Private equity firm 3i Group
One of Europe's largest investors in companies worth up to 1 billion euros, London-listed 3i has bought into businesses as diverse as Tommee Tippee baby bottle maker Mayborn, Dutch discount retailer Action, and lingerie retailer Agent Provocateur.
The five-year investment period on Eurofund V, its fifth buy-out fund, ends on Tuesday with 850 million euros of commitments unspent, people familiar with the situation said.
The UK's largest listed private equity firm intends to retain this capital for follow-on investments, such as bolt-on deals and any extra money troubled investments may require.
But bankers who advise private equity firms and who have regular dealings with 3i say the firm is walking away from more deals, and they believe the firm will be very cautious about new buyouts over the next 12 months.
In our dealings with them it has become noticeable that they have been less aggressive ... in chasing new deal opportunities, one banker with regular contact with 3i said.
3i's fifth fund is now closed to new investments except for one potential deal that was already in the pipeline.
A slowdown in deals won't help the company overcome pressure from shareholders over its share price, that has trailed asset values by as much as 40 percent in recent months.
The company's shares are trading at less than a third of their peak in 2007 since when it has made heavy write-downs on companies such as Enterprise Group which it bought before the crisis.
However, 3i is unusual among its peers in that it can draw on its own balance sheet to do deals, as well as on third party investors that have put money in its funds.
The structure means 3i can continue to pursue buyout deals before it comes back to market for a new European fund in late 2012 or 2013,Chief Executive Michael Queen said last week when the company announced first-half results.
Recent forays into debt management and a new fund for minority investments have broadened 3i's asset base away from takeover deals, as the group seeks to generate less volatile returns.
In the first half of the year 3i sealed two new buyout deals -- Action and auto parts maker Hilite, with equity from its balance sheet and third party funds of 453 million pounds.
(Editing by Greg Mahlich)