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3i Group: A Major UK Private Equity Powerhouse

3i Group is a prominent British multinational private equity firm based in London, England.

Specialising in providing investment support to entrepreneurs and management teams of mid-market businesses in Europe and North America, the company has established itself as a driving force for international growth.

With its strategic approach to origination and portfolio construction, 3i Group emphasises the integration of sustainability factors in its investment process.

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As a private equity powerhouse, 3i Group manages an impressive £16.4bn proprietary capital value, with a total of £22.9bn in private equity assets under management.

Throughout its history, the firm has demonstrated a commitment to equal opportunities, diversity, and inclusion, valuing gender, ethnic and social diversity in its operations.

With its vast network, experience, and resources, 3i Group continues to create value not only for its investors but also for the businesses in its portfolio.

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Sectors And Approach

3i adopts a confident and knowledgeable approach when investing in diverse sectors.

Their focus spans four core areas: Consumer, Healthcare, Technology, and Industrial.

With a clear understanding of each sector’s nuances, 3i Group integrates sustainability factors into their investment process, which is essential in the current business landscape.

The Consumer sector includes companies that cater to specific customer needs, such as products or services, playing a crucial role in driving their growth.

3i Group leverages its international network and expertise to assist the expansion of these companies in diverse markets. Meanwhile, in the Healthcare sector, they work with organisations developing advanced solutions in medicine, diagnostics, and patient care.

Technology is another area where 3i Group exhibits stellar performance.

They identify companies with cutting-edge technologies and innovative solutions, helping businesses elevate their position in the market.

At the same time, the Industrial sector offers 3i Group the chance to work with manufacturers and suppliers who play a vital role in the economic growth. Their involvement helps to improve operations and foster sustainable practices.

In addition to these core sectors, 3i Group’s Infrastructure team explores investment opportunities across adjacent segments like utilities, transportation, communications, and energy.

3i Group’s value-driven approach enables them to engage proactively with their portfolio, ensuring they select high-potential ventures.

Investments And Opportunities

3i has a solid track record of investing in various sectors such as consumer, industrial, and business services.

They primarily focus on mid-market companies in Europe and North America with an enterprise value between €100m – €500m and their typical investment holding period ranges from 3 to 5 years, providing a well-balanced blend of stability and flexibility for the investor.

The firm’s investment strategy emphasizes on companies with international growth potential, ensuring that the businesses they support can expand and thrive globally.

A notable example of their partnership is with WilsonHCG, where they have helped deepen its global presence and accelerate strategic growth initiatives.

3i Group Recent Investments: Key Highlights and Outcomes

3i has been actively expanding its portfolio in recent years.

The company focuses on private equity, infrastructure and debt management across multiple industries. With its strategic investments, 3i Group aims to generate sustainable returns for its shareholders and support the growth of its portfolio companies.

In the past year, 3i Group has made several notable investments, demonstrating its commitment to supporting businesses with strong growth potential. For instance, on December 29, 2022, the company invested $50,000 in Blue Trail Group. This recent activity is just one example of 3i Group’s successful track record, having made a total of 468 investments so far.

The company’s diverse investment portfolio showcases its keen eye for supporting businesses with innovative solutions and exceptional growth prospects.

As we delve deeper into 3i Group’s recent investments, we will examine the factors that drive the success of their investment strategy and how they identify promising companies to support.

3i Group Plc Recent Investments

Over the years, the firm has made a plethora of investments, contributing to their continuous growth and diversification.

One of the recent investments made by the 3i Group includes the establishment of a UK and Ireland platform within the 3i-backed European Bakery Group.

This was achieved through Panelto Foods on 29 June 2023. Shortly before this investment, in May 2023, the Group accomplished another significant deal by merging Dutch Bakery with coolback, creating the 3i-backed European Bakery Group.

These investments highlight the company’s keen interest in expanding both its resources and portfolio in the competitive food industry.

Another noteworthy investment by 3i Group Plc entails the acquisition of MPM, a Manchester-based premium pet food company.

The transaction showcases the company’s commitment to exploring new markets and industries. MPM offers a range of high-quality pet food, paving the way for further growth and development in the pet care sector.

Overall, 3i Group consistently demonstrates its expertise in identifying and partnering with promising businesses across diverse sectors.

By efficiently allocating resources and providing strategic guidance to its portfolio companies, the firm contributes to their long-term success and ability to make a meaningful impact in their respective industries.

