THE GLOOM surrounding private equity deepened yesterday when 3i said earnings at some of its portfolio firms had been hit while asset sales and new investments had slowed.
Britain’s oldest private equity firm said conditions had not improved since November, when it posted a slump in net asset value and chief executive Michael Queen chose to double the dividend after some public grumbling from shareholders.
Earlier this year the group wrote down to zero the value of one of its largest investments, outsourcing firm Enterprise, but yesterday 3i finance director Julia Wilson said it was working with all its portfolio companies on their decisions amid Eurozone turmoil. Realisations from investment companies sold slowed to £219m in the three months to the end of December, though that figure was largely down to the sale of engines maker MWM agreed a year earlier. The group had pulled in £532m from asset sales in the first half.
New investments were down, in line with much of the industry, as banks rein in lending for new deals. 3i invested £82m in the third quarter, compared with £448m for the first six months of the year.