British private equity firm 3i Group Plc saw new deals activity rise, recovering from last year's sector lows, as it beds down a new structure after a shake-up that saw its head of buy-outs resign this month.
Despite high asset prices, investments in buyouts trebled in the first five months of August to 236 million pounds ($374.1 million) from 86 million pounds in 2009, 3i said in a statement on Thursday.
Overall investments were up more than 65 percent to 257 million pounds, while revenues from investments sold -- or realisations -- fell to 129 million pounds from 448 million pounds in 2009.
High asset prices continue weigh to heavily on new deals, with chief executive Michael Queen saying the firm would keep its focused approach, targeting sectors such as healthcare, where the group still sees good value.
But the competition for assets will help 3i sell businesses at attractive prices. Queen said there is strong demand for general industrial companies with a good product range, good manufacturing efficiencies and international prospects.
"Continental Europe seems to be very attractive to international corporate buyers at the moment," said Queen.
Shares in the company were down 0.9 percent at 0731 GMT after the company told analysts that any gains made on company sales in the second half are unlikely to be shown in asset values for those businesses in the six months to end Sept.
Queen has led some changes at the firm in recent weeks, merging the buyouts team with the growth capital business that specialises in buying minority stakes in fast growing businesses.
The move led to the surprise departure of 3i's leading dealmaker Jonathan Russell, a 24-year veteran of the firm.
"The organisational change which 3i has been flagging in recent weeks will take some time to come through (and) the key driver of the business in the short term will be realisations and earnings growth at underlying companies," said Oriel analyst Iain Scouller in a note.
3i also announced a deal for debt management firm Mizuho Investment Management earlier this week, a move designed to bolster the group's corporate debt investing business, and one which is seen moving the firm further from a buyouts model to a broader asset management business.
"This isn't about being undecided on private equity at all... it's about adding to that," said Queen. - Reuters