Half-yearly results 2009

RNS Number : 3837C

3i Group PLC

12 November 2009

 



12 November 2009

Half-year results for the six months to 30 September 2009

"With our shareholders' support, we have transformed our financial position. We remain cautious about the economy but confident in the strength of our portfolio and business model. 3i is ready for the upturn."

Michael Queen, Chief Executive

Commentary

• Net debt reduced from £1.9 billion at 31 March 2009 to £854 million at 30 September 2009

• Gearing reduced from 103% at 31 March 2009 to 31% at 30 September 2009

• Realisations exceeded investment by £317 million during the period, further strengthening the balance sheet

• 33% of the opening non-core portfolio by value realised and sales agreed on a further 16%
  during the period 

• Liquidity increased by £1.0 billion to £2.0 billion, providing greater capacity to invest in the upturn 

For the six months to 30 September		2009
Business activity
Investment		£190m
Realisations		£507m
Net divestment		£317m
Returns
Gross portfolio return		£316m
Gross portfolio return on opening portfolio value1		7.8%
Total return		£81m
Total return on opening shareholders' funds2		3.2%
Dividend per ordinary share		1.0p
Portfolio and assets under management
Own balance sheet		£3,780m
External funds		£3,445m
Total assets under management		£7,225m
Balance sheet
Net debt		£854m
Gearing		31%
Net asset value		£2,746m
Diluted net asset value per ordinary share		£2.86

1	Opening portfolio value is the weighted average of the opening portfolio value, less the opening portfolio value of 3i's share of Quoted Private Equity, plus the value of investments transferred from3i Quoted Private Equity plc to 3i Group plc.
2	Opening shareholders' funds is the weighted average of opening shareholders' funds and the equity value following the liquidation of 3i Quoted Private Equity plc and the nine for seven rights issue.

For further information, please contact:

Patrick Dunne, Group Communications Director 3i Group plc	Tel: [phone]
Rachel Richards Press Office	Tel: [phone]
Suzanne Bartch Maitland Consultancy	Tel: [phone]

For further information regarding the announcement of 3i's annual results to 30 September 2009, including a live videocast of the results presentation from 09:45am, please see www.3igroup.com. 

Notes to editors 

3i is a mid-market private equity business. We focus on buyouts, growth capital and infrastructure, investing across Europe, Asia and North America. Our competitive advantage comes from our international network and the strength and breadth of our relationships in business. These underpin the value that we deliver to our portfolio and to our shareholders.

3i is a mid-market private equity business. Our focus is on buyouts, growth capital and infrastructure, investing across Europe, Asia and North America.

Key financial data

		Six	Six	Six
		months	months	months
		to/as at 30	to/as at 30	to/as at 31
		September	September	March
		2009	2008	2009
Investment activity
Investment		£190m	£668m	£300m
Realisations		£507m	£597m	£711m
Net divestment/(investment)		£317m	£(71)m	£411m
Returns
Gross portfolio return		£316m	£(78)m	£(2,128)m
Gross portfolio return on opening portfolio value1		7.8%	(1.3)%	(35.4)%
Total return		£81m	£(182)m	£(1,968)m
Total return on opening shareholders' funds2		3.2%	(4.5)%	(48.5)%
Dividend per ordinary share		1.0p	3.8p3	-
Portfolio and assets under management
	Own balance sheet	£3,780m	£5,934m	£4,050m
	External funds	£3,445m	£4,019m	£3,969m
Total assets under management		£7,225m	£9,953m	£8,019m
Balance sheet
Net debt		£854m	£1,802m	£1,912m
Gearing		31%	47%	103%
Net asset value		£2,746m	£3,852m	£1,862m
Diluted net asset value per ordinary share		£2.86	£5.903	£2.794

1	Opening portfolio value is the weighted average of the opening portfolio value, less the opening portfolio value of 3i's share of Quoted Private Equity, plus the value of investments transferred from 3i Quoted Private Equity plc to 3i Group plc.
2	Opening shareholders' funds is the weighted average of opening shareholders' funds and the equity value following the liquidation of 3i Quoted Private Equity plc and the nine for seven rights issue.
3	Adjusted to reflect the bonus element from the rights issue and the 3i Quoted Private Equity plc transaction.
4	Adjusted to reflect the impact of the rights issue and issue of shares related to the acquisition of 3i Quoted Private Equity plc.

This half-yearly report may contain certain statements about the future outlook for 3i Group plc and its subsidiaries ("3i"). Although we believe our expectations are based on reasonable assumptions, any statements about the future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.

This report has been drawn up and presented for the purposes of complying with English law. Any liability arising out of or in connection with the half-yearly report for the six months to 30 September 2009 will be determined in accordance with English law. The half-yearly results for 2009 and 2008 are unaudited.

Total return 

The following table includes comparatives for the six months to 31 March 2009 to facilitate the understanding of trends in elements of the total return through the recent period of exceptional volatility.

		For the six	For the six	For the six	For the
		months to	months to	months to	year to
		30	30	31	31
		September	September	March	March
		2009	2008	2009	2009
		£m	£m	£m	£m
Realised profits/(losses) over value on disposal of investments		13	190	(127)	63
Unrealised profits/(losses) on revaluation of investments		227	(411)	(2,029)	(2,440)
Portfolio income
	Dividends	22	51	14	65
	Income from loans and receivables	54	89	19	108
	Fees receivable/(payable)	-	3	(5)	(2)
Gross portfolio return		316	(78)	(2,128)	(2,206)
Fees receivable from external funds		28	38	37	75
Carried interest
	Carried interest receivable from external funds	(2)	10	(13)	(3)
	Carried interest and performance fees payable	(2)	33	23	56
Operating expenses		(108)	(131)	(119)	(250)
Net portfolio return		232	(128)	(2,200)	(2,328)
Net interest payable		(55)	(42)	(44)	(86)
Movement in the fair value of derivatives		8	(2)	(36)	(38)
Net foreign exchange movements		(66)	11	304	315
Other finance income		-	-	3	3
Income taxes		(2)	(3)	(1)	(4)
Pension actuarial (loss)/gain		(36)	(18)	10	(8)
Revaluation of own use property		-	-	(4)	(4)
Total comprehensive income ("Total return")		81	(182)	(1,968)	(2,150)

Gross portfolio return by business line

Six months to 30 September

	Gross portfolio return		Return as a %
	2009	2008	2009	2008
	£m	£m	%	%
Buyouts	132	131	9%	7%
Growth Capital	159	(158)	9%	(7)%
Infrastructure	57	36	15%	7%
Non-core activities	(32)	(87)	(7)%	(8)%
Gross portfolio return	316	(78)	8%	(1)%

Unrealised profits/(losses) on revaluation of investments 

				For the six	For the six	For the six	For the
				months to	months to	months to	year to
				30	30	31	31
				September	September	March	March
				2009	2008	2009	2009
				£m	£m	£m	£m
Earnings and multiples based valuations
	Equity	- Earnings multiples	464		(194)	(218)	(412)
		- Earnings	(322)		78	(64)	14
	Loans	- Impairments (earnings basis)	2		(56)	(564)	(620)
	First time movements from cost		-		(30)	(519)	(549)
Market adjustment			(40)		-	(35)	(35)
Other bases
	Provisions		(27)		(192)	36	(156)
	Uplift to imminent sale		1		148	(288)	(140)
	Loans - Impairments (other basis)		52		-	(228)	(228)
Other movements on unquoted investments			(11)		(78)	(110)	(188)
Quoted portfolio			108		(87)	(39)	(126)
Total			227		(411)	(2,029)	(2,440)

Chairman's statement

I would like to start by thanking shareholders for their support for our £732 million rights issue, which - combined with other actions taken by the company - transformed our balance sheet during the first half of the year. 

The business generated strong cash flow through a cautious approach to investment, the acceleration of the sale of a number of non-core assets and a good overall level of realisations. Together with the rights issue, this enabled the Group to reduce net debt from £1.9 billion at 31 March 2009 to £854 million at 30 September 2009. Gearing fell sharply from 103% to 31% over the same period, and we have also taken action to extend the maturity of our outstanding debt.

A total return of £81 million for the six months to 30 September 2009 represented a 3.2% return on opening shareholders' funds (adjusted for the rights issue and the 3i Quoted Private Equity plc transaction). While the multiples used to value the portfolio have risen, lower portfolio company earnings during the past year have - as is usual at this stage in the cycle - had a dampening effect on valuations. However, both provisions and the need for further investment in portfolio companies were lower than anticipated. Moreover, despite the challenging conditions, a number of companies were able to increase their profitability.

In my statement in May, I said that the Board intended to pay a total dividend this year at least as high in aggregate as that paid in respect of the year ended 31 March 2009 (£24 million), and remained committed to the principle of paying an increasing dividend thereafter. The Board has therefore approved an interim dividend of 1p per share.

At the AGM, I reported that our Deputy Chairman, Oliver Stocken, would be retiring at the end of 2009. His wisdom and experience have been of enormous benefit to 3i for many years. Lord Smith of Kelvin also stepped down from the Board at the end of October in order to focus on his other responsibilities, notably the chairmanship of the 2014 Commonwealth Games Organising Committee. Oliver and Robert have made outstanding contributions to the Board, providing the perfect balance of support and challenge.

We were delighted to welcome two new non-executive Directors, John Allan and Alistair Cox, in September and October respectively. They both bring a wide range of international industrial expertise. John is Chairman of DSG International and is a member of the boards of Deutsche Lufthansa AG, ISS A/S and National Grid plc. Alistair is Chief Executive of Hays plc and was formerly CEO of Xansa plc. John has succeeded Robert Smith as Chairman of our Remuneration Committee.

Despite the strong rise in stock markets this year and signs of life in the mergers and acquisitions markets, many major economies remain fragile. We will therefore be taking a measured approach to investment, and continuing to focus on cost discipline.

3i has strong market positions in Asia, as well as Europe, and long experience in Growth Capital investing, as well as Buyouts and Infrastructure. These advantages position the company well to support growth in our portfolio companies, driving value for shareholders. 3i is therefore well placed to select the best private equity opportunities, in rapidly changing markets, through the next stage of the economic cycle.

Baroness Hogg

Chairman

11 November 2009

Chief Executive's statement

Our purpose:

to provide quoted access to private equity returns.

Our business:

3i is a mid-market private equity business. Our focus is on buyouts, growth capital and infrastructure, investing across Europe, Asia and North America.

Our strategy:

- to invest in high-return assets;

- to grow our assets and those we manage on behalf of third parties;

- to extend our international reach, directly and through investing in funds;

- to use our balance sheet and resources to develop existing and new business lines; and

- to continue to build our strong culture of operating as one company across business lines, geographies and sectors.

In our Annual report in May, I said that our main priorities were to ensure that 3i was financially robust and operationally agile to both withstand the downturn and to be ready to take advantage of investment opportunities when the economy recovered. I am pleased to report we have made good progress on each of these priorities and although the macroeconomic environment remains fragile, I believe that we are now well positioned to take advantage of an upturn.

"A transformed financial position"

3i ended the six months to 30 September with a transformed financial position. I would like to thank our shareholders for the support we received from them for the £732 million rights issue completed in June. This was a key element of our debt reduction strategy which, combined with measures taken to generate cash from within the Company, enabled a reduction in net debt from £1.9 billion at 31 March this year to £854 million at the end of September and an increase in the Group's liquidity from £1 billion to £2 billion in the same period. In addition, the maturity profile for our remaining debt was also improved.

A cautious approach to new investment, combined with the opportunity to realise a small number of core assets at good prices, meant that realisations exceeded investment by £317 million. Good progress was made on the sale of our non-core portfolios in the period, with 33% of the opening non-core portfolio value sold and the sale of a further 16% agreed. This significant reduction in non-core activity has enabled greater focus on our three core areas of Buyouts, Growth Capital and Infrastructure.

"Improved performance"

After what was one of the most challenging periods in the Group's history, 3i returned to profitability in the first six months to 30 September 2009. Gross portfolio returns of 9% for each of our Buyouts and Growth Capital businesses and 15% for Infrastructure were driven by unrealised value growth and helped to drive a positive total return of £81 million. This was despite an environment which remained highly challenging for portfolio company earnings and at a time when our conservative approach to valuations means that there is a lag in the recovery of portfolio values.

"Better placed to invest in the upturn"

Within the business, we have used this period when levels of investment activity have been lower as an opportunity to conduct a thorough review of our investment and asset management processes from origination to realisation. All transactions undertaken over the last few years have been evaluated, key lessons shared and actions have been taken to improve our investment processes. The appointment of Ian Nolan as Chief Investment Officer will continue to reinforce a more strategic, consistent and disciplined approach to investment decisions.

We have also continued to focus on cost effectiveness. Operating expenses were 18% lower than the equivalent period last year and we have made greater use of outsourcing to specialist providers.

