Listed British private equity firm, 3i Group plc, which has been struggling after leveraging its own balance sheet to pay for a series of share buybacks over the past few years, has now resorted to putting its venture capital portfolio up for sale to secondaries investors, in the hope of raising £300 million to £400 million ($415 million to $555 million).
A source close to the situation said a report in Financial News suggesting 3i had brought in specialist private equity adviser and secondary portfolio sales agent Campbell Lutyens & Co. Ltd. was broadly correct.
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3i declined to comment on the sale, but has long been open about managing and eventually divesting its venture portfolio to focus on its core business of growth capital, infrastructure investments and midmarket buyouts.
That process had been going relatively well until now, with the large majority of the small investments and venture portfolio having been sold off over the past few years. So to try and sell the remaining portfolio in one or more lots at a time when the big secondaries investors have been holding back from making purchases while they wait for the market to bottom out smacks of desperation. Still, it probably makes sense for 3i to cut debt with whatever it can get now than to wait for the best price for a portfolio consisting mainly of investments it has failed to sell so far. - Jonathan Braude
