3i, a listed UK buyout firm, is setting its sights on the US mid-market after launching a new growth capital team in the US.
The firm has already installed a nine-strong team in New York, as it looks to build on the success of its US venture arm.
Robin Marshall, previously the managing director of 3i’s regional business in the UK, has been moved across to head up the team, alongside Whitney Bower, who joined 3i from Bain Capital Ventures in October 2005, and Ken Hanau, a recent recruit from US mid-market firm Halyard Capital.
In the last year the founding partners have added six other investment professionals, with at least five more set to join in 2007.
The new team will make investments of $20-$200 million (€15-€154 million) in companies with an enterprise value of up to $1 billion. Most will be minority investments in family-owned business looking to grow without ceding control.
The move comes soon after the launch of a new European team that will take stakes in publicly listed companies – another example of 3i’s willingness to influence companies through non-control stakes.
3i’s growth capital team now operates in 14 countries, and believes this international network will give it an advantage in the competitive US market. Marshall said: “Nobody in the mid-market in the US, or anywhere in the world, can match our network on either a sector or a geographic basis. This translates into high quality deal flow.”
In Europe, recent successes have included Vetco Gray, an equipment supplier to the oil and gas industry, which was sold to General Electric for $1.5 billion, and French directories business Poliris, which was sold for $455 million.
The US team is likely to build on the work of 3i’s US VC arm, which focuses on investments in software, communications, healthcare, cleantech and electronics.
3i’s growth capital business accounted for about one third of the firm’s business in 2006. It plans to invest about $1 billion in the US over the next five years.