A sharp fall in equity values pulled private equity investor 3i into the red in the six months to end-September, with last year's unrealised gains of £196m having been turned into a £441m devaluation. Accordingly, there was a 15.6 per cent negative return on shareholders' funds. And, while total assets under management rose from £9.3bn a year earlier to £12.3bn, this was down from £12.7bn at the March year-end.
However, the underlying picture was brighter, with realised gains edging ahead from £30m to £31m while portfolio income held steady at £79m. And, on a value-weighted basis, the portfolio generated earnings growth of 8 per cent. Total investment rose from £327m to £448m, too. 3i has also worked hard to strengthen the balance sheet so that it can more effectively ride through the current downturn. Indeed, from a peak of £1.9bn in March 2009, net debt has been reduced to £531m. Net operating expenses have also been reduced, from £59m to £55m, and the group has undrawn facilities totalling £1.7bn.