FTSE 100-listed 3i takes a step back from "pretty aggressive" UK private equity market

William Turvill
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3i sold its stake in troubled lingerie business Agent Provocateur earlier this year (Source: Getty)

FTSE 100-listed private equity firm 3i has been reducing its exposure to the UK in recent months due to “pretty aggressive” pricing in the market, its chief executive said today.

The firm sold lingerie business Agent Provocateur earlier this year and is seeking a buyer for retailer Hobbs. Recent investments have included Danish furniture brand BoConcept, French consumer healthcare business Ponroy Sante and German car parts maker Schlemmer.

The company today reported a total return of £1.6bn for the year to 31 March, up from £824m the year before.

Read more: 3i can see clearly now: Private equity firm buys majority stake in optician

Chief executive Simon Borrows told City A.M. its reduction in UK investments was not a “deliberate policy”. But he added that he does not see the company’s exposure to the UK growing in the coming years.

“It’s not a deliberate policy, it’s simply that a number of assets matured in the UK and it was the right time to sell them,” he said.

“And we have this string of offices across northern Europe and North America. And we’ve seen relatively more interesting opportunities there over the last few years than we have in the UK, where prices have been pretty aggressive and pretty competitive.”

He added: “I think there are a lot of private equity firms in the UK, there’s a lot of capital in the UK, and therefore the supply-demand thing is more challenging in terms of competition.”

Read more: Private equity firm 3i looks to offload retailer Hobbs

Asked if 3i would be increasing its proportion of UK investments in the coming years, he said: “I don’t see why it would change. I think it will continue to be a very important market for private equity, I think there’ll be many firms headquartered here still. So I don’t see it materially changing one way or the other.”

The private equity giant currently has six investments in the UK, including Rotherham-based pumps company Aesseal and Audley Travel. Borrows said his investments, in general, are well placed to deal with the fallout from last year’s Brexit vote.

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