3i Share Discussion Threads

[chc15] 12/5/2023 15:34

yet another Director buy at this high level, very interesting.

[cardinal3] 12/5/2023 12:56

This is a play on Action rather than PE generally, and is very visible with the presentation earlier this year, which showed significant potential growth. Something will have to give at some point given the proportion of Action in the portfolio. I do wonder whether another firm is looking at this for a t/o with a view to floating off Action. Just my own thinking without any evidence.

[chc15] 12/5/2023 07:32

Good article, the Action demerger option is interesting, though doubt that will happen. Therefore this is still a strong buy, as global institutions have to buy 3i for exposure. Value, growth, income, pe all in one stock.
I wish I bought more earlier this week, no brainer!

[jonwig] 12/5/2023 06:34

Thanks. The article doesn't add anything new but gives a pretty strong buy recommendation.
If you register you can, I believe, read two free articles a week free. Here's the Questor link:



There's another article about 3i. here's the gist;

... in terms of value creation for UK investors, Action has been unparallelled. 3i has made almost 100 times its initial investment since alighting on the no-frills discounter in 2011.

Another record-smashing year has boosted the value of 3i’s 53 per cent stake in Action to £11.2 billion, up from £7.2 billion a year ago. That compares with £8.8 billion for the entire market value of Next.

The 2,300-shop Action chain seems to be one of those rare things, a franchise that can expand from country to country with absolutely no loss of customer appeal. If there are diseconomies of scale or cultural impediments, it hasn’t encountered them yet.

Borrows deserves kudos for running this bet for 12 years and not being tempted to cash out early. He would have been a mug to do so, he says, and 3i shareholders will doubtless agree, even with so many of their eggs in the one basket.

But the idea that 3i can continue to bill itself as a general investment company now stretches credulity. Action, which Borrows chairs alongside his 3i job, now accounts for 61 per cent of the total 3i portfolio, up from 59 per cent in January. That is an egregious level of concentration of risk.

One option would be to accept reality and rebrand and recategorise 3i as a retailer in the FTSE listings. The company is attracting as much attention from retail analysts as their investment trust counterparts.
Business Briefing
Morning and midday updates on financial and economic news from our award-winning business team.

But that would be to diminish 3i’s wide investor appeal as a blue-chip listed vehicle that gives easy access to private equity and to infrastructure investment.

Perhaps better would be a demerger of Action into a separate listed company. 3i shareholders could be given free Action shares and could decide for themselves whether to run the bet further or take some profit off the table. If Borrows is right about how conservatively Action is valued in the 3i books, they could expect a boost in value. The two businesses in aggregate would be worth more than the single entity.

Borrows doesn’t agree. Action has boomed, he argues, partly because there is none of the distraction of the public markets. But if it continues to thrive, the conundrum for 3i will only intensify.
I don't agree much there.

[steeplejack] 12/5/2023 06:08

Tempus buy recommendation in todays Times

[chc15] 11/5/2023 07:14

Indeed, amazing results considering the current environment.
Wonder what the NAV will be once mkt condition's improve, I can see £20 next year easy.

[jonwig] 11/5/2023 06:30

FY results -



Total return of £4,585 million or 36% on opening shareholders' funds (2022: £4,014 million, 44%) and NAV per share of 1,745 pence (31 March 2022: 1,321 pence).

... driven primarily by Action's very strong performance in FY2023, with a good contribution from a number of our other portfolio companies operating in the value-for-money and private label, healthcare, industrial technology and business and technology services. We saw weaker trading in a small proportion of our portfolio, most notably our discretionary consumer segment.

So more broad-based than just Action. Can't help thinking that PE in general is a lot healthier than markets assume.

[chc15] 10/5/2023 09:32

Sold off some of my underpeerforming inv trusts, and bought some more 3i earlier.

[chc15] 09/5/2023 11:08

Yes 18 soon, I may actually buy more here, as seems there is strong institutional buying going on for the share price to do this well.

[craftyale] 02/5/2023 09:28

18 pounds soon, what a great 3 yr chart

[craftyale] 15/4/2023 14:41

Holding firm.

[krutt] 14/4/2023 13:47

I have held this for years but took my profits today and very happy to do so. Hopefully holders will continue to see the price rise but i think it was a good time to cash in.

[chc15] 14/4/2023 11:34

Indeed, I used to take profits years ago on this, but stopped and now just leave it alone, reinvest the divs.

[craftyale] 13/4/2023 07:52

Happy Days

[craftyale] 11/4/2023 13:38

Looks like 1700p will be crossed.

[wad collector] 31/3/2023 14:46

Sold most at 1685. Been a good run, but this was supposed to be a medium risk investment and has gradually become higher risk (And higher reward too) .

[chc15] 28/3/2023 10:54

Some chunky director buys from the euro bosses, share price is holding up well.

[jerseyman1] 23/3/2023 11:34

Action is stunning, looks like it will continue for a while yet. Dividend could be substantial if accompanied by another gearing up which business can easily cope with. Timing of eventual exit crucial, must leave something on table for purchaser.

[chc15] 23/3/2023 10:02

Update sounds good, I'm currently watching the presentation live..Action still doing the biz!

[riverman77] 23/2/2023 12:05

Not too worried about the lack of diversification as I view this as largely a play on Action (rather than a private equity fund}. However, I do agree that the Action valuation is looking punchy - especially given the fall in the valuations of its peers, which makes it look very expensive in relative terms. High multiple perhaps justified when it was in its early growth stage, but the growth will have to slow before too long - multiples should generally fall as the business becomes more mature, but this doesn't seem to apply to Action.

In terms of an exit, they obviously won't look to sell Action now given current market conditions. I would imagine they get another 2 or 3 years growth under their belt and list when market conditions are more buoyant as they inevitably will be at some point - that's what private equity firms do, sell to suckers at the top of the market.

[jerseyman1] 23/2/2023 11:53

I agree to some extent, some element of de risking makes sense. However the strength of underlying performance in the portfolio will see the discount to NAV widen materially when Q4 results come out. Probably time for another refinancing of Action to fund another dividend payout. Not easy to see a full exit at as punchy a valuation as it sits on though. But....other exits continue to be at prices well ahead of holding value

[skyship] 23/2/2023 11:02

That was an excellent article in the IC. Recommends to sell 3I Group (iii) due to an over-valuation of Action Group which now accounts for 59% of their portfolio valuation.

Action has been a superb/remarkable investment for iii; but with that degree of portfolio distortion they really have to find an exit route for at least half of their commitment.

With iii standing at just a 1% NAV discount; they look like a one-way play for the time-being; especially after the recent 4-month 50% surge upwards.

One aspect not mentioned on the Action business model surely has to be their reliance on cheap goods from China. Any interruption of that gravy train will sorely expose Action sales.

IMO these now look to be a good short...

[wad collector] 20/2/2023 20:05

Big UT at the close today almost half a million shares.

[craftyale] 20/2/2023 08:25

Holding firm.