3i Names Borrows Chief Investment Officer

Private equity firm 3i Group named Simon Borrows to the post of chief investment officer. Borrows will also join the firm’s board when he starts at 3i this Fall. Borrows, who advised on the IPO of 3i in 2994, is currently Chairman of Greenhill & Co. International. Before founding the European operations of Greenhill in 1998, he was the managing director of Baring Brothers International Limited.

(Reuters) – Private equity firm 3i Group has hired Simon Borrows as chief investment officer, a move to strengthen its senior team and placate investors after a reshuffle last year saw its long-time head of buyouts leave.

The appointment of Borrows, who advised on the IPO of 3i in 1994, comes as the group prepares to address shareholders at its annual general meeting on Wednesday and as it updated the market on its performance for the three months to end-June.

3i has been facing pressure from some shareholders, including Schroders, BlackRock and Scottish Widows Investment Partnership, to return cash through a share buyback, according to weekend press reports.

They have also been disappointed at the weak share price, trading currently at an 18 percent discount to net asset value, and are still smarting at the departure of senior dealmaker Jonathan Russell in the business shake-up last year.

Borrows is currently chairman of investment banking firm Greenhill & Co and will join 3i in the autumn, also taking a seat on the London-listed private equity firm’s board, the group said on Wednesday.

Borrows founded Greenhill’s European operations in 1998 and before that was the managing director of Baring Brothers International. He is also a non-executive director of British Land and Inchcape .

In a note to investors, called the appointment of Borrows, positive.

“We view this as a significant appointment and a good move with some new senior management being appointed to 3i from outside,” said Oriel Securities’ Iain Scouller in a note to investors.

He also welcomed a rise in new investments over the first three months of 3i’s financial year.

In a separate statement, 3i said investments in the quarter were 233 million pounds ($374 million), more than double the same period last year as buyouts and deals for minority stakes in companies picked up.

Realisations from sales of investments also rose to 337 million pounds as the firm banked proceeds from the sale of hydraulic pumps maker Hyva and the IPO of vehicle clamp manufacturer Norma .

Shares in the group were down 1.4 percent at 288 pence At 1020 GMT.

With new deals for 3i picking up, echoing a wider rebound in private equity M&A, analysts believe that it is a good time for 3i to have cash to invest.

3i’s cash reserves have grown after the group tackled its previously high debt burden. The group had cash, cash deposits and undrawn committed facilities of 1.9 billion pounds at end June.

Chief executive Michael Queen said new investments and a strong pipeline of potential new deals, provided a positive outlook for the business.

3i said it had also been selected to take part in a pilot programme by the Shanghai government, allowing it to convert up to $100 million into renminbi to make investments in China without the need for any exchange rate controls.

Ian Nolan, chief investment officer since 2009, will be moving to a new role in the autumn. ($1 = 0.622 British Pounds) (Reporting by Simon Meads; Editing by Hans-Juergen Peters)