3i Says Portfolio ‘Generally Resilient’ Amid Brexit Worries

  • Private equity proceeds were 438 million pounds last quarter
  • Net asset value per share rose to 538 pence as of June 30

3i Group Plc, the U.K.’s largest publicly traded private equity firm, said the company’s portfolio should be “generally resilient” amid volatile markets and the fallout from the country’s vote to leave the European Union.

3i received 438 million pounds ($573 million) in proceeds from private equity sales in the first fiscal quarter, ended June 30, the company said in a statement Wednesday. This fiscal year so far, the firm received 581 million pounds. The firm’s diluted net asset value per share rose to 538 pence last quarter from 463 pence at the end of March.

The Brexit vote last month, and the resulting decline in the value of the pound, poses a threat to U.K. funds who make investments in sterling. Still, 3i has more than half of its net assets in euros and 13 percent in dollars, mitigating the impact, finance director Julia Wilson said in an interview Wednesday. The company’s investments are also proving to be generally defensive, with the exception of German jewelry chain Christ, which was hit by weaker demand and fewer Chinese tourists in Europe, she said.

“Despite the U.K.’s recent vote to leave the EU, it is business as usual for 3i. We have a well-funded balance sheet, and believe that recent market volatility could present good investment opportunities,” Wilson said. “We can be fleet of foot as a buyer, but price still remains key.”

The value of Action Nederland BV, the discount retailer that’s listed as the company’s largest investment, grew to 1.49 billion pounds in the quarter from 902 million pounds at the end of March, 3i said. The value increased “due to a number of third-party offers” as well as strong financial performance, the firm said.

In May, the company invested 181 million euros ($199 million) in Schlemmer GmbH, a German cable management company for the automotive industry, and this month, the company announced an approximately 132 million pound investment in interior design firm BoConcept Holding A/S.

“There is a huge wall of capital to be deployed, and we could see a scenario where the larger funds sometimes drop into our price segment,” Wilson said.

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