3i is now searching for a new chief executive, as 25-year 3i veteran Michael Queen has revealed plans to leave the beleaguered London-listed private equity group.
The board has begun the search for a new CEO, according to a statement that noted Queen would depart once a replacement was found. The firm would not comment on any likely candidates or whether it would favour an internal or external appointment.
Queen told sister publication Private Equity International that his decision's timing was in part to do with wishing to take on a new executive challenge, but he also indicated that the restructuring he's led at 3i during his three-year tenure as CEO had put the firm in a good position to be taken forward by new leadership.
We’ve just completed the final stages of transforming our balance sheet and putting 3i in a strong position for the future.
3i invested a total of £623 million (€743m; $990m) in the 11 months to 29 February, compared with £581 million in the equivalent period last year, according to a trading statement released Thursday. This did not include approximately £100 million of investment in Geka, the German cosmetics packaging business and Blue, a cable TV and broadband provider, 3i first ever investment in Brazil. Realisation proceeds over that period totalled £764 million, the firm said.
Ratings agency Standard & Poor's downgraded the firm's credit rating on Wednesday from BBB+ to BBB, just two notches above junk status, citing volatile investment performance and persistent negative cashflow.
Though Queen was re-elected chief executive with a massive majority at the group’s annual general meeting in July, some shareholders have disagreed with plans to spend available capital on diversifying the business rather than using share buy-backs to address 3i’s NAV discount.
“Over course of last year we had a number of shareholders saying given our financial position we should do share buybacks. I was very resistant to that, as that’s one of the reasons we got into financial difficulties in the first place, and therefore there was a degree of tension,” Queen said. “We spent a lot of time talking to shareholders explaining the perspectives, and most of them I have to say came round to why I was taking that position. I tend to have a preference for running a business with a conservative financial strategy and high levels of liquidity.”
Asked if shareholder disagreements had influenced his departure, Queen said: “It’s my decision but I’ve absolutely taken into account what is the right time for the company to do this.”
3i Group chairman Adrian Montague said of Queen: “His leadership through the period of the global financial crisis in restoring 3i’s financial strength, his founding of our highly successful Infrastructure business and the strong management team he has put in place are just three of his many achievements with the Company.”