3i Group PLC is looking to more than double its investments in Asia this year, with focus on a couple of energy plays in the region. This from an interview Reuters (registration may be required) conducted with 3i's Mark Thornton in Singapore:
"'In Southeast Asia, we're seeing one or two very interesting opportunities in the energy sector',"Mark Thornton, 3i's managing director and Asia co-head told Reuters in an interview.
"'Southeast Asia has a lot of natural resources. In the current climate, we are seeing increasing demand for energy and oil prices remain attractive'," he said, adding that there was less competition in Southeast Asia than in North Asia, where a large number of funds are scouring for deals."
On a couple of side notes, 3i has been fulfilling its promise of buying back shares and the company recently announced its first deal in India. The company recently opened offices in India and mainland China (its had an office in Hong Kong for a while).
3i Group was first mentioned on this site in May. You can read my rationale for owning the stock by clicking on the company's name in the "Current Holdings" menu at the right. Note the stock is up a bit since then, I'm holding it and not increasing my stake, and it trades in London. (There is no ADR but shares do trade over-the-counter in the US.)
Basically, I viewed 3i as attractive in May because it was undervalued and its management is committed to shareholders.
First, the company is reducing its number of investments -- paying out money to shareholders and buying back stock as it does.
Second, the company has a competitive advantage doing small-to-mid size deals across the UK and Continental Europe.
Those 2 factors alone were enough to justify purchasing the stock based on conservative estimates of its value. Management's potential success in doing deals in Asia -- particularly mainland China and India, but the rest of the region as well -- could be had for free.