3i has always worked with the boards of its portfolio companies to improve operating performance and strategic direction. We continue to develop our series of programmes to improve the functional performance of businesses in areas such as salesforce effectiveness, working capital management, efficient manufacturing and procurement. These programmes are being rolled out across the portfolio and are already delivering material benefits in terms of enhanced performance and therefore value of our investments.

We describe our approach as "Full Potential Investing" - ie we aim to maximise the value of every company we invest in through working closely with management in an "Active partnership" style.

Combined with our mid-market focus, market access and resources, I believe the changes that we have made to the business mean that we are better placed to invest in the upturn and create increased value for our shareholders.

"Still cautious about the economy"

I had hoped to be reporting clear evidence of an upturn - unfortunately, at this stage, we are only seeing clear signs of recovery in India and China. There are mixed signals from the US, and Europe remains challenged due to a combination of high government debt, low consumer demand and stressed banking sectors in many countries, all of which may create a tough environment for some time to come. Recent stock market rallies do not seem to reflect the real economy and, as a result, we remain cautious.

From previous cycles we do know that companies' working capital needs will start to rise as economies recover, creating a need for additional finance to support the rebuilding of stock and financing debtors as revenues return to growth. Given the banking sector's difficulties, we expect a significant increase in demand for growth capital and this presents a significant opportunity for 3i. In Asia, growth has resumed and, in India in particular, our Growth Capital and Infrastructure businesses are seeing a good flow of opportunities.

The financial sector as a whole continues to attract public and political scrutiny. We welcome this legitimate interest but caution against inappropriate regulation that may stifle the private equity industry, an industry which provides a financial catalyst to entrepreneurial success and job creation. Europe, in particular, needs to ensure that it is an attractive base for growth businesses given the competition from North and South America and Asia. I am indebted to my colleague Jonathan Russell's efforts as Chairman of the European Venture Capital Association for making these points very eloquently over the last year.

"Optimistic about 3i's prospects"

Looking forward, I am optimistic about 3i's prospects. While difficult economics create challenges, 3i is well placed to make good investments in Buyouts, Growth Capital and Infrastructure. Our model has been reviewed and refreshed and is ready for the new environment.

Our primary purpose remains to deliver strong returns to our shareholders and investors. Every decision we take will have this objective in mind. We will, however, continue to emphasise our traditional values. In a downturn, it is all too easy to forget the underlying core values that have made a business successful - 3i has not done this. We will continue to strive to be both a responsible company and a responsible investor in all that we do to build on our 65-year heritage and generate returns for the future.

Michael Queen

Chief Executive

11 November 2009

Business review

The key Group financial performance measures are:

	Six months to	Six months to	Six months to
	30 September	30 September	31 March
	2009	2008	2009
Total return	3.2%	(4.5)%	(48.5)%
Gross portfolio return	7.8%	(1.3)%	(35.4)%
Net operating expenses	£79m	£99m	£84m
Cost efficiency	2.0%	1.6%	1.4%
Gearing	31%	47%	103%
Net asset value growth1	£0.07	£(0.47)	£(5.17)

1 Growth in NAV per share is stated before dividends, other distributions to shareholders, the rights issue and the 
  3i QPEP transaction. The comparatives have not been restated for the rights issue and the 3i QPEP transaction.

Business activity

Group overview

As can be seen from Table 1, at £507 million (2008: £597 million), the level of realisations was substantially higher than the amount invested in the six months to 30 September 2009 of £190 million (2008: £668 million). This relatively low level of investment reflected the Group's caution over the economic environment and a lower requirement for investment in the portfolio than anticipated. 

Further progress was made in realising the Group's non-core portfolio, with 33% of the opening value of this segment of the portfolio realised in the period, rising to 49% including Venture Portfolio realisations agreed but not yet completed.

The market

Statistics from Dealogic's M&A review, published on 1 October 2009, show that the value of global mergers and acquisitions for the first nine months of calendar year 2009 was 35% lower than for the same period in 2008, the lowest level since 2004.  

Private equity activity has been very subdued for most of 2009. According to the Q3 2009 preliminary data released by unquote", private equity investment for the first half of 2009 in Europe at €8 billion, was only 15% of that in the same period in 2008. However, Q3 showed activity starting to pick up, with €10 billion of investment in the three months to 30 September 2009.

Table 1: Realisations and investments 
for the six months to

	30 September	30 September	31 March
	2009	2008	2009
	£m	£m	£m
Realisations	507	597	711
Investments	(190)	(668)	(300)
Net (investment)/divestment	317	(71)	411

Investment activity

Investment

3i adopted a selective approach to investment in the six months to 30 September 2009, with the portfolio being the main focus of investment activity. Consequently, gross investment in the period of £190 million (2008: £668 million) was low and no new companies were added to the portfolio.

The generally good health of the portfolio meant that only £47 million was required for equity cures or rescue situations (in 13 portfolio companies). As can be seen from Table 2, the balance was used to support portfolio development through acquisition or other means. Of the £190 million invested in the period, £94 million was invested in portfolio companies and the remainder primarily related to £92 million of capitalised interest.

Tables 3 and 4 illustrate the split of investment in the period by business line and geography. As can be seen from Table 3, at £15 million (2008: £29 million), follow-on investment in the non-core activities was minimal.

A further £117 million (2008: £512 million) was also invested on behalf of managed or advised funds, including £79 million for Buyouts funds and £38 million for 3i Infrastructure plc and the 3i India Infrastructure Fund.

Table 2: Further portfolio investment (£m)

for the six months to 30 September 2009 
(Total investment: £190 million)

	£m
Acquisition finance	9
Rescue/equity cure	47
Capitalised interest1	92
Drawdown on existing arrangements	25
Other	17

1 Includes PIK notes.

A Payment in Kind (PIK) note is a loan instrument whereby, at pre-agreed dates, interest accrued is capitalised and rolled into the value of the principal of the loan and is payable at the loan repayment date. This capitalised interest is included within the definition of gross investment.

Table 3: Investment by business line (£m)

for the six months to 30 September 2009 
(Total investment: £190 million)

	£m
Buyouts	111
Growth Capital	62
Infrastructure	2
Non-core activities	15

Table 4: Investment by geography (£m)

for the six months to 30 September 2009 
(Total investment: £190 million)

	£m
UK	104
Continental Europe	59
Asia	8
North America	18
Rest of World	1

Realisations

Despite a generally low level of mergers and acquisitions activity, realisations of £507 million were achieved in the period (2008: £597 million). Realisations from the non-core portfolio of £125 million represented 25% of the total (2008: 16%). £46 million was also realised from Growth Capital assets formerly held within the QPE business line. The disposal process of these non-core activities is now substantially complete. 

Realisations from the Venture Portfolio of £93 million included only £23 million from the sale of venture assets, announced in September 2009, and represents 42% of the opening Venture Portfolio value. This percentage increases to 73% if realisations that have been agreed as part of the £128 million sale are included. More detail is provided on this transaction in the Non-core activities section.

The largest realisation in the period was the sale of the Group's investment in Venture Production plc to Centrica plc for £145 million. Other quoted realisations amounted to £106 million.

Overall, realisations were achieved at just above their 31 March 2009 carrying value, generating a realised profit of £13 million, or 3% over the opening portfolio value. As can be seen from Table 5, Growth Capital generated the largest level of realisations at £275 million, 69% of which was represented by the Venture Production plc realisation and the realisation of investments transferred from 3i QPEP. 

Total realisations do not include the £110 million of cash received by the Group in respect of the acquisition of 3i QPEP, completed in April 2009.

Buyouts realisations activity was low in the period at £62 million, including £30 million from the partial disposal of quoted investment, Telecity plc, and £29 million relating to the disposal of investments held within the Debt Warehouse.

Table 6 shows the geographic split of realisations. The sales of non-core assets and the realisation of Venture Production plc meant that some 63% of realisations in the period were in the UK. Asian realisations of £78 million were notable and included Salamander Energy (£43 million).

A breakdown of realisations by type is shown in Table 7. Other realisations of £58 million include £50 million of share buybacks by existing portfolio management teams, the majority of which are from our non-core portfolio. The balance of £8 million relates to deferred consideration from investments.

Table 5: Realisations by business line (£m)

for the six months to 30 September 2009 
(Total realisations: £507 million)

	£m
Buyouts	62
Growth Capital	275
Infrastructure	45
Non-core activities	125

Table 6: Realisations by geography (£m)

for the six months to 30 September 2009 

(Total realisations: £507 million)

	£m
UK	318
Continental Europe	81
Asia	78
North America	27
Rest of World	3

Table 7: Realisations by type (£m)

for the six months to 30 September 2009 
(Total realisations: £507 million)

	£m
Trade sales	78
Secondaries	64
Sale of quoted investments1	251
Loan repayments	56
Other	58

1 Realisations of quoted investments include trade sales of £145 million.

Returns

Total return

The total return for the period of £81 million represents a 3.2% return over opening shareholders' funds. This was a substantial improvement on the previous six months to 31 March 2009 (£(1,968) million), as well as on the first half of the previous financial year (£(182) million) and was driven by a 7.8% positive gross portfolio return of £316 million (2008: £(78) million). The core business lines generated a gross portfolio return of 10% (2008: (0.2)%).

The key driver of this return was an unrealised value movement of £227 million, as the effect of the recovery in equity markets on the multiples used to value unquoted portfolio companies on an earnings basis was only partially offset by the impact of the tougher trading environment on the earnings used in these valuations.

Operating expenses, at £(108) million, were £23 million lower than for the same period last year, although portfolio income also reduced to £76 million (2008: £143 million). Finally, total return was reduced by an adverse currency movement of £66 million in the period and a pensions charge of £36 million (2008: £18 million charge).

Realised profits

Overall realised profits of £13 million (2008: £190 million) consisted of realised profits of £44 million from the core Buyouts, Growth Capital and Infrastructure business lines and a realised loss of £(31) million from the non-core activities. Realisations from the core portfolio were at an aggregate uplift over opening portfolio value of 13%, which includes a £28 million realised profit from the Debt Warehouse. 

The following table includes comparatives for the six months to 31 March 2009 to facilitate the understanding of trends in elements of the total return through the recent period of exceptional volatility.

Table 8: Total return 

		For the six	For the six	For the six	For the
		months to	months to	months to	year to
		30	30	31	31
		September	September	March	March
		2009	2008	2009	2009
		£m	£m	£m	£m
Realised profits/(losses) over value on disposal of investments		13	190	(127)	63
Unrealised profits/(losses) on revaluation of investments		227	(411)	(2,029)	(2,440)
Portfolio income
	Dividends	22	51	14	65
	Income from loans and receivables	54	89	19	108
	Fees receivable/(payable)	-	3	(5)	(2)
Gross portfolio return		316	(78)	(2,128)	(2,206)
Fees receivable from external funds		28	38	37	75
Carried interest
	Carried interest receivable from external funds	(2)	10	(13)	(3)
	Carried interest and performance fees payable	(2)	33	23	56
Operating expenses		(108)	(131)	(119)	(250)
Net portfolio return		232	(128)	(2,200)	(2,328)
Net interest payable		(55)	(42)	(44)	(86)
Movement in the fair value of derivatives		8	(2)	(36)	(38)
Net foreign exchange movements		(66)	11	304	315
Other finance income		-	-	3	3
Income taxes		(2)	(3)	(1)	(4)
Pension/actuarial (loss)/gain		(36)	(18)	10	(8)
Revaluation of own use property		-	-	(4)	(4)
Total comprehensive income ("Total return")		81	(182)	(1,968)	(2,150)

Unrealised value movements

The unrealised value movement was £227 million for the six months to 30 September 2009 (2008: £(411) million), which was a significant improvement over the six months to 31 March 2009 (£(2,029) million. There were two key drivers for that movement. The first was the recovery in equity markets in the period, which had a positive effect on the quoted portfolio and, more significantly, on the multiples used to value those unquoted portfolio companies valued on an earnings basis. The impact of multiple movements on the unquoted equity portfolio was £464 million. 

The other feature was the consequence of a much tougher trading environment for many of the Group's portfolio companies and the impact that this had on the earnings used to value those companies valued on an earnings basis. Lower earnings used to value this segment of the portfolio accounted for a value reduction of £322 million. 

Table 9 shows the proportion of portfolio value on a valuations basis as at 30 September 2009. 

