VENTURE capital firm 3i Group is continuing to target Scottish investments, despite suffering a huge fall in its asset values last year.
Robin Marshall, head of Scottish operations for Britain’s biggest investment company, said medium and long-term prospects for Scotland were good, although he admitted there was now a “new air of realism” in the market.
He said the highlight of 3i’s Scottish divestments during the year was the GBP 65.3 million sale of First Engineering to Peterhouse Group, which gave 3i a GBP 17m return on a GBP 7m investment.
He said 3i had been the only private sector equity investment firm to have made significant investments in Scotland last year. “We’re pretty pleased with our performance in the central belt. We have made some encouraging deals during the year.”
Among 3i’s Scottish investments last year were GBP 5m in funding for the buy-out of James Barr Consultants, the Glasgow telecoms consultant subsequently renamed Mono Consultants; a GBP 10m investment in East Kilbride computer repair firm Display Products Technology, and a GBP 7m investment in the GBP 25m buy-out of Dunfermline camping and mobile home tour operator Canvas Holidays.
“We are also continuing to support early stage technology companies, such as Ardana Bioscience, Intense Photonics and Aspects Software.”
Marshall said the Scottish market had generally followed the rest of the UK. “We’ve had a reasonable level of activity, but it has been lower than in previous years.
“In the venture capital industry, there is, I think, a new realism in the market. There is now a very helpful dose of realism. The sector is now much clearer about what a hi-tech company needs to do succeed, and the need to assess the applicability of technology.”
He predicted 3i would maintain a similar level of investment and divestment in Scotland over the next year.
His comments came as 3i announced that the worst bear market in a generation had eroded its net asset value by 25 per cent to 480p a share in the year to 31 March, with its technology investments hit hardest. However, the NAV figure was still well ahead of market forecasts of about 452p.
The company’s shares rose 7 per cent to 516.75p. The company declared a dividend of 13.5p, up 3.8 per cent.
