THE Scottish portfolio of 3i, the leading venture capital group, rose strongly in the year to March, finishing at #582m, an increase of 32%, invested in 342 companies.
However, the outlook for 3i's manufacturing customers has deteriorated and the increase in base rates can only extend this trend.
The group's own index of its customers' opinion on the outlook has turned negative for the first time since 1992, showing minus 6 for the second quarter against plus 9 in the first quarter.
The pessimism, though, is confined to manufacturing, where the index read minus 29. For non-manufacturing it was plus 22.
The year 1997-98 was strong for 3i as a whole. It achieved a total shareholder return of 22.4%, while net asset value rose 19.8% to 582p, well ahead of its benchmarks, such as a 14.7% increase in the small companies' index.
A final dividend of 6.4p lifts the total by 12% to 10.3p.
Willie Watt, 3i director in Scotland, said its investment in Scotland had risen by 11.5% in the year. He said: ''Significantly, investment in emerging businesses, including an increased focus on technology, has increased from #4.9m to #11.2m, reinforcing 3i's commitment to investing in young, dynamic companies with high growth potential.''
Deals have included putting #6m into Roslin Bio-Med, which was spun off from Roslin Institute, of Dolly the sheep fame, and #1m into Neuropa, a Glasgow genomics company. Half the Scottish Technology Fund, set up with Scottish Enterprise, was contributed by 3i.
Other deals included backing for the #68m purchase of Grampian Holdings' pharmaceuticals division and for the #33m acquisition of Eagle Taverns.
Over 50% of the market in Scotland is currently held by 3i. Watt sees more deals coming through this year as merger and acquisition activity remains high.
More than #1000m was invested by 3i which ended the year with total assets of #5224m, making it the largest single provider of venture capital in the world.
Comment Page 27
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article