3i Infra starts realising India fund

The London-listed firm’s European portfolio, which performed well over the last quarter, is to remain 75% focused on core infrastructure.

3i Infrastructure took the opportunity of an equity rally in the second quarter to start realising its embattled India fund, the London-listed fund manager said in an interim management statement yesterday.

Further to a 29 percent share value uplift over the three months to end June, the firm made its first exit through the sale of a 2 percent stake in Adani Power. This did not prevent the company from posting a loss on the asset, which it reportedly sold for about $60 million against an original investment of $125 million.

The company was able to distribute proceeds of £7.4 million (€9.3 million; $15.9 million) from its India fund in June, and, according to the statement, aims to divest the vehicle’s remaining assets over the next few years. 3i Infrastructure has already said it won’t make any further investment in India.

The interim report otherwise showed good results for the firm’s European assets, which the firm says are on track to deliver 3i’s target annual dividend of 5.5 percent. “The European portfolio continued to perform well operationally and financially and to generate good levels of income,” commented Peter Sedgwick, chairman of 3i Infrastructure.

The period saw the firm invest £4.6 million in a primary public-private partnership (PPP) project to build a new campus for Ayrshire College in Kilmarnock, Scotland. The project involves the design, build, finance, operation and maintenance of a new college campus against availability-based payments over a concession of 25 years.

“This investment is in line with the Company’s strategy of building its portfolio of primary PPP projects over time, where it can access attractive risk-adjusted returns and enhance the overall portfolio,” Sedgwick said.

3i Infrastructure bought the infrastructure unit of UK lender Barclays in May 2013, paying close to £780 million in an effort to bolster its PPP investment capabilities. Barclays Infrastructure Funds Management was one of the first players to step into the partnerships market, with a first fund raised in 1996 and about £1.7 billion invested since.

Notwithstanding this strategic move, however, Sedgwick said European core infrastructure would continue to represent at least 75 percent of the portfolio in the future.