London Stock Exchange-listed private equity firm 3i Infrastructure Plc., which focuses on infrastructure assets investments in Europe and India, has churned out 9.3 per cent return on shareholders’ equity for the year ended March, 2011, the same as the previous year. The firm which is a sponsor to the $1.2 billion 3i India Infrastructure Fund, saw total portfolio value rise 18 per cent to £1.09 billion ($1798 million approx.) at the end of the accounting year.
The firm disclosed that as of 31 March, 2011, 3i India Infrastructure was 65 per cent invested and 70 per cent committed, having completed six investments. The fund was 42 per cent invested in the year-ago period, having completed three investments.
During the year, it invested $177.9 million in GVK Energy (it is developing a power portfolio, principally gas-fuelled, comprising an operational capacity of 915 MW, with a further 3,132 MW under various stages of development), $111.4 million in KMC Roads (it owns a portfolio of 10 build-operate-transfer road projects) and $45.2 million in Ind-Barath Utkal (it is building a 700 MW coal-fired power plant in the state of Orissa).
The fund’s existing portfolio investments include Adani Power Ltd, Soma Enterprise Ltd and Krishnapatnam Port Company Ltd.
Besides the three fresh investments in India, 3i Infrastructure Plc. also struck a large transaction in the UK last year. Its biggest deal was £2.1 billion ($3.4 billion) acquisition of Eversholt in consortium with Morgan Stanley Infrastructure Partners and STAR Capital Partners. Eversholt is one of the three top rail rolling stock companies in the UK, and owns approximately 29 per cent of the total British rail fleet.
According to Peter Sedgwick, chairman of 3i Infrastructure Plc., “The investment in Eversholt and further investments in India strengthen the company’s existing portfolio, which has continued to perform well throughout the year, generating strong income. The board looks forward to building on this positive momentum and it is working with the Investment Adviser to develop the pipeline for the next financial year.”
Although underlying asset performance deteriorated with 1.4 per cent growth in EBITDA of underlying equity investments over the previous year, compared to year-on-year EBITDA growth in underlying equity investments of 11.2 per cent for the year ended March, 2010, 3i Infrastructure Plc. said that it had generated 19 per cent annualised asset IRR since inception.
In December last year, 3i Group Plc. said that it had plans to launch a separate $1.5 billion infrastructure fund for India in 2011 to strengthen its investments in sectors like power, ports and roads. The 3i Group also has separate investments in India, spanning other sectors like entertainment and farm equipment.