Table 9: Proportion of portfolio value by valuation basis (%)

as at 30 September 2009

	2009
	%
Earnings	61
Imminent sale or IPO	4
Market adjustment	3
Net assets	1
Other	16
Price of recent investment	1
Quoted	14

Table 10: Unrealised profits/(losses) on revaluation of investments 

				For the six	For the six	For the six	For the
				months to	months to	months to	year to
				30	30	31	31
				September	September	March	March
				2009	2008	2009	2009
				£m	£m	£m	£m
Earnings and multiples based valuations
	Equity	- Earnings multiples	464		(194)	(218)	(412)
		- Earnings	(322)		78	(64)	14
	Loans	- Impairments (earnings basis)	2		(56)	(564)	(620)
	First time movements from cost		-		(30)	(519)	(549)
Market adjustment			(40)		-	(35)	(35)
Other bases
	Provisions		(27)		(192)	36	(156)
	Uplift to imminent sale		1		148	(288)	(140)
	Loans - Impairments (other basis)		52		-	(228)	(228)
Other movements on unquoted investments			(11)		(78)	(110)	(188)
Quoted portfolio			108		(87)	(39)	(126)
Total			227		(411)	(2,029)	(2,440)

Impact of earnings multiples movement Quoted markets rose strongly in the six months to 30 September 2009. The earnings multiples applied to value the unquoted equity portfolio are sourced from comparable quoted companies and market sector data. Due to rises in quoted markets, the increase in the weighted average multiple, post marketability discount, applied to those companies in the 3i portfolio valued on an earnings basis was 21%. This is generally below rises seen in market indices. However, as the valuation process is portfolio company specific, the portfolio mix may mean that our earnings multiple movements do not exactly match overall market movements. One difference is in 3i's higher performing, higher value assets, which tend to outperform the overall market and where the multiples applied have remained much more stable over the recent market volatility. 

Earnings movements When valuing a portfolio investment on an earnings basis, the earnings used are the latest management accounts data for the last 12 months, unless the data from the forecast is lower or we believe a lower figure from the latest audited accounts provides a more reliable picture of performance. Reflecting the general economic environment and the Group's desire to be conservative, the mix at 30 September 2009 was 22% audited accounts (2008: 48%), 39% management accounts (2008: 21%) and 39% forecast earnings (2008: 31%).

While in a number of portfolio companies we have seen improved earnings, there have been several companies where, due to the economic conditions, earnings have continued to deteriorate. This has resulted in a 6% fall in earnings on a weighted average basis in the period. Due to the conservative approach of taking forecast earnings where we expect further deterioration, the weighted average movement in earnings used for the valuation is a fall of 13%. 

The value reduction in the unquoted equity portfolio for the period relating to earnings was £322 million, with the majority of this being concentrated in a small number of companies in sectors and geographies particularly impacted by the economic downturn.

Impairments An impairment is recognised once the enterprise value (less senior debt) of an investment falls below the carrying value of 3i's loans. This was a significant feature in last year's value movement, with total impairments to 31 March 2009 of £(848) million. As a consequence of improved multiples and/or earnings in a number of the portfolio companies and the Debt Warehouse valuation, there was a small net reversal of £54 million in the six months to 30 September 2009.

Provisions Five investments were provided for in the period, with total provisions of £(27) million (2008: £(192) million).

Quoted portfolio The strong rise in quoted equity markets in the six months to September 2009 led to unrealised value growth of £108 million (2008: £(87) million) in the quoted portfolio. This included increases in the value of 3i Infrastructure plc (£49 million), Buyouts investment, Telecity plc (£35 million) and Growth Capital investment, Welspun (£11 million).

Portfolio income 

Portfolio income of £76 million (2008: £143 million), comprises interest receivable on loans of £54 million (2008: £89 million) and dividends of £22 million (2008: £51 million). Fees receivable, net of abort costs, were £nil (2008: £3 million). Interest income was not recognised on a number of loans where there was a provision or impairment at 31 March 2009. This has contributed to the reduction in interest receivable from last year. Due to the high level of capitalised interest, total income received as cash in the period was £30 million.

Gross portfolio return

Gross portfolio return during the period was £316 million, a 7.8% return over the opening portfolio value (first half 2009: £(78) million, second half 2009: £(2,128) million), which comprised a positive return of £348 million from our core business lines and a £32 million loss from our non-core activities.

All three core business lines generated a positive return in the period as each business line generated modest realised profits, benefited from an improvement in earnings multiples and generated a good level of portfolio income. Buyouts and Growth Capital each delivered gross portfolio returns of 9%. Infrastructure, at 15%, was higher as a consequence of the increase in the value of 3i Infrastructure plc.

The non-core activities generated a gross portfolio return of £(32) million, as realised losses within the Venture Portfolio were offset by returns from the SMI portfolio, which generated a 13% gross portfolio return.

Fees receivable from external funds

Fees receivable from external funds of £28 million (2008: £38 million) include £20 million (2008: £21 million) of fees from our managed Buyouts funds. The decrease principally arose as a result of a number of older Buyouts funds reaching their maturity. The 3i India Infrastructure Fund generated fees of £4 million (2008: £4 million).

The advisory and performance fee from 3i Infrastructure plc totalled £3 million (2008: £11 million). This reduction is mainly due to the performance fee received for the period to 30 September 2008, which included £6 million relating to the performance of 3i Infrastructure plc for the year ended 31 March 2008, as 

3i Infrastructure plc announced its results after 3i Group plc.

Net carried interest and performance fees payable

Carried interest payable aligns the incentives of 3i's investment staff and the management teams in 3i's portfolio with the interests of 3i's shareholders. Carried interest payable is accrued on the realised and unrealised profits generated, taking relevant performance hurdles into account. Net carried interest in the six months to 30 September 2009 was £4 million payable (2008: £(43) million net receivable), in line with increases in portfolio value.

Operating expenses

During the last 12 months, the Group undertook a number of steps to reduce operating expenses. This included a significant downsizing exercise in December 2008, the closure of the QPE business line and the accelerated disposal of non-core activities. As a consequence, headcount was reduced significantly from 731 at 30 September 2008, to 607 at 31 March 2009 and to 537 at 30 September 2009. This reduction in headcount, together with a greater focus on cost control across the business, has resulted in operating expenses being 18% lower than in the same period last year at £108 million (2008: £131 million). 

The Group's formal "cost efficiency" key performance indicator is measured as total operating expenses, less fees receivable, as a percentage of the opening portfolio value. As can be seen from Table 11, despite the significant reduction in operating expenses in the period, the fall in the opening portfolio value at 31 March 2009 resulted in a reduction in reported cost efficiency from last year.

Table 11: Cost efficiency 

for the six months to 30 September

	2009	2008
	£m	£m
Operating expenses	108	131
Fees receivable from external funds1	(29)	(32)
Net operating expenses	79	99
Net operating expenses/opening portfolio ("Cost efficiency")	2.0%	1.6%

1 Excluding performance fees from 3i Infrastructure plc.

Exchange movements

The Group has continued to use core currency borrowings to hedge the portfolio and has not provided any additional hedging through derivative contracts. As a consequence, 67% of the European and Nordic portfolios and 14% of the North American and Asian portfolios are now hedged. The foreign exchange movement of £(66) million in the period (2008: £11 million) was largely driven by the weakening of the US dollar against sterling.

Pension

An actuarial movement of £(36) million in the period relates to the Group's UK defined benefit pension scheme, which was impacted by a fall in the discount rate used to determine the present value of the scheme's future obligations under IAS 19. Rising equity markets in the period resulted in an increase in the value of the plan's assets. However, a fall in corporate bond yields has reduced the discount factor used to determine the present value of the scheme's obligations, leading to an increase in the deficit.

During the year to 31 March 2008, the Group agreed with the trustees of the UK defined benefit pension scheme to make additional contributions of £45 million per annum for the next two years and £20 million per annum of contributions for the following three years. During the period, these contributions totalled £23 million.

Portfolio and assets under management

Table 12: Assets under management (£m)

	As at	As at	As at
	30 September	30 September	31 March
	2009	2008	2009
	£m	£m	£m
3i direct portfolio	3,780	5,934	4,050
Managed funds	2,815	3,220	3,079
Advised funds	630	799	890
Total	7,225	9,953	8,019

The Group uses the latest published net asset value rather than the market price to measure external assets under management.

Assets under management include 3i's directly held portfolio, managed unlisted funds (some of which are co-investment funds) and advised and listed funds.

Total assets under management at 30 September 2009 of £7,225 million are broadly balanced between directly held (52%) and managed or advised assets (48%). Assets under management are lower than those at 31 March 2009 (£8,019 million), despite value growth in the portfolio held at the end of the period. This was chiefly the result of higher levels of realisations compared to new investment, the effect of the 3i QPEP transaction on advised funds and the closure of one older managed fund.

Portfolio assets directly owned by the Group

The movement in value of portfolio assets directly owned by the Group from £4,050 million at 31 March 2009 to £3,780 million at 30 September 2009, was due to a number of factors. The largest of these was the divestment of £494 million of opening portfolio value, including significant sales of non-core assets. The value of the portfolio held at the end of the period grew by £227 million but this was offset by currency movements of £(117) million and other movements, including the impact of the solvent liquidation of 3i QPEP (£(20) million). 

An analysis of portfolio value movement by business line and for the non-core activities is provided in Table 13. The increase of 6% in the value of the Buyouts portfolio was due to investments of £111 million, the low level of realisations in the period and an unrealised value movement of £53 million, which offset foreign exchange movements of £(13) million on the portfolio. 

Realisations of £270 million of the opening portfolio value and foreign exchange movements of £(78) million were the key reasons for a reduction in the value of the Growth Capital portfolio from £1,574 million at 
31 March 2009 to £1,551 million at 30 September 2009. These offset an increase of £151 million arising from the transfer of assets from 3i QPEP and value growth in the portfolio held at the end of the period. 

The Infrastructure business line portfolio at 30 September 2009 was stable at £365 million, only slightly down from the £371 million at 31 March 2009. The realisation of the Group's direct holding in AWG for £44 million and the £49 million rise in the value of the Group's 33% shareholding in 3i Infrastructure plc were the two most significant movements. 

Further detail on the composition of each business line's portfolio is provided in the business line reviews. 

Table 13: Portfolio value movement by business line 

		Opening						Closing
		portfolio						portfolio
		value	Impact of					value
		31 March	3i QPE		Opening value	Value		30 September
		2009	Liquidation	Investment	realised	movement	Other	2009
		£m	£m	£m	£m	£m	£m	£m
Core business lines
	Buyouts	1,467	-	111	(23)	53	(48)	1,560
	Growth Capital	1,574	151	62	(270)	132	(98)	1,551
	Infrastructure	371	-	2	(45)	47	(10)	365
		3,412	151	175	(338)	232	(156)	3,476
Non-core activities		638	(171)	15	(156)	(5)	(17)	304
Total		4,050	(20)	190	(494)	227	(173)	3,780

As can be seen from Tables 14 and 15, 3i continues to have a well diversified portfolio by geographic region and sector. The changes to the geographic and sector mix in the period were minimal and arose principally from the specific nature of realisations, but also from the fact that the value of the US Growth Capital portfolio increased from £153 million at 31 March 2009 to £328 million. 

The acceleration of the disposal of the non-core portfolio continued, with 33% of the opening portfolio value realised in the period for £125 million. This percentage would increase to 49% if further realisations in the Venture Portfolio, agreed in the period, were included. As a consequence of this and unrealised value movements of £(5) million, the value of the residual non-core portfolio held at 30 September 2009 was £304 million (£399 million including former QPE investments managed by the Growth Capital business line), compared with £638 million at 31 March 2009. The non-core portfolio represented 8% of the portfolio value directly owned by the Group at 30 September, compared with 16% at 31 March 2009.

Table 14: 3i direct portfolio value by geography

	As at	As at	As at
	30 September	30 September	31 March
	2009	2008	2009
	£m	£m	£m
Continental Europe	1,462	2,432	1,618
UK	1,504	2,269	1,719
Asia	468	658	491
North America	339	553	209
Rest of World	7	22	13
Total	3,780	5,934	4,050

Table 15: 3i direct portfolio value by sector

	As at	As at	As at
	30 September	30 September	31 March
	2009	2008	2009
	£m	£m	£m
Business Services	717	835	749
Consumer	312	614	327
Financial Services	352	452	265
General Industrial	837	1,386	764
Healthcare	637	657	545
Media	173	422	214
Oil, Gas and Power	98	304	253
Technology	289	629	391
	3,415	5,299	3,508
Infrastructure	365	530	371
Quoted Private Equity	-	105	171
Total	3,780	5,934	4,050

Assets managed or advised by 3i

Table 16 provides details for each of the funds managed or advised by 3i at 30 September 2009. New investment through Eurofunds III, IV and V was minimal in the period, with the result that Eurofund V, which was only 53% invested at the end of the period, continues to have significant capacity to invest. 3i Infrastructure plc announced its results for the half year to 30 September on 5 November 2009. 3i Infrastructure plc reported a total return of £16.3 million, or 1.8% on shareholders' equity, underpinned by the robust operational and financial performance of its portfolio. The 3i India Infrastructure Fund made no new investments in the period and with 42% of its capital invested at 30 September 2009, has substantial capacity for investment. 

