”Private equity thrives on change and times of economic disruption or transformation always provide opportunities. So the deals will be there to do in 2008, even if conversion rates are lower due to pricing perception gaps.
It is unlikely to be a buyers market though, competition for the best deals will remain intense and differentiation will continue to be key.
2008 will certainly be a time for the industry to demonstrate the strength and performance of the PE model, and to remain on the front foot in terms of communication.” Philip Yea, 3i chief executive.
2007 was a sparkling year for 3i. In the last six months alone 3i more than doubled its investing to £1.23 billion (€1.76 billion; $2.59 billion) to the end of September in comparison with £589 million in the same period last year.
3i also realised £1.04 billion during the six months in comparison to £849 million previously. This figure includes the group’s proceeds from its £540 million sale of Nordic service provider Coor Service Management to Cinven at an enterprise value of 17.5 times EBITDA, according to someone close to the deal. The firm made £337 million profits on divestments up from £216 million previously.
It also made a gross portfolio return of 14.3 percent in comparison with 11.6 percent previously and a net portfolio return of £453 million with a total return of £512 million, a 12 percent return on shareholders funds. It issued a dividend of 6.1p per ordinary share. The firm has £8.18 billion of assets under management, up from £7.03 billion previously. The assets were split between £5.13 billion on its balance sheet and £3.05 billion invested for third party funds, a NAV per share of £10.07.