British venture capital group 3i aims to triple its Irish investment portfolio to almost £150 million (€190 million) by 2006, its incoming Irish director said yesterday.
At the opening of a 3i office in Dublin, Mr Clive Austin said the group would aim to shake up the leveraged buyout market in the Republic by pursuing deals worth up to £100 million.
3i will hire an Irish-based team to seek investment opportunities in both the Republic and Northern Ireland, he added.
He said Ireland was an attractive investment environment with economic growth estimated at 5-6 per cent this year. It also had a strong base of quality, well-educated people, he added.
He said 3i was also attracted by a critical mass and depth of expertise in key growth sectors, including software. "The creativity is still there in software," he said. "There is still a high deal flow, particularly in Ireland, in this area."
Despite the economic and stock market downturn, the deal flow had held up much better than expected and 3i had not noticed a big fall-off, according to Mr Austin.
3i will take stakes worth between 10-50 per cent of equity in businesses through private funding rounds. A typical investment will last between three to seven years.
Mr Austin said the price of fund-raisings was lower by as much as 70 per cent compared to 12 months ago, closely reflecting the downturn in public stock markets.
It would be a great shame if entrepreneurs kept latching on to last year's prices and missed growth opportunities, he said.
The group's new office is the first physical presence 3i has established in the Republic for more than 10 years, following the earlier sale of its venture capital portfolio to DCC.
3i was not able to compete in the Irish marketplace until the late 1990s because of a "non-compete" clause signed by the firm.
However, since then, 3i has made 17 investments in the Republic and Northern Ireland, worth some £48 million, nine of which are technology investments. It currently holds equity stakes in Baltimore Technologies, Macalla and the Wolfe Group.
Asked if 3i would invest in a possible rights issue by troubled software security firm Baltimore, Mr Russ Cummings, director of software at 3i, said the group would see what strategy the firm laid out.
