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Share rally helps 3i realise £7.4m from difficult India Infra fund

10 Jul 2014

indian-flag-1430532-mLondon-based private equity firm 3i Infrastructure has sold a portion of its holding in listed infrastructure company Adani Power.

A rally in the Adani share price on June 24 helped 3i’s Infrastructure realise its investment and claw back £7.4m from its 3i India Infrastructure Fund, according to the firm’s Interim Management Statement.

The firm originally invested $227m in 2007, approximately £158.8m by today’s conversion rates.

It is the first realisation of the £1.2bn infra fund which was the biggest of its kind when it closed in November 2012.

It has not been a smooth ride for the vehicle, with investors reportedly disappointed with the performance and 3i announcing it would not make any more investments in Indian infrastructure, despite having committed just 73 per cent of the fund capital into seven companies.

3i blamed factors such as a difficult policy environment and fluctuations in conversion rates for the fund’s woes.

The firm said this week that the Adani stake sale was according to its strategy to take advantage of positive market momentum.

In a joint statement managing partners Ben Loomes and Phil White said, “It is our intention to manage the investments in that fund for realisation over the next few years.

“We continue to build on our pipeline of core infrastructure and primary PPP [public-private partnership] investments and are well placed to bid for a number of investments expected to come to market in the second half of the financial year.”

Other companies in the portfolio include energy business Uktal, which 3i paid $45m for a minority stake in in 2011.

The year has seen a number of departures, including 3i’s infrastructure head Cressida Hogg moved to the Canada Pension Plan Investment Board in February this year, swiftly followed by the firm’s head Anil Ahuja who left in March to launch a $100m India-focused hedge fund.

Other 3i funds have had success in other areas, with the firm announcing that it made a 2.3-times return selling vehicle engine and transmission maker Hilite International in a £384m deal in 2013.

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