Growth is the word at 3i Group. A transformation programme starting in 2012 and ending in 2015 intended to create a streamlined organisation, eradicate efficiency and build a more resilient business has seen 3i report improving performance.
Over 3i’s platforms of mid-market private equity, infrastructure and debt management, 2015 saw record growth across all three, with private equity and infrastructure generating increased investor returns of 24 per cent and 20 per cent respectively. 3i’s debt management platform, meanwhile, increased its assets under management by 12 per cent, from £6.5bn to £7.3bn.
The transformation programme has also helped spur a 30 per cent upsurge in operating profit, from £470m to £677m. Building on this growth is now the strategy for the investment manager, while remaining strong both commercially and financially.
In-house team
General counsel and company secretary Kevin Dunn oversees a small legal set-up that includes an established team of nine senior lawyers. Dunn joined 3i in 2007 after five years as European general counsel at General Electric Capital, General Electric’s commercial finance division. Dunn is a former partner at Travers Smith and Latham & Watkins, and sits on 3i’s management committee.
One of the longest serving members of the in-house team is former Nabarro lawyer Alastair Richardson who has been at 3i since 1998. As director and head of legal Richardson forms part of the private equity team with responsibility for legal risk management and supporting new investment activity. Jim Stoner also joined in 1998, initially working in the investment business. He is now senior counsel in the infrastructure team, a position he has held since 2007.
Former Clifford Chance associate Nicola Tassell joined 3i in 2004 and has sole responsibility for all legal aspects of 3i’s business in Asia, including supporting investment teams in China, India and Singapore. Tassell, who relocated from Singapore to London in 2014, is also responsible for 3i’s panel of external advisers in Asia.
Linda Roberson joined 3i in 1999 as senior counsel and since 2010 has held the position of senior regulatory counsel. Former Allen & Overy (A&O) associate Roberson works closely with fellow senior regulatory counsel Jo Glasgow, who joined 3i in 2009.
LMI data shows that 3i’s deal activity has increased from eight transactions in 2012 to 30 in 2015. It also indicates that private equity investments have formed the bulk of these deals, although in 2015 3i’s most frequent transactional activity was divestment.
This increasing level of divestment by 3i formed a central part of its transformation programme and its strategy to raise dividends and profits. According to LMI data 3i’s most prolific period of activity in this regard was between March 2015 and May 2015 when it carried out six divestments out of a total of 12 for the whole of 2015.
Despite this, LMI data shows that 3i also continued investing. Much of this activity centred on relocating assets to core sectors and geographies in northern Europe and North America.
Among 3i’s biggest deals in 2015 was a €250m (£183m) investment in Germany’s Weener Plastic Packaging. A&O advised, with the team led by Frankfurt-based private equity partners Michael Bernhardt and Markus Käpplinger. Clifford Chance partner Alexandra Hageluken advised 3i on financing aspects, including the securitisation of a €250m loan facility from a syndicate of seven banks.
Clifford Chance also advised 3i in July 2015 as part of its £111m investment to acquire Danish offshore oil services company ESVAGT from Danish conglomerate Maersk. The London-based Clifford Chance team included partners Brendan Moylan, Jenine Hulsmann and Michael Bates.
In February 2015 Travers Smith, led by private equity partners Lucie Cawood and James Renahan, advised 3i on its first investment in the UK since 2011, a £105m injection into Sussex-based condensate removal pumps manufacturer Aspen Pumps. At the end of the year 3i acquired a £159m stake in travel operator Audley Travel from investment firm Equistone Partners Europe.
Between 2014 and 2015 3i’s debt management platform closed six collateralised loan obligations in Europe and North America. The fundraising comes after it closed a new €250m European mid-market loan fund in November 2014.
LMI data indicates that 3i turns to a core panel of nine advisers; A&O, Addleshaw Goddard, Clifford Chance, Freshfields Bruckhaus Deringer, Kirkland & Ellis, Macfarlanes, Travers Smith, Slaughter and May and Willkie Farr & Gallagher. 3i has also instructed Nordic firm Roschier, Paris-based Bremond & Associes, magic circle firm Linklaters and Pinsent Masons.
According to LMI data Clifford Chance is the most popular firm in the private equity sector, with 107 clients. It is also the most active, having undertaken 381 deals since 2012. White & Case is the second most popular firm, with a client base of 82 private equity houses, and is also the second most active, with 277 deals.