Producing consistent market-beating returns

Performance culture

From the setting of objectives for individuals to the development of value creation plans for specific investments, 3i's culture is one of ambition. Setting ambitious goals, measuring progress and facing up to issues and dealing with them are key aspects of this.

Clear targets

Having clear targets for our own business, as well as for each investment, is an essential component of delivering value. 3i's published targets for each of our business lines, using the standard industry measure, cash-to-cash returns, are shown in the table below. Also shown, is the variability that we consider appropriate to reflect our risk profile in terms of cyclical and vintage volatility. The transparency of these targets and the focus that they bring is healthy for 3i and reinforces our straightforward approach to doing business.

Note: For an explanation of cash-to-cash returns and volatilities, please see Returns and IRRs - an explanation.

Aligned interests

An important aspect of creating value is aligning our interests with the interests of other shareholders and key stakeholders in the businesses in which we invest. This is especially important in minority equity investing. Establishing the right investment agreements at the outset, clarity on roles and responsibilities and what is expected of each party in delivering a plan for creating value, are essential.

Focus

To invest in the highest quality businesses, and to grow 3i returns, requires focus. Focus on identifying the right opportunities, focus on the key areas which will create value and then focus on delivering that value. Since 2002 3i has become a much more focused business, as the charts to the right demonstrate.