The Group's managed funds at £2,815 million at 30 September were lower than the £3,079 million at 31 March 2009. This was primarily due to foreign exchange movements. In addition, one older legacy fund was wound up, resulting in a reduction of £80 million. 

Table 16: Managed and advised funds
as at 30 September 2009

				Invested	Realised1
				30 September	30 September
Fund	Final close date	Fund size	3i commitment	2009 %	2009 %
3i Eurofund III	July 1999	€1,990m	€995m	91%	184%
3i Eurofund IV	June 2004	€3,067m	€1,941m	94%	172%
3i Eurofund V	November 2006	€5,000m	€2,780m	53%	7%
3i Infrastructure plc	March 2007	£818m	£272m	80%	n/a
3i India Infrastructure Fund	March 2008	$1,195m	$250m	42%	-

1 Defined as proceeds as a percentage of original amount invested.

Group balance sheet

Table 17: Group balance sheet 

	As at	As at	As at
	30 September	30 September	31 March
	2009	2008	2009
Shareholders' funds	£2,746m	£3,852m	£1,862m
Net debt	£854m	£1,802m	£1,912m
Gearing	31%	47%	103%
Diluted net asset value per share	£2.86	£5.901	£2.792

1	Adjusted to reflect the bonus element from the rights issue and the 3i QPEP transaction.
2	Adjusted to reflect the impact of the rights issue and shares issued as part of the acquisition of the assets of 3i QPEP.

Borrowings

A number of measures to reduce net debt resulted in a significantly strengthened capital structure at 30 September 2009. These included the £732 million rights issue, which was completed in June 2009, and the solvent liquidation of 3i QPEP, which resulted in a net cash inflow of £110 million. 

The reduction in net debt from £1,912 million at 31 March 2009 to £854 million at 30 September 2009, combined with the increase in equity value to £2,746 million (31 March 2009: £1,862 million) following the rights issue and a positive total return led to substantially lower gearing at 30 September 2009 of 31% (31 March 2009: 103%, 30 September 2008: 47%).

During the period, gross debt fell from £2,656 million to £2,529 million. The main movement was the replacement of the Group's £150 million multicurrency bilateral facility with a new £100 million facility on 28 September 2009 and extending the maturity date through to 31 October 2012. Other significant movements include the close out of the remaining foreign exchange swap portfolio and the impact of sterling strengthening against the dollar and the euro.

In addition, the Group has agreed two further multicurrency revolving credit facilities. The first, a £275 million forward start facility, commencing on 20 September 2010 and maturing on 31 October 2012, and the second, since the period end, a five year £200 million bilateral facility, commenced on 4 November 2009 and maturing on 4 November 2014. 

As a result of the above, the repayment profile on £300 million of drawings under committed long-term facilities, previously due within one year from 30 September 2009, has been extended to three years and the long-term debt repayable within one year has been reduced from £456 million to £106 million.

Liquidity and cash

The combination of the completion of the rights issue, the disposal of non-core assets, a good level of realisations and the cautious approach to investment has resulted in liquidity increasing to £1,959 million from £1,020 million at 31 March 2009. This comprises cash and deposits of £1,673 million and undrawn facilities of £286 million.

Currency hedging

Until October 2008, the Group used a combination of cash settled currency swaps and core currency borrowings to hedge the portfolio. However, the cash volatility associated with this strategy and the significant weakening of sterling during the financial year to 31 March 2009 meant that this strategy was no longer appropriate. The Group therefore closed out the majority of its foreign exchange swap portfolio in the second half of the financial year to 31 March 2009.

As noted previously, the Group has maintained this policy of only using core currency borrowings to hedge the portfolio. As a consequence, 67% of the European and Nordic portfolios and 14% of the North American and Asian portfolios are now hedged.

Diluted NAV

The diluted NAV per ordinary share at 30 September 2009 was £2.86 (31 March 2009: £4.96). The liquidation of 3i QPEP, through the issue of new shares, reduced the net asset value by £0.23. The bonus element of the rights issue impacted NAV per share by £(1.79) and there was a further £0.15 dilution from the rights issue as well as an additional dilution of £0.02 relating to employee share-based awards granted in the period. The total return of £81 million increased the net asset value per share by £0.09.

Risks and uncertainties 

The main elements of 3i's risk management framework, together with a description of the principal inherent risks and uncertainties faced by the Group, are set out in the Risk section of the 3i Group Report and accounts 2009 and remained unchanged in the period. Improvements to the effectiveness of the risk management structure, which were outlined in the Report and accounts 2009, were implemented at the start of the current financial year. This half-yearly report makes reference to the evolution and management of specific key risks, and related results and outcomes, which should be viewed in the context of the risk management framework and principal inherent risk factors.

Business lines

Buyouts

Market environment

European mid-market buyout activity was subdued in the period. According to the Q2 2009 unquote" private equity barometer, the value of European buyout activity in the first six months of 2009, at €6 billion, was only 13% of the level in the prior year.

Fund raising for mid-market buyouts firms was also limited. However, a low investment rate, combined with the significant capital raised in previous periods, means that there is still a substantial excess of capital over the supply of investment opportunities. Competition, therefore, has kept pricing at higher levels than might have been anticipated.

Some signs of life in the M&A markets appeared towards the end of the period, with a number of high-profile major international transactions and, in Europe, a small number of buyout transactions.

Investment activity

Investment of £111 million (2008: £338 million) exceeded realisations of £62 million (2008: £326 million). The low level of investment was a result of the portfolio requiring less financial support than anticipated and no new investments in the period. Further investment in the portfolio comprised a mix of capitalised interest, equity cures and successful restructurings (£103 million, 2008: £112 million), as well as supporting portfolio development through acquisition or other means (£8 million). 

Following a strategy of aggressively exiting the portfolio in 2006-2008, there were no full exits in the period. Realisations of £62 million included the partial sale of Telecity, which generated proceeds of £30 million and £29 million from the Debt Warehouse.

Long-term performance

A more stable portfolio and low realisations activity has meant that there has been little change since 31 March 2009 to the performance by vintage year. As shown in Table 18, returns for 2002 to 2007 remain strong and, at this early stage, returns for the 2008 and 2009 vintages are negative.

Table 18: Long-term performance - Buyouts

New Investments made in	Total	Return	Value	IRR to 30	IRR to 30	IRR to 31
financial years to 31 March	investment	flow	remaining	September	September	March
Vintage year	£m	£m	£m	2009	2008	2009
2009	333	1	284	(8)%	n/a	n/a
2008	653	20	334	(26)%	6%	(30)%
2007	583	290	445	22%	38%	25%
2006	503	795	282	47%	50%	46%
2005	367	953	58	61%	64%	62%
2004	329	523	76	33%	36%	34%
2003	276	664	15	49%	49%	49%
2002	186	441	-	61%	61%	61%

Analysis excludes investment in Debt Warehouse

Returns

The gross portfolio return for the period of £132 million (2008: £131 million) represented a return of 8.9% (2008: 6.5%) over the opening portfolio value. As can been seen from Table 19, the largest element of this return at £53 million (2008: £(51) million) was unrealised value growth from the portfolio.

The effect of increased multiples on the valuation of those investments valued on an earnings basis was £211 million (2008: £(58) million). The effect of lower overall earnings used in valuing this segment of the portfolio was £(235) million (2008: £34 million).

The reduction in portfolio income in the period is principally due to the fall in interest through not recognising accrued interest, where provisions or impairments against loans were taken in the second half of the previous financial year. 

Realised profits of £39 million (2008: £115 million) principally relate to Telecity (£4 million) and the Debt Warehouse (£28 million).

Table 19: Returns from Buyouts (£m) 
six months to 30 September

	2009	2008
Realised profits over value on the disposal of investments	39	115
Unrealised profits/(losses) on the revaluation of investments	53	(51)
Portfolio income	40	67
Gross portfolio return	132	131
Fees receivable from external funds	20	21

Portfolio

The value of the portfolio at 30 September 2009 was stable at £1,560 million (31 March 2009: £1,467 million), reflecting low levels of investment and realisations activity.

As anticipated, it has been a challenging environment for the portfolio. At 30 September 2009, the significant majority of the portfolio was valued using earnings based on the lower of latest management accounts or forecast earnings. At the individual company level, there have been some good performances. We continue to take proactive steps to protect and grow earnings across the portfolio through our Active partnership programme.

At 30 September 2009, 60% of the portfolio based on cost was classified as healthy, compared to 67% of cost at 31 March 2009.

The average EBITDA multiple used to value investments valued on an earnings basis was 7.0x (8.3x pre marketability discount), a 13% increase from 6.2x used at 31 March 2009. This is after the typical 15% marketability discount applied to Buyouts investments.

The largest portfolio investment at 30 September 2009 was Enterprise (£135 million). 

Debt Warehouse

There was a £45 million positive movement in the value of 3i's investment in the Debt Warehouse in the six months to 30 September 2009 as a result of an improvement in the secondary loan market.

A breakdown of the assets under management for the Buyouts business line is provided in table 20.

Table 20: Buyouts - Assets under management

	2009	2008
as at 30 September	£m	£m
Own balance sheet	1,560	2,084
External funds	2,254	2,624
Total	3,814	4,708

Growth Capital

Market environment

The market for new investment was subdued, although there were early signs of an increase in new investment opportunities towards the end of the period. 

3i's own analysis suggests that the growth capital market in Europe, Asia and North America in the first nine months of 2009 was only approximately 25% of that of the previous year. However, since July, we have seen increasing confidence amongst the leaders of independent businesses and a lack of availability or attractiveness of debt funding. This has resulted in increased dealflow.

3i's approach of working in partnership with entrepreneurs and management teams to drive value growth through international expansion, with low reliance on leverage, is well suited to this environment. 3i continues to see the majority of deals in its target growth capital markets.

Realisations activity, which is driven by M&A activity, followed this pattern, with limited activity for much of the period and signs of increased levels of M&A in the final month.

Investment activity

Realisations of £275 million (2008: £169 million) were substantially in excess of investment of £62 million (2008: £279 million). The two largest of these realisations were Venture Production plc (£145 million) and Salamander Energy (£43 million).

Investment was targeted at supporting the growth of existing portfolio companies, with £28 million invested in nine different portfolio companies to support their expansion through acquisition or through organic development.

Long-term performance

Table 21 shows the long-term performance of Growth Capital since 2002. The improvement in returns for the 2008 vintage since 31 March 2009 is largely due to the realisations of Venture Production plc and CAIR. Returns for other vintages are largely unchanged from 31 March 2009.

Table 21: Long-term performance - Growth Capital

New Investments made in	Total	Return	Value	IRR to 30	IRR to 30	IRR to 31
Financial years to 31 March	investment	flow	remaining	September	September	March
Vintage year	£m	£m	£m	2009	2008	2009
2009	206	1	162	(19)%	n/a	n/a
2008	1,034	198	734	(5)%	5%	(16)%
2007	550	147	332	(6)%	6%	(2)%
2006	427	556	96	23%	34%	23%
2005	178	247	49	26%	28%	27%
2004	297	486	12	25%	26%	25%
2003	223	411	45	25%	25%	25%
2002	498	715	6	12%	13%	12%

Returns

The gross portfolio return for the period of £159 million (2008: £(158) million) represented a return of 9.3% (2008: (6.7)%) over the adjusted weighted average opening portfolio value. As can be seen from Table 22, the largest element of this was unrealised value growth from the portfolio, which at £132 million was a significant improvement on the £(237) million for the equivalent period last year and the £(792) million for the six months to 31 March 2009. This more than offset lower levels of realised profits and portfolio income.

The effect of increased multiples on the valuation of those investments valued on an earnings basis was £219 million (2008: £(119) million). The effect of lower earnings used in valuing this segment of the portfolio was £(64) million (2008: £28 million).

Table 22: Returns from Growth Capital (£m)

six months to 30 September

	2009	2008
Realised profits over value on the disposal of investments	5	40
Unrealised profits/(losses) on the revaluation of investments	132	(237)
Portfolio income	22	39
Gross portfolio return	159	(158)
Fees receivable from external funds	--	-

Portfolio

The opening and closing values of the portfolio at £1,574 million and £1,551 million reflect the low level of investment, good level of realisations, the increase in value, as well as the impact of the transfer of 3i QPEP investments.

Although 2009 to date has been an extremely challenging year, the Growth Capital portfolio has shown stable earnings performance. The health of the portfolio has also been robust. As at 30 September 2009, 78% was classified as healthy, based on cost (2008: 88%). The reduction from the 81% at 31 March 2009 was driven by the sale of large, healthy investments, rather than a material downgrade across the portfolio.

The average multiple used to value investments valued on an earnings basis was 7.3x, a 37% increase from the 5.3x used at 31 March 2009. This is after a typical 25% marketability discount is applied to reflect the Growth Capital business line's minority shareholding.

