Sherborne's turnaround fund lifts 3i stake to 4%

Sherborne has increased its stake in 3i Group to 4%.

In a note issued this morning, Edward Bramson's Sherborne said it had built up a 40.8 million holding in 3i shares, which it acquired for £105.4 million.

Sherborne played its cards close to its chest about its plans for the position and said it might dispose of 'all or part' of its 3i stake. However, it equally hinted it could scoop up more shares in the private equity investment company, which has staged a significant recovery in recent months.

The 3i investment sits in Sherborne's B fund, which pulled in around £200 million at the beginning of the year and devoted some of this seed money to acquiring a starter position in 3i.

Analysts at Numis said Sherborne has the capacity to increase its 3i holding to around 7%, but the rationale for doing so would not be clear given the 50% rally in its shares.

Numis said: 'It is not clear to us what value Sherborne could add at 3i Group, given Simon Borrows has already taken radical steps to cut costs and refocus the private equity operation.

'We believe most investors will be prepared to give him time to implement the turnaround.'

At Thursday's close shares in 3i traded at 320.4p, and at a premium of 7.1%. 

Over the 12 months to the end of February, 3i has been able to grow its share price by 71% and its net asset value by 5.8%.  This is versus a 30% gain in the LPX Composite Index.