So much cash is floating around private equity looking for a home that asset prices are far too high.
That’s the view of 3i chief executive Simon Borrows, who otherwise has an optimistic view of the near future.
3i made a total return of 10% in the six months to September, and net asset value per share rose more than 7% to 776p.
3i itself has plenty of cash on hand to deploy, easily more than £500 million, but is wary of the most obvious opportunities.
“We have good momentum across our portfolio, but remain cautious about the pricing of new investment in general,” he told the City.
Borrows’ response to this is “trying to prioritise… (deals) where we have a particular competitive advantage”.
Around 80% of 3i’s business is private equity, with the rest infrastructure.
On the new Brexit deal, Borrows had no opinion, yet. “I haven’t begun to read the 500 pages and I’m not sure I’ll have time,” he said.
Borrows added: “We remain confident in the growth plans across our investments and will maintain our focus on active management to maximise value for our shareholders and co-investors.”
3i is paying an interim dividend of 15p. The shares slipped 18p to 842p. They have roughly doubled in the past two years.
