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3i's Asset Value Rises

LONDON (Reuters) – UK-based buyout firm 3i Group Plc (III.L: Quote, Profile, Research) said on Thursday it sees a challenging outlook for the year, as assets under management rose by 37 percent in the year through March.

The value of 3i's investments rose to 9.8 billion pounds ($19.1 billion) from 7.1 billion a year earlier, it said. The company's return on investments however fell to 18.6 percent from 26.8 percent a year earlier.

Buyout firms have struggled to borrow the funds to continue doing deals during the recent credit crunch after several years' record opportunities and a cheap debt-fuelled M&A boom that lasted until mid-2007.

“With so much uncertainty still clouding economic prospects in the major economies we take a cautious view of the coming year,” said 3i. However the company added it hopes to counter this outlook by taking a “highly selective approach to investments.”

The shares were up 0.9 percent to 876.5 pence at 0730 GMT.

3i also said it is planning a new convertible bond worth about 425 million pounds as a similar existing loan matures. (Reporting by Mathieu Robbins; Editing by David Holmes)