The largest Growth Capital investment is Quintiles (£148 million).

A breakdown of the assets under management for the Growth Capital business line is provided in table 23.

Table 23: Growth Capital - Assets under management

	2009	2008
as at 30 September	£m	£m
Own balance sheet	1,551	2,332
External funds	28	159
Total	1,579	2,491

Infrastructure

Market environment

With uncertainties on the sustainability of the economic recovery and persisting volatility in asset prices, conditions for new investment in infrastructure assets remain challenging. Financing is available for the right opportunities, albeit at less advantageous terms than before the economic downturn, but final-stage completion risk on individual transactions remains high. 

The environment for new investment will remain difficult, at least while asset prices are still adjusting to reflect uncertainty in both the quoted and unquoted markets. The competitive environment for infrastructure investment, however, remains more benign than before the economic downturn and the opportunity is attractive, driven, among other factors, by Budgetary constraints. 

Investment activity

The Infrastructure business line's investment is mainly made through 3i Infrastructure plc and the 3i India Infrastructure Fund.

Investment activity remained muted during the period. Investment in the six months to 30 September 2009 totalled £2 million (2008: £22 million). This sum was drawn down by the 3i India Infrastructure Fund for an additional investment in Adani Power Limited before its IPO. 

Realisations totalled £45 million during the six months to 30 September 2009 (2008: £8 million). This was attributable almost entirely to the disposal of a large part of 3i's holding in AWG to other shareholders of 3i Osprey LP, the vehicle through which 3i holds its shares. The proceeds for this transaction were broadly in line with the book value at 31 March 2009.

Performance

The Infrastructure business line has generated a gross portfolio return of £57 million for the six months to 30 September 2009 (2008: £36 million), representing a 15.4% return on opening value. This was driven principally by a strong increase in the mark-to-market valuation of 3i's holding in 3i Infrastructure plc (up £49 million in the period), which was only slightly offset by a £2 million decline in the value of the 3i India Infrastructure Fund. The decline in the Fund's valuation was driven by the dilution of its holding in Adani Power following its IPO earlier in the year.

Portfolio income of £10 million in the six months (2008: £23 million) was substantially attributable to dividend income from 3i Infrastructure plc. Portfolio income was significantly lower compared to the previous period, as last year's figure benefited strongly from a special dividend of £6 million paid by AWG, following the sale of one of its non-core assets. 

Fees receivable for management and advisory services to 3i Infrastructure plc and the 3i India Infrastructure Fund totalled £8 million for the six months to 30 September 2009, down from £16 million in the six months to 30 September 2008. 

This reduction was mainly due to the performance fee for the period to 30 September 2008 including £6 million relating to the performance of the company for the year ended 31 March 2008. This timing difference was due to 3i Infrastructure plc announcing its results after 3i Group plc at 31 March 2008. 

Table 24: Returns from Infrastructure (£m) 

six months to 30 September

	2009	2008
Realised profits over value on the disposal of investments	-	6
Unrealised profits on the revaluation of investments	47	7
Portfolio income	10	23
Gross portfolio return	57	36
Fees receivable from external funds	8	16

Portfolio

3i's infrastructure portfolio is principally accounted for by its 33.2% holding in 3i Infrastructure plc and its $250 million commitment to the 3i India Infrastructure Fund.

3i Infrastructure plc reported a total return of £16.3 million for the six months to 30 September 2009 (on an investment basis), representing a return of 1.8% on shareholders' equity. Of 3i's $250 million commitment to the 3i India Infrastructure Fund, $118 million had been drawn down for investment as at 30 September 2009. 

A breakdown of the assets under management for the Infrastructure business line is provided in Table 25.

Table 25: Infrastructure - Assets under management

	2009	2008
as at 30 September	£m	£m
Own balance sheet	365	530
External funds	1,163	947
Total	1,528	1,477

Non-core activities

Quoted Private Equity

In April 2009, the Group completed the acquisition of the assets of 3i QPEP. This resulted in cash of £110 million and the portfolio assets (£147 million) of the company being transferred to 3i Group.

Five investments were transferred to Growth Capital, of which two have subsequently been realised, generating proceeds of £46 million.

Venture Portfolio

The Venture Portfolio generated realisations of £93 million (2008: £73 million) in the six months to 30 September 2009 through a combination of individual asset, as well as portfolio sales. The sale of a large majority of the European Venture Portfolio to a consortium including Coller Capital, HarbourVest Partners and DFJ Esprit, which was signed on 13 September 2009, was the most significant realisation in the period. This sale will generate realisations of approximately £128 million. £23 million of this was received by 30 September 2009 and the majority of the balance is due to be received by 31 March 2010. Including this sale will result in 73% of the opening portfolio value being sold.

The high level of realisations activity in the period resulted in a reduction in the Venture Portfolio from 123 companies valued at £314 million at 31 March 2009 to 68 and £167 million at 30 September 2009. Removing the assets agreed for sale at 30 September 2009 would reduce the portfolio further to 51 companies valued at £61 million.

Investment activity in the period was minimal at £15 million (2008: £29 million) and related principally to draw downs of existing commitments. Gross portfolio return in the period was £(52) million, a (17)% return over the opening portfolio value (2008: £(64) million, (16)%). This negative return was driven by realised losses of £(38) million following the accelerated sale of the portfolio and a further £(13) million unrealised loss.

SMI

The SMI portfolio continued to generate a good level of realisations in the period. Realisations totalled £32 million, at an average uplift over the opening portfolio value of 28%. The most significant realisation was the sale of BE Wedge, a galvanising business, which generated proceeds of £8 million.

Gross portfolio return in the period of £20 million (2008: £14 million) represented a 13% return over the opening portfolio value (2008: 6%). Realised profits were £7 million, income was £5 million and unrealised profits were £8 million.

At 30 September 2009, there were 61 companies in the SMI portfolio (31 March 2009: 74), with a value of £137 million (31 March 2009: £153 million).

Consolidated statement of comprehensive income 

for the six months to 30 September 2009

							Six months to	Six months to			12 months to
							30 September	30 September			31 March
							2009	2008			2009
							(unaudited)	(unaudited)			(audited)
		Notes					£m	£m			£m
Realised profits over value on the disposal of investments		2					13	190			63
Unrealised profits/(losses) on the revaluation of investments		3					227	(411)			(2,440)
							240	(221)			(2,377)
Portfolio income
	Dividends					22		51				65
	Income from loans and receivables					54		89				108
	Fees receivable/(payable)					-		3				(2)
Gross portfolio return		1				316		(78)				(2,206)
Fees receivable from external funds		1				28		38				75
Carried interest
	Carried interest receivable from external funds		4		(2)			10				(3)
	Carried interest and performance fees payable		4		(2)			33				56
Operating expenses					(108)			(131)				(250)
Net portfolio return					232			(128)				(2,328)
Interest receivable			5		6			22				34
Interest payable			5		(61)			(64)				(120)
Movement in the fair value of derivatives			6		8			(2)				(38)
Exchange movements					(242)			32				505
Other finance income					-			-				3
Loss before tax					(57)			(140)				(1,944)
Income taxes					(2)			(3)				(4)
Loss for the period					(59)			(143)				(1,948)
Other comprehensive income
Exchange differences on translation of foreign operations					176			(21)				(190)
Revaluation of own-use property					-			-				(4)
Actuarial losses					(36)			(18)				(8)
Other comprehensive income for the period					140			(39)				(202)
Total comprehensive income for the period ("Total return")					81			(182)				(2,150)
Analysed in reserves as:
	Revenue					53		95				99
	Capital					(148)		(256)				(2,059)
	Translation reserve					176		(21)				(190)
						81		(182)				(2,150)
Earnings per share
	Basic (pence)			10	(7.1)				(23.4)1	(318.7) 1
	Diluted (pence)			10	(7.1)				(23.4)1	(318.7) 1

1 Restated to reflect the impact of the bonus elements of the rights issue and the acquisition of 3i QPEP.

The rates and amounts of dividends paid and proposed are shown in note 11.

  Consolidated statement of changes in equity

for the six months to 30 September 2009

		Six months to	Six months to	12 months to
		30 September	30 September	31 March
		2009	2008	2009
		(unaudited)	(unaudited)	(audited)
	Notes	£m	£m	£m
Total equity at start of period	9	1,862	4,057	4,057
Loss for the period	9	(59)	(143)	(1,948)
Exchange differences on translation of foreign operations	9	176	(21)	(190)
Revaluation of own-use property	9	-	-	(4)
Actuarial losses	9	(36)	(18)	(8)
Total comprehensive income for the period		81	(182)	(2,150)
Equity settled call option	9	-	5	5
Share-based payments	9	(2)	4	3
Ordinary dividends	11	-	(41)	(64)
Issues of ordinary shares	9	805	7	9
Own shares	9	-	2	2
Total equity at the end of the period		2,746	3,852	1,862

Consolidated balance sheet

as at 30 September 2009 

						30 September		30 September			31 March
						2009		2008			2009
						(unaudited)		(unaudited)			(audited)
		Notes				£m		£m			£m
Assets
Non-current assets
Investments
	Quoted equity investments					519		812			611
	Unquoted equity investments					1,822		3,204			1,970
	Loans and receivables					1,439		1,918			1,469
Investment portfolio			1			3,780		5,934			4,050
Carried interest receivable						46		62			44
Property, plant and equipment						20		29			22
Total non-current assets						3,846		6,025			4,116
Current assets
Other current assets						63		64			70
Derivative financial instruments						2		67			10
Deposits						384		48			59
Cash and cash equivalents						1,289		620			675
Total current assets						1,738		799			814
Total assets						5,584		6,824			4,930
Liabilities
Non-current liabilities
Carried interest payable							(45)	(79)		(51)
Loans and borrowings							(1,720)	(1,746)		(1,793)
B shares			7				(6)	(12)		(12)
Convertible bond							(395)	(379)		(384)
Subordinated liabilities							(7)	(8)		(7)
Retirement benefit deficit							(14)	(56)		(18)
Deferred income taxes							(2)	(2)		-
Provisions							(4)	(8)		(18)
Total non-current liabilities							(2,193)	(2,290)		(2,283)
Current liabilities
Trade and other payables						(211)		(197)	(255)
Carried interest payable						(21)		(83)	(61)
Loans and borrowings						(346)		(290)	(349)
Derivative financial instruments						(55)		(102)	(112)
Current income taxes						(2)		(4)	(3)
Provisions						(10)		(6)	(5)
Total current liabilities						(645)		(682)	(785)
Total liabilities						(2,838)		(2,972)	(3,068)
Net assets						2,746		3,852	1,862
Equity
Issued capital				8		717		284	284
Share premium				9		777		403	405
Capital redemption reserve				9		42		42	42
Share-based payment reserve				9		18		23	20
Translation reserve				9		(3)		(10)	(179)
Capital reserve				9		818		2,769	968
Revenue reserve				9		447		413	394
Other reserves				9		5		5	5
Own shares				9		(75)		(77)	(77)
Total equity						2,746		3,852	1,862

Consolidated cash flow statement

for the six months to 30 September 2009

		Six months to	Six months to	12 months to
		30 September	30 September	31 March
		2009	2008	2009
		(unaudited)	(unaudited)	(audited)
		£m	£m	£m
Cash flow from operating activities
Purchase of investments	(94)		(550)	(827)
Proceeds from investments	477		597	1,308
Interest received	9		15	23
Dividends received	22		51	65
Portfolio fees (paid)/received	(1)		8	-
Fees received from external funds	24		24	63
Carried interest received	-		23	43
Carried interest paid	(46)		(53)	(103)
Operating expenses	(127)		(202)	(316)
Income taxes paid	(1)		(3)	(5)
Net cash flow from operations	263		(90)	251
Cash flow from financing activities
Net proceeds from liquidation of 3i QPEP	110		-	-
Proceeds from the nine for seven rights issue	732		-	-
Fees paid for the nine for seven rights issue	(33)		-	-
Proceeds from issues of share capital	16		7	9
Disposal of own shares	-		2	2
Repurchase of B shares	(6)		(9)	(9)
Dividend paid	-		(41)	(64)
Interest received	6		22	34
Interest paid	(56)		(24)	(80)
Premium on call options acquired	-		(78)	(78)
Premium on call options sold	-		29	29
Proceeds from long-term borrowings	-		685	686
Repayment of long-term borrowings	(51)		(465)	(585)
Net cash flow from short-term borrowings	3		(164)	(46)
Net cash flow from derivatives	(35)		-	(249)
Net cash flow from deposits	(327)		(4)	(15)
Net cash flow from financing activities	359		(40)	(366)
Cash flow from investing activities
Purchases of property, plant and equipment	-		(1)		(4)
Sales of property, plant and equipment	-		-		3
Net cash flow from investing activities	-		(1)		(1)
Change in cash and cash equivalents	622		(131)		(116)
Cash and cash equivalents at the beginning of the period	675		752		752
Effect of exchange rate fluctuations	(8)		(1)		39
Cash and cash equivalents at the end of the period	1,289		620		675

