3i to shut Cambridge office - News - Venture Capital - Business Weekly

HOME

High Tech

3i to shut Cambridge office

Written by Tony Quested

Wednesday, 20 February 2008

3i partner in Cambridge, Laurence Garrett

Venture capital giant 3i is set to close its Cambridge office in a major strategic shift by the quoted group. But senior sources insist they will not be abandoning Cambridge innovation.

3i celebrated 50 years of investing in Cambridge in December 2005; over that half-century, the firm has invested many hundreds of millions of pounds in local companies – £350m between 1995 and 2005 alone.

Business Weekly understands that 3i partner Laurence Garrett will continue to live in the Cambridge area but that 3i is quitting its Science Park offices and will mastermind investments from key global hubs including London.

The rationale behind the move mirrors a sea change in the nature of 3i’s portfolio. In recent years Garrett and his Cambridge team have been increasingly scouting the globe for disruptive technologies and these are as likely to be found in Beijing or Bangalore as Cambridge.

Also, 3i has increasingly invested as part of international syndicates; quality of investment has long outweighed quantity. Senior executives locally contacted in a confidential straw poll by Business Weekly fear Cambridge plc may suffer a backlash if 3i’s decision is taken as signalling lack of confidence in the ‘Ideas Region.’

Although it has been obvious that 3i has reined back its support for early-stage businesses, it has still been the most active investor in Cambridge-related hi-tech and Life Sciences businesses in recent months.

As a group, 3i is reorganising its technology and healthcare portfolios and you can expect to see more of its VC business gradually merge with its growth capital unit, although the firm says it will not be shutting down the venture side of its business altogether.

Growth capital and buy-out transactions have tended to dominate the healthcare space in recent times and 3i is merely reading the runes and reorganising accordingly, as Apax Partners has done on the back of what it described as “volatile’ venture results.

Even Index Ventures, a doyen of early-stage investment, launched a growth capital fund targeting later-stage TMT investments last month. 3i’s venture portfolio slid from £750m at the end of March 2007 to £715m at the end of September following some strong exits. Its total investment portfolio is valued at £5.1bn. Industry figures show that the venture business made returns of 17 per cent in 2006 and made a small loss in 2007 before bouncing back into the black.

Set as favorite

Bookmark

Email This

Trackback(0)

TrackBack URI for this entry