3i Infrastructure warns on Indian fund valuation

1st Oct 2013 07:31

Major depreciation of the rupee and investee company issues dogged the Indian arm of 3i Infrastructure, while its European portfolio saw income generation slow in the second quarter.The FTSE 250-listed private equity fund's India subsidiary continued to deteriorate, driven by a tougher macro environment and major depreciation of the Indian rupee, against sterling in particular where it was down 19%. Moreover, the share price of shareholding Adani Power declined 21% in the period as it lost favour in the market, while another investeee company, Soma Enterprises, continued its debt restructuring process that is expected to lessen the value of the fund's stake. Back in Europe the fund made net investment of £64m in the period, mostly in Cross London Trains, which will invest in rolling stock for the Thameslink commuter rail franchise. Cressida Hogg, Managing Partner for Infrastructure, said this was an important milestone for the company and was already delivering income.The broader European portfolio portfolio spouted income of £30.9m in the period between April 1st and September 30th, which was up 3% year-on-year but performance in the second quarter was down on the first.Hogg spied more potential activity for the European portfolio from 3i Group's acquisition of the Barclays Infrastructure Funds Management business, which is run out of London and Paris and has £780m of assets under management.When completed, Hogg said the deal "is likely to result in incremental deal flow for the company, in particular in the primary PPP space". At period-end, cash balances were from from £97m to £94m.OH