3i to sell off venture capital portfolio

The consortium is led by Coller Capital and HarbourVest Partners.

Last year 3i decided to abandon early stage investment in start-up companies in order to focus on buy-outs, growth capital and infrastructure instead.

The other member of the consortium is DFJ Esprit, a UK venture capital firm backed by Draper Fisher Jurvetson, known for its investments in Silicon Valley. Coller of the UK and HarbourVest of the US are to provide the capital, while DFJ will manage the holdings, the report said.

The sum of around £100m marks a significant discount for the consortium, as the 36 venture capital investments carry a value of about £250m (€291m) in 3i’s accounts.

The portfolio being sold consists of stakes in European healthcare and technology firms including Icera, a mobile phone chip maker; The Cloud, a wireless network operator; and Small Bone Innovations, a French orthopaedic technology company.

3i has been trying to reduce its debt over the course of 2009 and is likely to use the proceeds of any sale towards this cause. The firm's debt had been reduced from £1.92bn (€2.23bn) at the end of March to around £1bn (€1.16bn) at the end of June.

3i has already sold a significant portion of its venture capital portfolio in the US and Germany. It has also laid off some of its venture capital staff.

The company’s venture capital business has shrunk steadily since the technology crash of 2000 when it was hit by about £1bn of writedowns.

In the year to March 2009, the value of 3i’s remaining 123 venture capital assets fell to £314m (€365.5m) or less than five per cent of its total portfolio.

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