The group’s recent investments in the food and pet care sectors serve as prime examples of its unwavering dedication to facilitating growth and expansion.

Expansion and Growth Strategy

3i has been focusing on a strategic approach to expanding its investment portfolio.

The firm’s growth strategy is centred around identifying opportunities in various sectors, such as logistics, infrastructure, real assets, industrial, consumer, healthcare, private equity, machinery, and distribution sectors across Europe and North America 1.

With a keen emphasis on developing a diversified portfolio, the 3i Group utilizes a thematic approach to origination and portfolio construction.

This involves tapping into promising sectors and businesses that have the potential to yield significant returns.

For instance, the company has invested in Action, a Netherlands-based non-food discounter that has demonstrated strong sales growth of 22% in the year-to-date like-for-like sales 2.

3i has also been focusing on investing in innovative companies that possess a strong market presence and growth potential.

One such example is Formel D, a leading global service provider to the automotive and component supply industry.

Formel D offers quality assurance and process optimisation services along the entire value chain – from development to production through to aftersales 3.

Another recent addition to 3i Group’s investment portfolio is Wilson Human Capital Group, Inc. (WilsonHCG). This strategic growth investment aims to further enhance WilsonHCG’s expansion capabilities and maintain its position as a global leader in talent management solutions 4.

By adopting a focused and disciplined approach to identifying investment options, 3i Group has successfully broadened its business line and demonstrated impressive growth potential. This well-rounded strategy not only caters to the firm’s current market position but also helps mitigate risks associated with market changes, ensuring continued success.

Footnotes

  1. https://pitchbook.com/profiles/investor/11215-09
  2. https://www.marketscreener.com/quote/stock/3I-GROUP-PLC-4007143/news/3i-Group-hails-strong-sales-growth-in-investment-Action-44229146/
  3. https://www.3i.com/portfolio/?page=2
  4. https://www.businesswire.com/news/home/20210325005414/en/WilsonHCG%C2%A0Announces-Completion-of%C2%A0Strategic-Growth%C2%A0Investment-From-3i%C2%A0Group%C2%A0

Investments in Infrastructure

Economic Infrastructure

3i Group has made significant investments in various economic infrastructure projects to drive value. Their investment portfolio includes projects in sectors like transportation and utilities.

An example of their involvement in transportation is their investment in TCR, a leading European provider of ground support equipment services. This diversified portfolio allows the company to capitalise on opportunities in both greenfield and operational projects while managing risk.

Social Infrastructure

3i Group also plays an active role in social infrastructure investments.

These investments typically focus on the provision of essential services such as education, healthcare, and housing.

By investing in high-quality social infrastructure assets, 3i Group aims to offer long-term, stable returns to investors and support the growth of the communities in which they operate.

Renewable Energy and Digitalisation

The renewable energy sector is another area where 3i Group has demonstrated a strong commitment.

For instance, they have partnered with Attero, a progressive waste recycling and energy recovery company based in the Netherlands.

Likewise, their investment in ESVAGT, a provider of emergency response and rescue services for offshore wind farms, highlights their interest in the clean energy sector.

Their ESVAGT investment demonstrates their dedication to promoting sustainable practices by investing in companies that support the renewable energy industry.

In addition to renewable energy, 3i Group recognises the increasing importance of digitalisation. They have focused their investments on businesses that create value through technological advancements, including those in the communications and network sectors.

Communication and Network Investments

As the world becomes more connected, the need for reliable communication networks has grown. 3i Group has been actively involved in this industry, investing in companies that contribute to the development of networks and communication technologies.

By taking a strategic approach to their investments in digital infrastructure, 3i Group is well-positioned to capitalise on the ongoing global demand for improved connectivity and modern networks in the digital era.

Investments in Consumer Healthcare and Industrial Technology

3i Group, a leading international investment firm, has been making significant strides in expanding its portfolio within consumer healthcare and industrial technology sectors

With their broad market expertise and focus on key growth drivers, 3i Group has been able to identify lucrative investment opportunities in these areas.

In the healthcare sector, fundamental growth drivers include an ageing and more active population, greater access to healthcare globally, and advancements in areas such as biologics, minimally invasive medical devices, and personalised medicine.

One noteworthy example from their portfolio is Havea, which focuses on natural healthcare products and supports the increasing trend of patient-centric healthcare decisions.

3i Group has also recognised the potential for growth within the consumer healthcare space. Combining aspects of consumer goods and healthcare, this market includes products and services that promote wellness and improve the overall health of consumers.

