Florida divests 3i fund stakes

The funds include 3i Growth Capital Fund and 3i Eurofund V, which generated a 2.9x return on the sale of Singaporean healthcare company LHi Technology last week.

The State Board of Administration of Florida has sold its interests in two 3i funds to Partners Group, according to UK regulatory notices. The funds include 3i Growth Capital Fund and 3i Eurofund V.

3i Growth Capital Fund closed on €1.2 billion in 2010, according to PEI’s Research and Analytics division. The fund made minority investments in high-growth mid-market companies and is no longer making new investments.

3i Eurofund V is a 2006-vintage fund that raised €5 billion, according to PEI data.

Florida isn’t the first LP to divest Eurofund V from its portfolio. In August, The New Mexico State Investment Council also sold its stake to Partners Group and in July another LP sold its stake back to 3i for £27 million.

3i declined to comment, but Secondaries Investor previously reported the firm had been retooling its business and restructuring some of its funds.

Eurofund V started to struggle in March 2011, when it was only 71 percent invested and investors were receiving a 0.8x return on commitments. The fund’s investment period ended in November 2011.

As of 31 March 2013 Eurofund V was generating a multiple of 0.93x. However, performance improved throughout the year, which helped the fund’s valuations recover to a 1.13x multiple as of 31 March 2014. At the time, the fund was 90 percent invested with the remaining capital to be used for investments within the existing portfolio.

Eurofund V has recently exited several investments including Singaporean medical cable manufacturer LHi Technology and acute care company Vedici. The exits generated returns of 2.9x and 2.1x respectively, according to the firm’s website.

3i’s private equity team is different to the team that made the original Eurofund V investments, the firm’s chief executive officer Simon Borrows said last year.

“I feel we need a period where the current private equity team, under these current arrangements and stewardship, needs to make investments, manage investments and exit investments,” Borrows said. “They came together at the end of 2010 and started to do this in 2011 – and I think we need a little longer for them to evidence progress, before we go forward to the market.”

Despite the improved performance 3i will not consider raising a successor vehicle until 2015, the firm has previously said.

Florida announced in its 2014 investment plan that it expects to continue to review secondaries opportunities as both a buyer and seller of fund interests. The $180 billion pension was unavailable to comment by press time.

Partners Group also declined to comment. The firm is investing Partners Group Secondary 2011 which closed on €2 billion and is reportedly gearing up to launch Partners Group Secondary 2015, according to PEI data.