Notes to the accounts

1 Segmental analysis

					Smaller
				Quoted	Minority
		Growth	Infra-	Private	Invest-	Venture
	Buyouts	Capital	structure	Equity	ments	Portfolio	Total
6 months to 30 September 2009 (unaudited)	£m	£m	£m	£m	£m	£m	£m
Gross portfolio return1
Realised profits/(losses) over value on the disposal of investments	39	5	-	-	7	(38)	13
Unrealised profits/(losses) on the revaluation of investments	53	132	47	-	8	(13)	227
Portfolio income	40	22	10	-	5	(1)	76
	132	159	57	-	20	(52)	316
Fees receivable from external funds	20	-	8	-	-	-	28
Net (investment)/divestment
Realisations	62	275	45	-	32	93	507
Investment	(111)	(62)	(2)	-	-	(15)	(190)
	(49)	213	43	-	32	78	317
Balance sheet
Value of investment portfolio at end of period	1,560	1,551	365	-	137	167	3,780

					Smaller
				Quoted	Minority
		Growth	Infra-	Private	Invest-	Venture
	Buyouts	Capital	structure	Equity	ments	Portfolio	Total
6 months to 30 September 2008 (unaudited)	£m	£m	£m	£m	£m	£m	£m
Gross portfolio return1
Realised profits over value on the disposal of investments	115	40	6	-	4	25	190
Unrealised (losses)/profits on the revaluation of investments	(51)	(237)	7	(37)	2	(95)	(411)
Portfolio income	67	39	23	-	8	6	143
	131	(158)	36	(37)	14	(64)	(78)
Fees receivable from external funds	21	-	16	1	-	-	38
Net (investment)/divestment
Realisations	326	169	8	-	21	73	597
Investment	(338)	(279)	(22)	-	-	(29)	(668)
	(12)	(110)	(14)	-	21	44	(71)
Balance sheet
Value of investment portfolio at end of period	2,084	2,332	530	105	228	655	5,934

					Smaller
				Quoted	Minority
		Growth	Infra-	Private	Invest-	Venture
	Buyouts	Capital	structure	Equity	ments	Capital	Total
12 months to 31 March 2009 (audited)	£m	£m	£m	£m	£m	£m	£m
Gross portfolio return1
Realised profits/(losses) over value on the disposal of investments	255	(66)	(20)	-	4	(110)	63
Unrealised (losses)/profits on the revaluation of investments	(995)	(1,029)	(62)	26	(68)	(312)	(2,440)
Portfolio income	62	60	32	-	11	6	171
	(678)	(1,035)	(50)	26	(53)	(416)	(2,206)
Fees receivable from external funds	45	1	26	3	-	-	75
Net (investment)/divestment
Realisations	494	461	117	-	27	209	1,308
Investment	(519)	(343)	(50)	(3)	-	(53)	(968)
	(25)	118	67	(3)	27	156	340
Balance sheet
Value of investment portfolio at end of year	1,467	1,574	371	171	153	314	4,050

1 The segmental profit or loss reported in accordance with IFRS 8: Operating Segments, is defined as gross portfolio return.

2 Realised profits/(losses) over value on the disposal of investments

			6 months to
	6 months to	6 months to	September	6 months to
	September	September	2009	September
	2009	2009	Loans and	2009
	Unquoted equity	Quoted equity	receivables	Total
	(unaudited)	(unaudited)	(unaudited)1	(unaudited)
	£m	£m	£m	£m
Net proceeds	139	175	193	507
Valuation of disposed investments	(147)	(152)	(190)	(489)
Investments written off	(3)	-	(2)	(5)
	(11)	23	1	13

			6 months to
	6 months to	6 months to	September	6 months to
	September	September	2008	September
	2008	2008	Loans and	2008
	Unquoted equity	Quoted equity	receivables	Total
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
	£m	£m	£m	£m
Net proceeds	507	41	49	597
Valuation of disposed investments	(329)	(31)	(45)	(405)
Investments written off	-	-	(2)	(2)
	178	10	2	190

			12 months to
	12 months to	12 months to	March 2009	12 months to
	March 2009	March 2009	Loans and	March 2009
	Unquoted equity	Quoted equity	receivables	Total
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
	£m	£m	£m	£m
Net proceeds	1,023	172	113	1,308
Valuation of disposed investments	(896)	(214)	(117)	(1,227)
Investments written off	(14)	-	(4)	(18)
	113	(42)	(8)	63

1 Loans and receivables include net proceeds of £29 million (2008: nil) and realised profits of £28 million (2008: nil) from the variable funding notes relating to the Debt Warehouse.

3 Unrealised profits/(losses) on the revaluation of investments

			6 months to
	6 months to	6 months to	September	6 months to
	September	September	2009	September
	2009	2009	Loans and	2009
	Unquoted equity	Quoted equity	receivables	Total
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
	£m	£m	£m	£m
Movement in the fair value of equity	119	108	-	227
Provisions, loan impairments and other movements1	(24)	-	24	-
	95	108	24	227

			6 months to
	6 months to	6 months to	September	6 months to
	September	September	2008	September
	2008	2008	Loans and	2008
	Unquoted equity	Quoted equity	receivables	Total
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
	£m	£m	£m	£m
Movement in the fair value of equity	(52)	(87)	-	(139)
Provisions, loan impairments and other movements1	(76)	-	(196)	(272)
	(128)	(87)	(196)	(411)

			12 months to
	12 months to	12 months to	March 2009	12 months to
	March 2009	March 2009	Loans and	March 2009
	Unquoted equity	Quoted equity	receivables	Total
	(audited)	(audited)	(audited)	(audited)
	£m	£m	£m	£m
Movement in the fair value of equity	(1,323)	(126)	-	(1,449)
Provisions, loan impairments and other movements1	(110)	-	(881)	(991)
	(1,433)	(126)	(881)	(2,440)

1 Included within loan impairments is a £45 million value increase for variable funding notes relating to the Debt Warehouse 
  (September 2008: nil, March 2009: £112 million decrease).

Provisions have been recognised only on investments where it is considered there is a 50% risk of failure. All other equity movements are included within movement in the fair value of equity.

4 Carried interest

	6 months	6 months	12 months to
	to 30 September	to 30 September	31 March
	2009	2008	2009
	(unaudited)	(unaudited)1	(audited) 1
	£m	£m	£m
Carried interest receivable from external funds	(2)	10	(3)
Carried interest and performance fees payable	(2)	33	56
	(4)	43	53

Carried interest receivable represents the Group's share of profits from external funds. Each fund is reviewed at the balance sheet date and income is accrued based on fund profits in excess of the performance conditions within the fund, taking into account cash already returned to fund investors and the fair value of assets remaining in the fund.

Carried interest payable represents the amount payable to executives from the Group's carried interest schemes. As with carried interest receivable, each scheme is separately reviewed at the balance sheet date, and an accrual made equal to the executives' share of profits in excess of the performance conditions in place in the scheme.

5 Interest payable

	6 months	6 months	12 months to
	to 30 September	to 30 September	31 March
	2009	2008	2009
	(unaudited)	(unaudited)	(audited)
	£m	£m	£m
Interest receivable
Interest on bank deposits	6	22	34
	6	22	34
Interest payable
Interest on loans and borrowings	(40)	(39)	(84)
Interest on convertible bond	(8)	(9)	(17)
Amortisation of convertible bond	(10)	(14)	(20)
Subordinated borrowings1	(2)	(1)	2
Net finance expense on pension plan2	(1)	(1)	(1)
	(61)	(64)	(120)
Net interest payable	(55)	(42)	(86)

1	Includes the fair value movement on the underlying loan.
2	£14 million of interest receivable relating to the return on the UK defined benefit pension scheme plan assets and the £15 million of interest payable on the pension plan have been reclassified to net finance expense on pension plan for September 2008.

6 Movement in the fair value of derivatives

	6 months	6 months	12 months to
	to 30 September	to 30 September	31 March
	2009	2008	2009
	(unaudited)	(unaudited)	(audited)
	£m	£m	£m
Forward foreign exchange contracts and currency swaps	-	-	4
Interest rate swaps	7	4	(46)
Derivative element of convertible bond	1	6	58
Call options	-	(12)	(54)
	8	(2)	(38)

7 B shares

	6 months	6 months	12 months to
	to 30 September	to 30 September	31 March
	2009	2008	2009
	(unaudited)	(unaudited)	(audited)
	£m	£m	£m
Opening balance	12	21	21
Issued in period	-	-	-
Repurchased and cancelled	(6)	(9)	(9)
Closing balance	6	12	12

On 10 August 2009 the Company repurchased and subsequently cancelled 4,670,975 B shares.

8 Issued capital

	30 September	30 September	30 September	30 September	31 March	31 March
	2009	2009	2008	2008	2009	2009
	(unaudited)	(unaudited)	(unaudited)	(unaudited)	(audited)	(audited)
Authorised	Number	£m	Number	£m	Number	£m
Ordinary shares of 73 19/22p	1,102,899,402	815	555,076,720	410	555,076,720	410
B shares of 1p	660,000,000	7	660,000,000	7	660,000,000	7
Unclassified shares of 10p	1,000,000	0.1	1,000,000	0.1	1,000,000	0.1

	6 months to	6 months to	6 months to	6 months to	12 months	12 months
	30 September	30 September	30 September	30 September	to 31 March	to 31 March
	2009	2009	2008	2008	2009	2009
	(unaudited)	(unaudited)	(unaudited)	(unaudited)	(audited)	(audited)
Issued and fully paid	Number	£m	Number	£m	Number	£m
Ordinary shares of 73 19/22p
Opening balance	383,970,880	284	382,741,094	283	382,741,094	283
Issued under employee share plans	6,569,797	5	1,007,544	1	1,229,786	1
Nine for seven rights issue	542,060,391	400
Issued for acquisition of assets of 3i Quoted Private Equity plc	37,604,945	28
Closing balance	970,206,013	717	383,748,638	284	383,970,880	284

During the period 1 April 2009 to 30 September 2009, no share options were exercised.

  9 Equity

				Capital	Share-based
		Share	Share	redemption	payment	Translation
		Capital	Premium	reserve	reserve	reserve
		(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)
6 months to 30 September 2009		£m	£m	£m	£m	£m
Opening balance		284	405	42	20	(179)
Profit for the period
Exchange differences on translation of
	foreign operations					176
Actuarial losses
Total comprehensive income for the period		-	-	-	-	176
Share-based payments					(2)
Release on exercise/forfeiture of share options
Issue of ordinary shares		433	372
Closing balance		717	777	42	18	(3)

		Capital	Revenue	Other1
		reserve	reserve	reserves	Own shares	Total equity
		(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)
6 months to 30 September 2009		£m	£m	£m	£m	£m
Opening balance		968	394	5	(77)	1,862
Profit for the period		(112)	53			(59)
Exchange differences on translation of
	foreign operations					176
Actuarial losses		(36)				(36)
Total comprehensive income for the period		(148)	53	-	-	81
Share-based payments						(2)
Release on exercise/forfeiture of share options		(2)			2	-
Issue of ordinary shares						805
Closing balance		818	447	5	(75)	2,746

On 12 June 3i Group plc raised £699 million net of £33 million of expenses by way of a rights issue.