The burgeoning demand in this industry stems from an increasing focus on fitness, nutrition, and self-care, along with greater access to wellness products and services.

When it comes to industrial technology, 3i Group has targeted key investment areas such as automation, digital transformation, and energy efficiency.

These sectors often display strong potential for innovation and productivity improvements, making them attractive opportunities for investors.

In their 2020 Annual report, 3i Group highlights a diverse portfolio of 31 unquoted assets and one quoted stake, ranging across technology services, consumer, healthcare, and industrial segments.

Being a well-versed investor in the aforementioned sectors, 3i Group has made a total of 468 investments, with their most recent investment in Blue Trail Group, which raised $50k on December 29, 2022.

As they continue to pursue strategic investments in consumer healthcare and industrial technology, 3i Group aims to generate capital returns and income yield for its stakeholders.

Investment Performance and Returns

3i Group has demonstrated a strong track record of investment performance in recent times. As of the end of December 2022, their results showed a significant increase in NAV per share, rising to 1,649 pence from 1,477 pence in September 2022.

This corresponds to a total return of 26.8% for the nine months leading up to 31 December 2022.

Their financial year 2023 results reveal an upward trajectory, continuing the [positive performance](https://www.3i.com/investor-relations(results-centre/) of previous years.

Total return on equity reached 36% in 2022, compared to 44% in the prior year. Dividend per share also increased by a notable margin, standing at 53.0 pence in 2022, up from 46.5 pence in the previous year.

In terms of specific investment areas, 3i Group has been keen on focusing on generating high-quality cash-to-cash returns. These returns essentially highlight the company’s ability to generate value for shareholders by converting investments into positive cash flows and profits.

Operating cash profit is a key component of 3i Group’s successful performance, playing a crucial role in the overall value generation process. By consistently generating operating cash profits, they have been able to reinvest in growth areas, expand their portfolio and deliver strong results to investors.

In summary, 3i Group’s recent investment performance has been marked by notable achievements in several crucial areas, such as earnings, cash-to-cash returns, operating cash profit, and total return. The results reflect a confident, knowledgeable, and focused approach to delivering value and sustainable growth for their stakeholders.

Financial Health and Stability

The 3i Group has exhibited financial stability in its recent performance, showcasing a strong balance sheet. In the year ending 31 March 2023, the group reported a total return of £4,585m, reflecting a growth compared to £4,014m in the previous year source.

This financial progress is supported by their prudent operating expenses at £(138)m, slightly increasing from £(128)m in 2022.

Net sales for the group have seen a positive trend, contributing to their financial health. Their realised proceeds reached £857m in 2023, which is higher compared to £788m in the year to 31 March 2022 source. Earnings for the year, represented by the operating cash profit, amounted to £364m in 2023, witnessing an increase from the £340m recorded in the previous year.

3i Group’s investments in sectors such as healthcare, infrastructure and value-for-money private labels have showcased resilience, making up 83% of the investment portfolio in December 2022.

However, the group faces headwinds in their discretionary consumer portfolio companies source.

Debt investors can find reassurance in 3i Group’s stable performance, while the share price information is readily available at the Financial Times.

The gross investment return reached £5,104m in 2023, representing 36% of the opening 3i portfolio value, although it fell slightly from the 43% reported in the previous year source.

In conclusion, 3i Group has portrayed a sense of financial health and stability, supported by a strong balance sheet, steady earnings growth, and well-performing investments in sectors like healthcare and infrastructure.

Despite slight headwinds in some areas, the company’s overall performance remains solid and exhibits confidence in the 3i Group’s future trajectory.

Shareholder Relationship and Dividends

The 3i Group places great importance on maintaining a strong relationship with its shareholders. The company’s Investor Relations department ensures transparent communication and provides easy access to relevant information for existing and potential investors.

One of the key aspects of shareholder relations in the 3i Group is the handling of dividends.

The company has a history of consistent dividend payments, typically making two disbursements every year; the first is usually paid in January, while the second comes in July. T

o view their dividend history for the past 10 years, consult their dividends table.

The Shareholder Centre serves as a hub for important investor information such as annual general meeting (AGM) details, dividend information, and contact information for the company’s Registrar. Investors can manage their shareholdings online to streamline their investment activities.

3i Group’s commitment to shareholder satisfaction is also reflected in their efficient shareholder distributions.

The company ensures that dividend payments are made promptly, allowing investors to receive the benefits of their investment in a timely manner.

