James Moore: Fate of 3i is a lesson for future government
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Outlook The wolves are circling around 3i in the form of corporate raider Edward Bramson and his City pals. It should make for an entertaining spat.
Mr Bramson is an unusual operator. He takes minority stakes in struggling companies, canvasses support among unhappy institutional shareholders and gets himself voted in as executive chairman so he can run them.
It's takeover by stealth, and worked very well for him at F&C Management, the fund manager. 3i will be a rather tougher nut to crack, but given F&C's share price performance since Mr Bramson took control, you wouldn't bet against the City lining up behind him.
Should we care? In one respect, yes. With F&C, Mr Bramson drove a coach and horses through what is considered best practice when it comes to corporate governance.
Sure he got results, but there are plenty of companies that will take note of the way the City allowed it to happen. They'll be saying: "Well if he did it, why shouldn't we?"
When it comes to 3i as an institution, not so much. The company was set up under the auspices of the Bank of England after the war to provide financing to small and medium-sized enterprises (SMEs). You know, the ones which ministers keep saying we need to pull us out of a recession that just refuses to go away.
But instead of sticking to that, and making a return from it, 3i got terribly excited at the prospect of being a sort of British KKR or Blackstone, when they were busily buying up quoted companies on the cheap, loading them up with debt, and then making a fortune by floating them again.
Unfortunately, it didn't work so well for 3i "the acceptable face of private equity". The shares have been dogs ever since.
So no, it really doesn't matter all that much what happens to it.
But there is a lesson here for a future government which is eyeing a privatisation of the proposed state-investment bank aimed at SMEs if (and it's a big if) it proves successful.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments