May 16, 2019 / 6:47 AM / 2 months ago

Private equity firm 3i a net seller as total returns up 18 pct

* Total return in FY to end-March 1.26 bln stg

* Plans dividend of 20 pence in July

* CEO cautious market uncertainty

By Simon Jessop

LONDON, May 16 (Reuters) - British listed private equity company 3i on Thursday posted a full-year total return of 18%, driven by strong earnings growth across its portfolio of investments.

Total return in the year to the end of March was 1.26 billion pounds, it said in a statement, down from 1.46 billion pounds a year earlier and the company said it remained a net seller amid highly competitive and richly valued markets.

Private equity firms like 3i have become increasingly attractive to institutional investors keen to secure higher returns than those on offer in other asset classes.

However, the increased demand has boosted valuations for certain assets and fuelled concerns about price bubbles.

“Despite the economic uncertainties, debt markets remained available throughout the year and high demand... enabled us to sell a number of assets at attractive exit valuations,” Chairman Simon Thompson said in the statement.

Chief Executive Simon Borrows said business had remained strong since the end of its reporting period, with “a growing tide of funds looking to invest in our markets”.

“We remain cautious in this environment, which will lead us to be careful about the pricing of new investments and to deploy further capital in companies we already know well.”

3i’s private equity unit posted a gross investment return of 20%, driven by investments in companies including Action, Cirtec Medical and Audley Travel.

Its smaller infrastructure business, meanwhile, generated a total return of 33%, helped in part by proceeds from the sale of XLT.

More broadly, sales brought in proceeds of 1.2 billion pounds, of which 529 million pounds was reinvested in Scandlines, it said.

3i said it would pay a total dividend of 35 pence per share for the full year, with a dividend of 20 pence to be paid in July. (Reporting by Simon Jessop, editing by Sinead Cruise)

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