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3i Infrastructure turns away from India

10 May 2013

UK private equity group 3i is to stop investing in Indian infrastructure via its listed 3i Infrastructure platform, citing inadequate returns.

3i Infrastructure invests in Europe and Asia, with a focus on the utilities, transportation and social infrastructure sectors

At the time of going to press its share price was at 131.06p, a slight decline from its 12 month high of 134.04p on 8 April.

The listed vehicle acts as an LP to 3i’s $1.2bn India-focused infrastructure fund, which it closed in 2008.

Peter Sedgwick, chairman of 3i Infrastructure, said, “This was a successful year for 3i Infrastructure, which delivered a total return of 8.6 per cent on shareholders’ equity and strong portfolio income. Our investments in the European portfolio continued to perform in line with, or above, our expectations. The performance of the India Fund, however, continued to be affected by challenging conditions.”

He added “In its annual strategic update, the board assessed the company’s investment strategy in light of the likely evolution of the portfolio in the current market. As a result of this review, we updated our return and dividend objectives to ten per cent and 5.5 per cent respectively. We are confident that we have a strategy in place to deliver these objectives.”

In February, two of the firm’s Asia-focused investment team left. Anil Ahuja, managing partner, and Girish Baliga, partner left two months after the Indian fund’s investment period expired.

The firm has no plans to raise a new India-focused infrastructure fund, according to a source close to the firm.

In the 12 months since Borrows’ appointment, 3i has undergone a radical overhaul, trimming its workforce and closing a number of overseas offices. Earlier this week, AltAssets reported that turnaround investor Sherborne had increased its stake in the firm.

Copyright © 2013 AltAssets

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