I've received a couple of questions about how this site "found" 3i Group PLC. These are from residents of the US, and the questions probably stem from 3i not being listed on the NYSE or NASDAQ, which means it's not mentioned on CNBC in America, FOX, CNN, MSNBC or PBS. The company is, however, occasionally reported on in publications like The Wall Street Journal and Barron's (more in a moment).
What's more, 3i is widely known in the UK and on the European continent, as it is a member of the FTSE 100 and Europe's largest publicly-traded buyout firm.
Your humble editor first heard of 3i in 1994 when it was going public and received fairly extensive coverage in the Financial Times. The company had originally been founded as Investors in Industry in 1945 by Prime Minister Clement Atlee's Labour Party government to meet demand for capital for small and mid-sized businesses in the UK following World War II. It was owned by the Bank of England and Britain's major banks before being floated on the London Stock Exchange.
3i's management in the later 1990s held a significant number of investments in the technology sector -- with its price peaking at 1,011 pence per share in September 2000. Of course, the tech boom ended and the company slumped for the next several years. New management has since come in, which emphasizes rewarding shareholders (see the previous post for more about the strategy 3i has been following recently under CEO Philip Yea).
I first explored the possibility of 3i as a value investment after reading Meryl Witmer's favorable comments about the company in the Barron's issue dated January 31 of this year. Witmer is with Eagle Capital Partners in New York and is an excellent stock picker.
I researched the company, and concluded the stock was undervalued at current prices. I also like the idea of management being prepared to walk away from business it feels does not maximize the chances of profit for shareholders, and will thus return capital to shareholders and repurchase company stock in lieu of attractive opportunities. All this, and 3i's strategic move into Asia -- especially India and China -- presents interesting growth possibilities.
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