3i's shares rose 5.9% this morning after the private equity firm said the value of its portfolio of investments gained 15% last year.
In an upbeat statement to the City, the private equity firm said that its net asset value rose to 321 pence at the end of March, from 279 pence one year earlier.
3i Group's businesses include coffee and tea chain Cafe & Te, yacht maker Fairline and the Gant clothing line. Evolution Securities analysts Bill Barnard and Michael Sanderson were encouraged that the company's assets had risen in value:
If 3i can deliver the first real signs of tangible recovery in the health and valuation of the portfolio, then recent equity market weakness may provide an attractive entry point. We believe such a recovery is underway and that Buyouts will be to the fore.
Private equity companies have returned to action after the global credit crunch cut debt financing, slowing down the number of deals. Credit markets opened earlier this year, allowing buy-out firms to issue junk bonds to refinance their highly-indebted portfolios.
3i's shares had risen 20.30p to 288.5p shortly before midday in London.
