Our business model
Characteristics we look for in new investments
We look to build and maintain a diversified portfolio of assets, across a range of geographies and sectors, whilst adhering to a set of core investment characteristics and risk factors.
The Investment Manager has a rigorous process for identifying, screening and selecting investments to pursue. We look for businesses that combine a base of strong cash flow resilience (for example, contracted revenues) with long-term underlying market growth fundamental, potential operational improvements and M&A opportunities, which allows us to deliver above target returns. Although investments may be made into a range of sectors, the Investment Manager typically focuses on identifying investments that meet most or all of the following criteria and are aligned with identified megatrends:
Owning or having exclusive access under long-term contracts to assets that are essential to deliver the service.
Assets that require time and significant capital or technical expertise to develop, with low risk of technological disruption.
Services that are an integral part of a customer’s business or operating requirements, or are essential to everyday life
Businesses that have a long-standing position, reputation and relationship with their customers – leading to high renewal and retention rates.
Long-term contracts or sustainable demand that allow us to forecast future performance with a reasonable degree of confidence.
Businesses that have downside protection, but the opportunity for outperformance.
Opportunities to grow or to develop the business into new markets, either organically or through targeted M&A.
Businesses that meet or are committed to meeting the criteria set out in 3i's Responsible Investment policy and will work with us to enhance their sustainability maturity using our sustainability pathway.
Our business model creates long-term value for stakeholders
Enablers
The Company is managed by an experienced and well-resourced team. The European infrastructure team was established by 3i Group plc in 2005 and now comprises approx. 45 people, including over 25 investment professionals.
3i Group has a network of offices, advisers and business relationships across Europe. The Investment Management team leverages this network to identify, access and assess opportunities to invest in businesses, on a bilateral basis where possible, and to position the Company favourably in auction processes.
The Investment Manager seeks to acquire controlling stakes in the businesses in which we invest. This enables active asset management and value creation through control of portfolio company boards, appointment and incentivisation of excellent management teams, setting strategic direction, capital allocation, operational oversight and discretion over timing and manner of exits.
The Investment Manager and the Company have established a strong reputation as responsible investors through a consistent focus on sustainable portfolio management, high standards of conduct and long-term value creation. We have earned the trust of shareholders, investors and investee companies, which the Board is committed to maintaining through transparent, high-quality corporate reporting and open and constructive stakeholder engagement.
Established investment and asset management processes are supported by the Investment Manager’s comprehensive set of best practice policies, including governance, conduct, cyber security and anti-bribery.
The Company’s flexible funding model seeks to maintain an efficient balance sheet with sufficient liquidity to make new investments or support portfolio companies. Since FY15 the Company has raised equity three times and returned capital to shareholders twice following successful realisations. Net equity issuance over that period was only £135 million.
How to create value
Buy well
Effective use of 3i's network
Comprehensive due diligence
Consistent with return/yield targets
Fits risk appetite
Enhance
Make immediate improvements
Board representation
Appropriate Board composition
Incentivise and align management
Accretive growth capex
Agree strategic direction
Develop action plan
Right capital structure to fund growth plan
Enhance sustainability maturity
Prepare for exit
Ongoing support
Monitor performance
Review further investment opportunities
Facilitate and execute M&A
Realise and recycle
Position business and enhance infrastructure characteristics to maximise exit value
Long-term view but will sell to maximise shareholder value
Active asset management
Value created (year to 31 March 2026)
Financial
8.5 %
Total return on opening NAV
12 %
Net annualised return (since inception)
13.45 p
Ordinary dividend per share
18 %
Asset IRR (since inception)
Non-financial
£ 419 m
Total growth capex invested across the portfolio in the year
20 %
TCR exit delivered a 20% gross IRR over the lifetime of the investment