In summary, the 3i Group demonstrates strong dedication towards nurturing a positive shareholder relationship by providing valuable resources for managing investments and ensuring consistent returns through dividends.

This approach further solidifies the company’s position as a reliable option for those seeking financial growth in the investment market.

Key Performance Indicators and Governance

The 3i Group focuses on various key performance indicators (KPIs) to evaluate their progress towards achieving their strategic objectives.

These KPIs consist of both financial and non-financial measures, which are essential for assessing the company’s performance comprehensively. Some of the financial KPIs include net asset value (NAV) per share, return on equity, and total shareholder return.

In terms of governance, the 3i Group extensively believes in transparency and effective management.

Within the company, the responsibilities of the Chief Executive involve maintaining direct oversight of the group’s daily operations and being accountable to the Board for both financial and operational performance.

Furthermore, the Chief Executive chairs the Investment Committee, responsible for evaluating and deciding on the acquisition, management, and disposal of investments.

Sustainability plays a significant role in the 3i Group’s investment strategy and approach to governance. They are committed to incorporating environmental, social, and governance (ESG) factors into their investment decisions.

Their responsible investment policy emphasises a thematic approach to origination and portfolio construction while engaging proactively with their portfolio companies to ensure sustainable practices.

In addition, the 3i Group recognises the importance of diversity, inclusion, and equal opportunities within the organisation.

This approach helps in contributing positively to the company’s governance structure and ensuring the organisation’s continued success.

Growth Opportunities

3i Group identifies significant value creation opportunities by concentrating on businesses that exhibit strong growth potential and align with prevalent market trends.

Their proactive approach to origination and portfolio construction allows them to spot promising investment opportunities in various sectors and regions.

One of their key focus areas is sustainability, where the need to decarbonise and society’s expectations for a circular economy drive new investment opportunities in private equity and infrastructure.

By acknowledging these market shifts, 3i Group is well-positioned to capitalize on long-term secular trends and deliver value to their investors.

Furthermore, the firm plays a substantial role in the internationalisation of their portfolio companies by leveraging their expertise, strong balance sheet, and extensive network.

For instance, 3i has been instrumental in the growth of Smarte Carte and its international expansion plans.

Overall, 3i Group’s investment experience, strategic approach, and commitment to sustainability enable them to uncover lucrative growth opportunities and create value for their investors in the dynamic private equity landscape.

Geographical Reach

Europe

3i Group has long established a strong presence in Europe.

In the Benelux region, 3i focuses on mid-market investments in companies with strong growth potential.

Germany is another key market for 3i, where they invest in businesses with market-leading positions and France also plays an important role in 3i’s European strategy, targeting companies with a global outlook and strong regional presence.

North America

In addition to their European operations, 3i Group has also extended its geographical reach to North America.

The firm primarily invests in mid-market companies headquartered in this region, seeking opportunities for growth and expansion.

By leveraging their global expertise and resources, 3i aims to deliver value for investors and support the development of businesses in both Europe and North America.

History and Evolution

The 3i Group has a rich history, starting with its creation in 1945 as a private equity firm and evolving into a leading international investment manager focusing on private equity and infrastructure. The firm’s beginnings demonstrate its founders’ confidence, experience, and vision of enabling growth in Great Britain’s economy in the post-war era.

With an initial capital of £15m, 3i commenced its journey, making its mark in the UK business sector. Over the years, the group expanded and diversified its investments, eventually leading to the creation of a public limited company in 1987 when banks sold their stakes. This milestone marked a new phase in the group’s evolution.

The 3i Group continued to gain momentum and in 1994, it was floated on the London Stock Exchange, with a market capitalisation of £1.5 billion. This cemented the company’s position as a force to be reckoned with in the industry.

The 3i Group’s commitment to mid-market buyouts, growth capital, and infrastructure investments has driven its success over the years.

With a proven track record of working closely with management to develop successful strategies for businesses and achieve strong growth, 3i has established itself as an experienced and knowledgeable investor in more than 100 countries worldwide.

Along the way, the 3i Group has witnessed milestones such as the appointment of David Hutchison as Chairman in 2021 and the liquidity event for investors in Eurofund V in 2019. Notably, in 2018, the group closed the 3i European Operational Projects Fund on €456m, demonstrating its continuous development and commitment to its investors.

