3i Drops Planned Brazil Fund, Won’t Make Investments in RegionSarah Jones
3i Group Plc, Britain’s biggest publicly traded private-equity firm, abandoned plans to raise a fund targeting investments in Brazil.
The firm won’t make any new investments in the region and will now cut the resources it has in the country, Chief Financial Officer Julia Wilson told reporters on a conference call today. 3i employs eight people in Brazil.
“Conditions have changed over the last 12 months,” she said. “The macro is not as we had planned for,” she added, citing October’s election and currency volatility. She declined to say how much the firm had planned to raise for Brazil.
3i is retreating as the U.S. Federal Reserve’s decision to taper its bond-buying program crimps demand for emerging-market assets. The firm, along with competitors such as TPG Capital and Carlyle Group, expanded into Brazil after the financial crisis of 2008 to tap the country’s growing middle class and economy.
The London-based firm made two investments in the country, including Oticas Carol, the nation’s second-largest eyeglass retailer, with a total value of 34 million pounds ($56 million).
3i also said today the net value of its assets climbed 3 percent in the final three months of 2013 to 333 pence.
“Our portfolio continues to perform well, with our larger investments growing strongly,” Chief Executive Officer 3i Simon Borrows said in a statement. “We continue to see very good momentum in the business. We returned to a good level of investment activity, completing four major investments.”
The company spent 247 million pounds buying stakes in companies in the period, compared with 81 million pounds in the first half. 3i acquired Scandlines, a ferry operator in the Baltic and Basic-Fit, a European gym-owner. The firm said it doesn’t expect to complete “any significant” new private equity investment in the fiscal fourth quarter.
The firm reaped 29 million pounds from selling assets in the period, down from 528 million pounds in the first half. 3i expects to receive about 53 million pounds in the final quarter from the sale of its holdings in Bestinvest, a British wealth manager, and Everis, a Spanish information-technology consultant.