3i sees Asia holding 20 pct of assets

By Alison Tudor, Asia Private Equity Correspondent

HONG KONG (Reuters) - Executives at 3i Group Plc (III.L: Quote, Profile, Research, Stock Buzz), Europe's biggest listed private equity and venture capital firm, expect one fifth of its assets under management to be in fast-growing Asia within two to three years.

That represents a shift in focus for the London-based firm, which in November 2006 had only 5 percent of its assets in Asia.

"Europe is our home but Asia is our ambition," Chris Rowlands, 3i's Managing Partner for Asia, said at the Reuters Hedge Funds and Private Equity Summit in Hong Kong.

3i is focusing its energy in Asia on India, China and Southeast Asia.

Asia exerts a strong pull for European private equity firms, offering them potential returns of 3-4 times on their investments, compared with 2-2.5 times in their home base, Rowlands said.

The strategy involves heavy investment by 3i in building its Asia team, which has been active in the region for a decade, and Rowlands said 3i has the capacity and appetite for the task.

In the first half of 3i's financial year ending March 31, 2007, new investments in Asia were about 15 percent of the group's total, and nearly equaled the amount invested in the region during all of the previous year.

"I can confidently predict that sort of rate of growth will continue, not least as expansion of our own team across Asia generates activity, but we are going to be developing new business lines across Asia to replicate what we do in Europe," said Rowlands, who declined to give specifics ahead of 3i's full-year results due May 10.  Continued...