3i ups investments as Asia exports boost portfolio

Private equity firm 3i offered signs of life from the buyout sector today, as it raised investment spending and reported "increased momentum" across the business.

3i spent £327 million on its portfolio in the six months to September, 72% up on a year earlier.

It said the value of its portfolio increased to 330p a share from 321p at the end March.

Chief executive Michael Queen added that "strong growth" from fast-growing Asian economies had boosted its portfolio performance, helped by exports to China and India.

Queen said: "We are seeing two ways of accessing emerging markets — one is investing there directly, but we are also seeing great growth in European manufacturing businesses and we are pushing them very hard to increase their exports or even build plants there. Right now more than 50% of our businesses are selling into emerging markets."

He also played down the departure of key deal-maker Jonathan Russell in September. "We have got more than 100 investment professionals at 3i. There is no star culture at the company," Queen said.

The group added French healthcare provider Vedici and calibration and measurement testing group Trescal in the period.

Fierce competition for assets from rival private equity firms and strategic buyers and high prices is also providing a better environment for firms such as 3i to sell companies.

It recently agreed the sale of German gas and diesel engine maker MWM to Caterpillar and is preparing German flexible joints maker Norma Group for a stock market listing.