Spotlight 3i Group: Innovators in ESG-Focused Private EquityAugust 31, 2021
A private equity and venture capital company based in London, UK, 3i Group invests in mid-market companies. Its unique strategic approach aims to cover costs with income from investments and fees, thereby minimizing dilution of capital. 3i describes its collaborations with investees as responsible and long-term, based on strict adherence to ESG standards. It avoids sectors it deems unsuitable to its values. The firm typically makes 4-7 new investments a year, creating value through organic growth, acquisitions and strong cash generation.
Investments follow structural trends and today are mostly focused on the consumer segment at 76% of assets. For example, European demographic shifts such as increasing life expectancy, aging and declining population and the associated consumer preferences, behavior changes and policy responses have guided many of 3i’s recent choices for private investment. Two such firms in this portfolio are Cirtec Medical, an outsourced medical device provider, and Havea, a maker of natural wellness products. Likewise, 3i believes the consumer experience is increasingly mobile and data driven and has invested to benefit from this trend in companies like GartenHaus, an online retailer of garden sheds and saunas, Luqon, an online lighting retailer serving Europe, and MPM, an international premium, natural pet food company based in North America.
In addition to private equity investments, the firm invests in defensive infrastructure assets such as an offshore fiber cable system in the Gulf of Mexico, offshore wind energy projects, a German telecommunications company, and the US-based companies Smarte Carte and Regional Rail, recently deemed an essential service during shutdowns. Lastly, a significant investment in Danish ferry operator Scandlines delivers long-term returns and generates cash dividends to finance spending. To drive future growth, 3i has an eye on accelerating economic social trends in consumer goods, e-commerce, healthcare, business and technology services and infrastructure.
As of 6/30/21, 3i Group was held in the Knowledge Leaders Strategy.