				Capital	Share-based
		Share	Share	redemption	payment	Translation
		Capital	Premium	reserve	reserve	reserve
		(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)
6 months to 30 September 2008		£m	£m	£m	£m	£m
Opening balance		283	397	42	21	11
Profit for the period
Exchange differences on translation of
	foreign operations					(21)
Actuarial losses
Total comprehensive income for the period		-	-	-	-	(21)
Equity settled call option
Share-based payments					4
Release on exercise/forfeiture of share options					(2)
Ordinary dividends
Issue of ordinary shares		1	6
Own shares
Closing balance		284	403	42	23	(10)

		Capital	Revenue	Other1
		reserve	reserve	reserves	Own shares	Total equity
		(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)
6 months to 30 September 2008		£m	£m	£m	£m	£m
Opening balance		3,026	359	-	(82)	4,057
Profit for the period		(238)	95			(143)
Exchange differences on translation of
	foreign operations					(21)
Actuarial losses		(18)				(18)
Total comprehensive income for the period		(256)	95	-	-	(182)
Equity settled call option				5		5
Share-based payments						4
Release on exercise/forfeiture of share options		(1)			3	-
Ordinary dividends			(41)			(41)
Issue of ordinary shares						7
Own shares					2	2
Closing balance		2,769	413	5	(77)	3,852

				Capital	Share-based
		Share	Share	redemption	payment	Translation
		Capital	Premium	reserve	reserve	reserve
		(audited)	(audited)	(audited)	(audited)	(audited)
Year to 31 March 2009		£m	£m	£m	£m	£m
Opening balance		283	397	42	21	11
Profit for the period
Exchange differences on translation of
	foreign operations					(190)
Revaluation of own-use property
Actuarial losses
Total comprehensive income for the period		-	-	-	-	(190)
Equity settled call option
Share-based payments					3
Release on exercise/forfeiture of share options					(4)
Ordinary dividends
Issue of ordinary shares		1	8
Own shares
Closing balance		284	405	42	20	(179)

		Capital	Revenue	Other1
		reserve	reserve	reserves	Own shares	Total equity
		(audited)	(audited)	(audited)	(audited)	(audited)
Year to 31 March 2009		£m	£m	£m	£m	£m
Opening balance		3,026	359	-	(82)	4,057
Profit for the period		(2,047)	99			(1,948)
Exchange differences on translation of
	foreign operations					(190)
Revaluation of own-use property		(4)				(4)
Actuarial losses		(8)				(8)
Total comprehensive income for the period		(2,059)	99	-	-	(2,150)
Equity settled call option				5		5
Share-based payments						3
Release on exercise/forfeiture of share options		1			3	-
Ordinary dividends			(64)			(64)
Issue of ordinary shares						9
Own shares					2	2
Closing balance		968	394	5	(77)	1,862

1

Other reserves include the cost of the option relating to the call spread overlay set up as part of the £430 million convertible bond. This equity settled element of the call spread overlay has a strike price of £9.35 and 7,156,828 exercisable shares as a result of the rights issue (prior to rights issue had a strike price of £14.09 and 4,749,031 exercisable shares).

10 Per share information

On 28 April, 3i Group plc acquired the assets of 3i Quoted Private Equity plc (3i QPEP) through a solvent liquidation of the company. The Group paid 50p in cash and 0.1706 of new 3i Group shares for each 3i QPEP share. This resulted in 37.6 million shares being issued. The earnings per share comparative has been adjusted by a rate of 0.98, being the ratio between the theoretical ex-transaction price and the closing share price prior to the transaction.

Through the rights issue on 12 June, 3i Group plc issued 542 million new ordinary shares at 135p per new ordinary share on the basis of nine new ordinary shares for every seven ordinary shares held. Prior period comparatives for EPS have been adjusted by a factor of 0.6227 to reflect the bonus element inherent in the rights issue. The factor is calculated based on the pre-issue price of 410p, the closing price on the last day the shares traded cum-rights.  The NAV per share comparatives have been restated by adjusting the comparative NAV by the net assets and the number of shares relating to the 3i QPEP transaction, by £90 million and 37.6 million respectively. The adjustment factor of 0.6227 has then been applied to this adjusted NAV per share to derive the restated figure.

The earnings and net assets per share attributable to the equity shareholders of the Company are based on the following data:

	6 months	6 months	12 months to
	to 30 September	to 30 September	31 March
	2009	2008	2009
	(unaudited)	(unaudited)1	(audited)1
Earnings per share (pence)
Basic	(7.1)	(23.4)	(318.7)
Diluted	(7.1)	(23.4)	(318.7)
Earnings (£m)
Loss for the period attributable to equity holders of  the Company	(59)	(143)	(1,948)
Effect of dilutive ordinary shares	-	-	-
	(59)	(143)	(1,948)

		6 months	6 months	12 months to
		to 30 September	to 30 September	31 March
		2009	2008	2009
		(unaudited)	(unaudited)	(audited)
		Number	Number	Number
Weighted average number of shares in issue
Ordinary shares		850,771,252	383,162,777	383,495,547
Own shares		(16,208,452)	(10,623,552)	(10,465,956)
		834,562,800	372,539,225	373,029,591
Impact of rights issue bonus element and 3i QPEP bonus element			237,926,036	238,239,213
Effect of dilutive potential ordinary shares
	Share options2	-	-	-
	Convertible bond	-	-	-
Diluted shares		834,562,800	610,465,261	611,268,804

1 Restated to reflect the impact of the bonus element of the rights issue and the solvent liquidation of 3i QPEP. The pre-rights issue net assets used to calculate the NAV per share comparatives include £90 million relating to the 37.6 million shares issued following the 3i QPEP transaction.

2 The potential effect of share options is excluded from the dilution calculation for the period, as the impact is anti-dilutive.

		30 September	30 September	31 March
		2009	2008	2009
		(unaudited)	(unaudited)1	(audited)1
Net assets per share (pence)
Basic		288	597	296
Diluted		286	590	294
Net assets (£m)
Net assets attributable to equity holders of the Company	2,746		3,852	1,862

		30 September	30 September	31 March
		2009	2008	2009
		(unaudited)	(unaudited)	(audited)
		Number	Number	Number
Number of shares in issue
Ordinary shares		970,206,013	383,748,638	383,970,880
Own shares		(15,832,669)	(10,413,397)	(10,259,767)
		954,373,344	373,335,241	373,711,113
Impact of rights issue and 3i QPEP bonus			286,593,604	286,821,345
		954,373,344	659,928,845	660,532,458
Effect of dilutive potential ordinary shares
	Share options	6,073,695	4,731,712	1,399,354
Impact of rights issue and 3i QPEP bonus			3,021,957	893,712
Diluted shares		960,447,039	667,682,514	662,825,524

1 Restated to reflect the impact of the bonus element of the rights issue and the solvent liquidation of 3i QPEP. The pre-rights issue net assets used to calculate the NAV per share comparatives include £90 million relating to the 37.6 million shares issued following the 3i QPEP transaction.

NAV per share reconciliation adjusted for share issues

The nine for seven rights issue completed on 12 June and the acquisition of the assets of 3i QPEP through the issue of 37.6 million new shares has resulted in the opening NAV per share not being directly comparable with the closing NAV per share. The following table illustrates the impact of these share issues on the opening NAV per share.

			Basic
			NAV per
	Net assets	Number	share impact
Group basic NAV per share	£m	of shares	pence
31 March 2009 reported position	1,862	373,711,113	4.98
Impact of 3i QPEP acquisition	90	37,604,945	(0.23)
	1,952	411,316,058	4.75
Impact of nine for seven rights issue4	699	536,210,3361	(1.94)
31 March 2009 adjusted for share issues	2,651	947,526,394	2.81
Other shares in period	14	6,846,9502	(0.02)
	2,665	954,373,344	2.79
Total comprehensive income in period	81	954,373,344	0.09
	2,746	954,373,344	2.88

			Diluted
			NAV per
	Net assets	Number	share impact
Group diluted NAV per share	£m	of shares	pence
31 March 2009 reported position	1,862	375,110,467	4.96
Impact of 3i QPEP acquisition	90	37,604,945	(0.23)
	1,952	412,715,412	4.73
Impact of nine for seven rights issue4	699	536,210,3361	(1.94)
31 March 2009 adjusted for share issues	2,651	948,925,748	2.79
Other shares issued/increase in dilutive shares in period	14	11,521,2913	(0.02)
	2,665	960,447,039	2.77
Total comprehensive income in period	81	960,447,039	0.09
	2,746	960,447,039	2.86

1	The number of shares included within the impact of the nine for seven rights issue includes 542,060,391 ordinary shares issued less 5,850,055 ordinary shares issued to the 3i Group Employee Trust as part of the rights issue, which are included in our own shares and deducted from the number of ordinary shares issued when calculating basic and diluted NAV per share.
2	Other shares relate to employee share incentive plans.
3	Other shares in diluted NAV per share include (2) above and additional dilutive share options.
4	Net proceeds of the nine for seven rights issue were £699 million, representing £732 million gross proceeds, less £33 million of cost.

11 Dividends

		6 months to		6 months to		12 months
		30 September	6 months to	30 September	6 months to	to 31 March	12 months
		2009	30 September	2008	30 September	2009	to 31 March
		(unaudited)	2009	(unaudited)	2008	(audited)	2009
		pence	(unaudited)	pence	(unaudited)	pence	(audited)
		per share	£m	per share1	£m	per share1	£m
Declared and paid during the period
Ordinary shares
	Final dividend	-	-	6.7	41	6.7	41
	Interim dividend	-	-	-	-	3.8	23
		-	-	6.7	41	10.5	64
Proposed dividend		1.0	10	3.8	24	-	-

1 Restated to reflect impact of the bonus element of rights issue and solvent liquidation of 3i QPEP.

12 Contingent liabilities

	30 September	30 September	31 March
	2009	2008	2009
	(unaudited)	(unaudited)	(audited)
	£m	£m	£m
Contingent liabilities relating to guarantees available to third parties in respect of investee companies	2	8	6

At 30 September 2009, there was no material litigation outstanding against the Group.

13 Related parties

The Group has various related parties stemming from relationships with limited partnerships managed by the Group, its investment portfolio, its advisory arrangements, and its key management personnel.

Limited partnerships

The Group manages a number of external funds which invest through limited partnerships. Group companies act as the general partners of these limited partnerships and exert significant influence over them. The following amounts have been included in respect of these limited partnerships:

	6  months to	6 months to	12 months to
	30 September 2009	30 September 2008	31 March 2009
	(unaudited)	(unaudited)	(audited)
Income statement	£m	£m	£m
Carried interest receivable	(2)	10	(3)
Fees receivable from external funds	25	24	53

	30 September 2009	30 September 2008		31 March 2009
	(unaudited)	(unaudited)		(audited)
Balance sheet	£m	£m		£m
Carried interest receivable	46	62		44

Investments

The Group makes minority investments in the equity of unquoted and quoted companies. This normally allows the Group to participate in the financial and operating policies of those companies. It is presumed that it is possible to exert significant influence when the equity holding is greater than 20%. These investments are not equity accounted for

(as permitted by IAS 28) but are related parties. The total amounts included for these investments are as follows:

	6  months to	6 months to	12 months to
	30 September 2009	30 September 2008	31 March 2009
	(unaudited)	(unaudited)	(audited)
Income statement	£m	£m	£m
Realised (losses)/profits over value on the disposal of investments	(26)	108	151
Unrealised profits/(losses) on the revaluation of investments	63	(231)	(1,372)
Portfolio income	63	125	138

	30 September 2009	30 September 2008		31 March 2009
	(unaudited)	(unaudited)		(audited)
Balance sheet	£m	£m		£m
Quoted equity investments	352	490		496
Unquoted equity investments	1,147	1,769		1,224
Loans and receivables	1,327	1,508		1,219

From time to time transactions occur between related parties within the investment portfolio which the Group influences to facilitate the reorganisation or recapitalisation of an investee company. There has been no single transaction in the period with a material effect on the Group's financial statements and all such transactions are fully included in the

above disclosure.

Advisory arrangements

The Group acts as advisor to 3i Infrastructure plc, which is listed on the London Stock Exchange, and acted as advisor to 3i QPEP prior to its solvent liquidation. The following amounts have been included in respect of these advisory relationships:

	6  months to	6 months to	12 months to
	30 September 2009	30 September 2008	31 March 2009
	(unaudited)	(unaudited)	(audited)
Income statement	£m	£m	£m
Realised losses over value on the disposal of investments	-	-	(25)
Unrealised profits/(losses) on the revaluation of investments	49	(42)	(47)
Fees receivable from external funds	3	12	19
Dividends	9	10	17

	30 September 2009	30 September 2008	31 March 2009
	(unaudited)	(unaudited)	(audited)
Balance sheet	£m	£m	£m
Quoted equity investments	277	484	395

Key management personnel

The Group's key management personnel comprises the members of the Management Committee and the Board's 
non-executive Directors.

	6  months to	6 months to	12 months to
	30 September 2009	30 September 2008	31 March 2009
	(unaudited)	(unaudited)	(audited)
Income statement	£m	£m	£m
Salaries, fees, supplements and benefits in kind	2	3	6
Bonuses and deferred share bonuses	1	1	1
Increase in accrued pension	-	-	-
Carried interest payable	4	2	(1)
Share-based payments	1	2	2
Termination benefits	-	-	3

	30 September 2009	30 September 2008	31 March 2009
	(unaudited)	(unaudited)	(audited)
Balance sheet	£m	£m	£m
Bonuses and deferred share bonuses	1	2	1
Carried interest payable within one year	2	11	4
Carried interest payable after one year	6	6	7

Carried interest paid in the year to key management personnel was £6 million (2008: £8 million).

Accounting policies

Basis of preparation 

These financial statements are the unaudited condensed half-yearly consolidated financial statements (the "Half-yearly Financial Statements") of 3i Group plc, a company incorporated in Great Britain and registered in England and Wales, and its subsidiaries (together referred to as the "Group") for the six-month period ended 30 September 2009.