Overall, the 3i Group’s history and evolution reflect its ethos to create long-term value for its shareholders while contributing to the growth of the businesses it invests in. As a confident, knowledgeable, and clear leader in private equity and infrastructure investing, the 3i Group stands as a noteworthy entity in its industry.

Leadership And Governance

Board Of Directors

The Board of Directors at 3i Group plc plays a crucial role in setting the strategy for the company and providing guidance to the management team. Composed of a mix of executive and non-executive directors, the board ensures a balance of skills and experience, making certain that the interests of shareholders are well represented. Board members come from various industries and possess extensive expertise in areas such as finance, investment, and corporate governance.

Executive Committee

The Executive Committee is responsible for the day-to-day management and execution of the firm’s strategy. The committee comprises the CEO, CFO, and other senior leaders from the company’s private equity and infrastructure divisions.

They work closely together to optimise the performance of the business and enhance value for investors. The diverse backgrounds and skills of the executive committee members ensure effective collaboration and efficient decision-making.

Principal Board Committees

3i Group’s governance framework includes several Principal Board Committees, which oversee various aspects of the business. These committees include:

  • Audit and Compliance Committee: This committee ensures that the company’s financial statements are accurate, and that appropriate systems are in place to safeguard the integrity of its financial reporting, internal controls, and regulatory compliance.
  • Nominations Committee: This committee is responsible for reviewing the Board composition and making recommendations on the appointment of new directors. It also plays a vital role in ensuring that succession planning is robust and effective.
  • Remuneration Committee: This committee determines the remuneration policy for directors and senior management. Its main objective is to attract, retain, and reward talented individuals who will enhance the company’s performance and deliver value to shareholders.

3i Group’s strong leadership and governance structure helps ensure a transparent, accountable, and ethical approach to conducting business, ultimately contributing to the long-term success of the company.

Share Price Information

The share price information` can be found on the 3i Group’s Investor Relations website.

This resource provides current and historical data about the company’s share price, as well as relevant market data and trends. Shareholders can use this information to stay updated on their investments and make informed decisions.

Investors and shareholders can also find information about dividends, AGM, and B-shares to gain a better understanding of the company’s financial health and distribution policies.

Results Centre

The results centre` on the 3i Group’s Investor Relations website offers comprehensive data about the company’s financial performance over time, including annual reports, interim results, and other important disclosures.

The results centre is constantly updated to reflect the latest financial information, ensuring that shareholders have access to accurate and up-to-date data.

In addition to financial reports, the results centre also provides information on the company’s investment strategy, which entails a focus on private equity and infrastructure assets.

3 is dedicated to driving sustainable growth in its investee companies through disciplined investment, thoughtful origination, and active management.

his approach allows the company to generate significant returns for its shareholders while maintaining a long-term, responsible investment outlook.

Corporate Social Resilience

Covid-19 Charitable Fund

In response to the COVID-19 pandemic, 3i Group established a £5 million Covid-19 charitable fund in May 2020. This fund demonstrates the firm’s commitment to supporting communities during challenging times. The charitable fund was utilised to provide financial aid to various organisations working towards addressing the impacts of the pandemic.

Sustainability Initiatives

3i Group recognises the importance of sustainability in their operations and investment processes. They have integrated sustainability factors in their investment process by implementing a responsible investment policy and adopting a thematic approach to origination and portfolio construction. This approach enables them to proactively engage with their portfolio to drive change towards environmental and social objectives.

Moreover, 3i Group places significant emphasis on equal opportunities, diversity, and inclusion. By promoting gender, ethnic, and social diversity throughout their business, the firm demonstrates a commitment to creating a more inclusive and socially resilient corporate environment. With a focus on responsible investment and promoting diversity, 3i Group actively contributes to addressing the pressing sustainability challenges in today’s world.

Corporate Citizenship And Equal Opportunities

3i is committed to promoting corporate citizenship and equal opportunities. The firm works to integrate sustainable investments into their private equity strategy, focusing on social responsibility, equal opportunities, diversity, and inclusion.

One noteworthy example of their commitment to corporate citizenship is their establishment of a £5 million Covid-19 charitable fund.

This fund was created to support various charitable initiatives during the pandemic and was primarily funded from private equity and infrastructure carry and performance fees provided in prior periods.

For further information we recommend you contact 3i’s Media Team via their Media Centre.

Futher Information via the 3i Media Centre

The 3i Group Private Equity firm maintains a comprehensive Media Centre which keeps interested parties updated on various aspects of the business including the latest news, portfolio updates, and messages from the Chief Executive.


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