I’m thinking of taking some profits on 3i (III, 400p) (theoretical ex rights price 250p)

There will be no new news from this private equity group until the Interim Results, which are to be released in July, maybe with the AGM which is on July 8th (company website Financial calendar http://www.3igroup.com)

In reviewing the media on 3i I’ve come across a few ‘soundbites’ which are worth noting:

May 11th in a CNBC interview 3i Group Communication Director Patrick Dunne admitted the rights issue to be opportunistic: ‘we don’t need the money’.

He then went on to say that private equity valuations were ‘not quite at the go-shopping point’ yet. He also suggested that the target return of 20% was ‘being reviewed‘, that the returns ‘would be much more volatile going forward‘.

I was also drawn to a couple of questions in an article by Simon Nixon at the WSJ, also on May 11th: ‘investors need to ask themselves two questions: Has 3i sufficiently written down its existing £8 billion of assets under management, including £4 billion on its own balance sheet? And will future returns be sufficient on a risk-adjusted basis?’

3i shares are up 94% absolute or 74% relative to the market since our comment of February 25th ‘3i – Five of the seven non execs have bought shares in the last month’.

I’ve sold today half my position in the group.

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