The Half-yearly Financial Statements have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" ("IAS 34") and should be read in conjunction with the Consolidated Financial Statements for the year to 31 March 2009 ("Report and accounts 2009"), as they provide an update of previously reported information.

The Half-yearly Financial Statements were authorised for issue by the Directors on 11 November 2009.

The Half-yearly Financial Statements have been prepared in accordance with the accounting policies set out in the Report and Accounts 2009 with the exception of the requirements of the revision to IAS 1: Presentation of Financial Statements and the adoption of IFRS 8: Operating Segments. The remaining new and revised International Financial Reporting Standards ("IFRS") and interpretations effective in the period have had no impact on the accounting policies of the Group. The presentation of the Half-yearly Financial Statements reflects the disclosure required by IAS 1: Presentation of Financial Statements. Where necessary, comparative information has been reclassified or expanded from the previously reported Half-yearly Financial Statements to take into account any presentational changes made in the Report and Accounts 2009. The Half-yearly Financial Statements do not constitute statutory accounts. The statutory accounts for the year to 31 March 2009, prepared under IFRS, have been filed with the Registrar of Companies and the auditors have issued a report, which was unqualified and did not contain a statement under section 237(2) or section 237(3) of the Companies Act 1985.

The preparation of the Half-yearly Financial Statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The most significant techniques for estimation are described in the accounting policies and in "portfolio valuation - an explanation" in the Report and Accounts 2009.

The Group operates in business lines where significant seasonal or cyclical variations in activity are not experienced during the financial year.

Statement of Directors' responsibilities

The Directors confirm to the best of their knowledge that:

a)	the condensed set of financial statements have been prepared in accordance with IAS 34 as adopted by the European Union; and
b)	the interim management report includes a fair review of the information required by the FSA's Disclosure and Transparency Rules (4.2.7 R and 4.2.8 R).

The Directors of 3i Group plc and their functions are set out below:

Baroness Hogg, Chairman

Oliver Stocken, Deputy Chairman

Michael Queen, Chief Executive and Executive Director

Julia Wilson, Finance Director and Executive Director

John Allan, Non-executive Director (from 1 September 2009)

Richard Meddings, Non-executive Director

Willem Mesdag, Non-executive Director

Christine Morin-Postel, Non-executive Director

Alistair Cox, Non-executive Director (from 1 October 2009)

Robert Swannell, Non-executive Director and Senior Independent Director

By order of the Board

K J Dunn Secretary

11 November 2009

Independent review report to 3i Group plc

Introduction

We have been engaged by 3i Group plc to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2009 which comprises the consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated balance sheet, consolidated cash flow statement and the related notes 1 to 13. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in the accounting policies note, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of half-yearly financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

London

11 November 2009

Ten largest investments

The table below provides information on our ten largest investments in respect of the Group's holding excluding any managed or advised external funds. The valuation basis provides further information on how the Group's valuation has been derived. Income represents dividends received (inclusive of overseas withholding tax) and gross interest receivable in the six months to 30 September 2009. Net assets and earnings figures are taken from the most recently audited accounts of the investee business, and are the net assets of each business and the total earnings on ordinary activities after tax respectively. Earnings are stated after charging interest and tax resulting from the company-specific capital structure and therefore can differ from the earnings used in the valuation process. It should be noted that, because of the varying rights attached to the classes of shares held by the Group, it could be misleading to attribute a certain proportion of the earnings and net assets to the proportion of equity capital held by the Group.

Further information on our portfolio investments is provided as case studies, which are available on our investor relations website, www.3igroup.com

	Business line	Proportion
	Geography	of equity	Residual		Income in
Case name	First invested in	shares	cost	Valuation	the year	Net assets	Earnings
Description of business	Valuation basis	held	£m	£m	£m	£m	£m
3i Infrastructure plc	Infrastructure
3i-infrastructure.com	UK
Quoted investment company,	2007
investing in infrastructure	Quoted
Equity shares		33.2%	270	277	9
			270	277	9	921	43
Quintiles Transnational	Growth
Corporation	US
quintiles.com	2008
Clinical research outsourcing	Earnings
solutions
Equity shares		7.0%	100	148	2
			100	148	2	(421)	24
ACR Capital Holdings	Growth
Pte Limited	Singapore
asiacapitalre.com	2006
Reinsurance in large	Other
risk segments
Equity shares		31.6%	105	135	-
			105	135	-	410	(15)
Enterprise Group	Buyouts
Holdings Limited	UK
enterprise.plc.uk	2007
UK utilities and public sector	Earnings
maintenance outsourcing
		32.2%
			138	135	9	194	(48)
Ambea AB	Buyouts
Ambea.se	Sweden
Elderly, primary and	2005
specialist care	Earnings
Equity shares		44.7%	11	122	-
Loans			9	11	-
			20	133	-	63	15
Inspicio Sarl	Buyouts
inspicioplc.com	UK
Global testing and inspection	2007
	Earnings
Equity shares		38.2%	2	9	-
Loans			114	114	8
			116	123	8	(24)	(51)
Foster + Partners1	Growth
fosterandpartners.com	UK
Architectural services	2007
	Earnings
		40.0%
				119	8	(32)	(18)
Memora Inversiones	Buyouts
Funerarias	Spain
memora.es	2008
Funeral service provider	Market
	adjustment
Equity shares		38.1%	8	9	-
Loans			85	97	6	-
			93	106	6	28	(9)
Telecity Group plc	Buyouts
telecitygroup.com	UK
Operator of carrier neutral	1998
data centres	Quoted
Equity shares		16.5%	11	105	-
			11	105	-	189	25
MWM GmbH	Buyouts
mwm.net	Germany
Provider of decentralised	2007
power generation systems	Earnings
Equity shares		41.3%	28	39	-
Loans			41	56	-	-
			69	95	-	66	(18)

1 The residual cost of this investment cannot be disclosed per a confidentiality agreement in place at investment.

Forty other large investments

In addition to the ten largest investments, detailed below are forty other large investments which are substantially all of the Group's investments valued over £15 million. This does not include eleven investments that have been excluded for commercial reasons.

	Business line	Proportion
	Geography	of equity	Residual
Case name	First invested in	shares	cost	Valuation
Description of business	Valuation basis	held	£m	£m
Labco SAS	Growth	17.4%	93	93
labco.eu	France
Clinical laboratories	2008
	Earnings
3i India Infrastructure Holdings Limited1	Infrastructure	21.2%	59	81
Fund investing in Indian infrastructure	India
	2007
	Other
British Seafood Distribution Group	Growth	28.5%	79	81
Holdings Limited	UK
britishseafood.co.uk	2007
Seafood sourcer, processor and importer	Earnings
from Far East
Phibro Animal Health Corporation	Growth	29.9%	89	80
pahc.com	US
Animal healthcare	2008
	Quoted
Sortifandus, S.L.	Buyouts	43.1%	40	79
(GES - Global Energy Services)	Spain
services-ges.com	2006
Wind power service provider	Earnings
Mayborn Group plc	Buyouts	45.7%	70	69
mayborngroup.com	UK
Manufacturer and distributor of baby products	2006
	Earnings
Hyva Investments BV	Buyouts	44.1%	14	60
hyva.com	Netherlands
Branded hydraulics for commercial vehicles	2004
	Earnings
NORMA Group Holding GmbH	Buyouts	31.2%	27	60
normagroup.com	Germany
Provider of engineered joining technology	2005
	Earnings
Cornwall Topco Limited (Civica)	Buyouts	40.6%	73	56
civica.co.uk	UK
Public sector IT and services	2008
	Earnings
Gain Capital Holdings Inc	Growth	13.8%	48	53
gaincapital.com	US
Retail online foreign exchange trading	2008
	Earnings
Navayuga Engineering Company Limited	Growth	10.0%	23	46
necltd.com	India
Engineering and construction	2006
	Earnings
Alö Intressenter AB	Growth	35.2%	34	45
alo.se	Sweden
Manufacturer of front end loaders	2002
	Earnings
Ortnortopco AS (Axellia/Alpharma)	Buyouts	32.5%	64	44
alpharma.com	Norway
Developer and supplier of specialist active	2008
pharmaceutical ingredients	Earnings
Scandferries Holding GmbH (Scandlines)	Buyouts	22.7%	31	40
scandlines.de	Germany
Ferry operator in the Baltic Sea	2007
	Other
Everis Participaciones S.L.	Growth	18.3%	30	37
everis.com	Spain
IT consulting business	2007
	Earnings
Inspecta Holding OY	Buyouts	39.2%	46	37
inspecta.fi	Finland
Supplier of testing and inspection services	2007
	Earnings
Mold Masters Luxembourg Holdings Sarl	Growth	49.3%	83	35
moldmasters.com	Canada
Leading plastic processing technology provider	2007
	Earnings
Joyon Southside1	Growth	49.9%	25	35
Real estate	China
	2007
	Other
Radius Systems Limited	Buyouts	31.6%	28	33
radius-systems.com	UK
Manufacture of thermoplastic pipe systems	2008
for gas and water distribution	Earnings
Dockwise	Buyouts	14.7%	1	28
dockwise.com	Netherlands
Specialist in heaving transport shipping within	2007
the marine and oil and gas industry	Quoted
Kneip Communication SA	Growth	41.1%	25	27
kneip.com	Luxembourg
Outsourced publication of investment fund data	2007
	Earnings
Periclimeno, SL (Panreac Quimica, S.A.)	Buyouts	27.7%	14	26
panreac.com	Spain
Manufacturer of chemicals for analysis	2005
	Earnings
Azelis Holding S.A.	Buyouts	32.1%	29	26
azelis.com	Luxembourg
Distributor of speciality chemicals, polymers and	2007
related services	Earnings
Franklin Offshore International Pte Ltd	Growth	30.9%	15	25
franklin.com.sg	Singapore
Manufacture, installation and maintenance	2007
of mooring and rigging equipment	Other
Boomerang TV, S.A.	Growth	40.0%	27	24
grupoboomerangtv.com	Spain
Production of audiovisual contents	2008
	Earnings
Hyperion Insurance Group Limited	Growth	27.2%	30	23
hyperiongrp.com	UK
Specialist insurance intermediary	2008
	Other
Advanced Power AG	Growth	38.1%	17	22
advancedpower.ch	Switzerland
Developer of conventional power stations	2007
	Net Asset
Hobbs Holding No.1 Limited	Buyouts	42.2%	49	22
hobbs.co.uk	UK
Retailer of women's clothing and footwear	2004
	Earnings
Indiareit Offshore Fund1	Growth	20.0%	21	21
Indian real estate fund	India
	2007
	Other
Beijing Digital Telecom Co. Limited	Growth	17.4%	11	21
Dixintong.com	China
Mobile phone retailer	2006
	Earnings
RBG Limited	Buyouts	39.5%	4	21
rbgltd.com	UK
Oil and gas service provider	1996
	Earnings
MKM Building Supplies	Growth	30.3%	14	21
(Holdings) Limited	UK
mkmbs.co.uk	1998
Building material supplier	Earnings
Asia Strategic Medtech Holdings	Buyouts	37.5%	17	20
(Mauritius) Limited (LHI)	China
lhitechnology.com	2008
Medical cable assemblies	Earnings
AES Engineering Limited	Growth	40.8%	17	20
Aesseal.co.uk	UK
Manufacturer of mechanical seals	1996
and support systems	Earnings
Soya Concept AS	Growth	44.1%	13	18
soyaconcept.com	Denmark
Fashion design company	2007
	Earnings
DC Druck Chemie GmbH	Buyouts	44.3%	22	18
druckchemie.com	Germany
Business services	2008
	Earnings
Pearl (AP) Group Limited	Buyouts	39.0%	35	18
(Agent Provocateur)	UK
agentprovocateur.com	2007
Women's lingerie and associated products	Other
Welspun Gujarat Stahl Rohren Limited	Growth	2.5%	19	16
welspun.com	India
Oil and gas line pipe manufacturing	2007
	Quoted
Goromar XXI, S.L. (Esmalglass)	Buyouts	21.6%	20	15
esmalglass.com	Spain
Manufacturer of frites, glazes and colours for tiles	2002
	Earnings
Nova Rodman, S.L.	Growth	12.0%	19	15
rodman.es	Spain
Boat manufacturer	2004
	Earnings

1 No company website available for this investment.

Note A

The half-yearly report 2009 will be posted to shareholders on 25 November 2009 and thereafter copies will be available from the Company Secretary, 3i Group plc, 16 Palace Street, London SW1E 5JD.

Note B

The interim dividend is expected to be paid on 13 January 2010 to holders of ordinary shares on the register on 11 December 2009. The ex-dividend date will be 9 December 2009.

The 3i Group plc Half-yearly report for the six months ended 30 September 2009 is also available at www.3igroup.com

 

END

 

 

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