venture portfolio in September last year), and raising £700m from a rights issue last June. As a result of these moves, realisation proceeds totalled £998m for the year ending 28 February, compared to £1.1m a year earlier. These total realisations do not include Ambea and Apatech, which together will generate approximately £250m of further realisation proceeds.

"The improved financial position of the group means that we are well positioned to continue making new investments in a measured and disciplined way in the high quality opportunities that we are starting to see," said Queen in the statement.

3i shares have risen 77% in the past 12 months and are currently trading at 296.3 pence.

 

 

 

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