3i Net Asset Value Advances 27% Amid Credit Turmoil

3i Group Plc, Europe's biggest publicly traded private equity firm, said the net value of its assets rose 27 percent in its fiscal first half even as rising borrowing costs crimped the pace of leveraged buyouts.

Net asset value rose to 1,007 pence a share in the six months to Sept. 30 from 792 pence in the year-earlier period, Chief Executive Officer Philip Yea said on a conference call with reporters today. That beat the 981 pence average forecast of three analysts surveyed by Bloomberg News.

Yea is boosting infrastructure and growth-capital investments to increase returns while allocating less to buyouts as banks struggle to clear, or syndicate, a backlog of leveraged loans. After a record $579 billion of takeovers in the first half, the pace of buyouts has slumped by almost 50 percent, according to data compiled by Bloomberg.

``In terms of summer's dislocation in the leveraged finance markets, the effect on mid-market hasn't been as pronounced as at the large end,'' Yea, 52, said today. ``We weren't as reliant on big underwritten syndications as the top of the market.''

3i reaped 1.04 billion pounds ($2.2 billion) from selling investments including Aibel Ltd., a Norwegian offshore oil and gas service provider, and Care Principals, a chain of British nursing homes it sold to a Qatari fund for 270 million pounds in July. That rate of realizations may now slow, the company said.
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