3i posts solid performance, refinances assets

The listed vehicle’s portfolio generated £20.2m during the last quarter, a period that also saw its newly acquired BIFM platform make its first investment.

3i Infrastructure, the infrastructure investment arm of London-listed 3i, today posted interim results that showed a positive last quarter of the year for the firm.

The European assets – which represent 93 percent of the portfolio – performed strongly in the three months to 31 December 2013, the firm said. Meanwhile, the period also proved a more stable one for its Indian investments (which make up 7 percent of the assets).

3i Infrastructure’s portfolio generated income of £32.7 million (€39.8 million; $54.3 million) during the last quarter. This included income of £20.2 million accrued from Elenia, Finland’s second-largest electricity distribution network, which completed a successful refinancing earlier in the year.

Rolling stock asset manager Eversholt also successfully raised £600 million from 11 banks in November, the proceeds of which were earmarked to fund new investments and prepay existing debt. 3i expects both refinancings to be value accretive over the long term. Portfolio income from the beginning of the current financial year to 31 December 2013 was £63.6 million.

The period also saw 3i complete its first investment funded via Barclays Infrastructure Funds Management (BIFM), the platform it bought from UK lender Barclays Group in May 2013, through a €6.3 million investment in an 80 percent holding in the National Military Museum project in the Netherlands.

With assets under management worth £780 million, BIFM brings public-private partnership (PPP) expertise to 3i’s existing resources via two unlisted funds that invest in UK and European PPP and renewable energy projects. 3i expects to boost its PPP exposure from 10 percent today to 20 percent over time.

The company also displayed a sound cash balance, with available liquidity comprising £96.5 million in cash at 31 December 2013 – before payment of a £29.5 million interim dividend on 9 January 2014 – and an undrawn £200 million acquisition facility.

Broker Numis Securities estimates that the firm's shares now trade on a premium of 8.5 percent to the March 14 net asset value and currently yield 5 percent.