Overview and strategy
Chair’s statement
2
At a glance
4
Chief Executive’s statement
6
Our thematic approach to investment
12
Our business model
14
Strategic objectives and key performance indicators
16
Business review
Private Equity
19
Infrastructure
35
Scandlines
38
Sustainability
A responsible approach
40
1. Invest responsibly
42
2. Recruit and develop a diverse pool of talent
52
3. Act as a good corporate citizen
56
Our TCFD disclosures
58
Performance and risk
Financial review
70
Reconciliation of Investment basis and IFRS
75
Alternative Performance Measures
79
Risk management
80
Principal risks and mitigations
85
Directors’ duties under Section 172
94
Governance
Chair’s governance review
97
Governance at a glance
98
Corporate governance statement
99
Governance framework
101
Board of Directors
102
Executive Committee
104
The role of the Board
106
How the Board operates
107
What the Board did in FY2025
108
Engaging with stakeholders
110
Board performance review
114
Nominations Committee report
116
Audit and Compliance Committee report
121
Resilience statement
127
Valuations Committee report
130
Directors’ remuneration report
135
Additional statutory and corporate
governance information
148
Audited financial statements
Consolidated statement of comprehensive income
155
Consolidated statement of financial position
156
Consolidated statement of changes in equity
157
Consolidated cash flow statement
158
Company statement of financial position
159
Company statement of changes in equity
160
Company cash flow statement
161
Material accounting policies
162
Notes to the accounts
166
Independent Auditor’s report
199
Portfolio and
other information
20 large investments
209
Portfolio valuation – an explanation
211
Information for shareholders
212
Glossary
214
Our purpose
We generate attractive returns for
our shareholders and co-investors
by investing in private equity and
infrastructure assets.
As proprietary capital investors,
we have a long-term, responsible
approach.
We aim to compound value through
thoughtful origination, disciplined
investment and active management
of our assets, driving sustainable
growth in our investee companies.
For more information
and regular updates
www.3i.com
For definitions of our financial terms used throughout this report, please see our Glossary on pages 214 to 216.
Disclaimer
The Annual report and accounts have been prepared solely to provide information to shareholders. They should not be relied on by any other party or for any other purpose.
The Strategic report on pages 1 to 95, the Directors’ report on pages 96 to 134 and 148 to 153, and the Directors’ remuneration report on pages 135 to 147 have been drawn up and presented
in accordance with and in reliance upon UK company law and the liabilities of the Directors in connection with those reports shall be subject to the limitations and restrictions provided by that
law. This Annual report may contain statements about the future, including certain statements about the future outlook for 3i Group plc and its subsidiaries (“3i” or “the Group”). These are not
guarantees of future performance and will not be updated. Although we believe our expectations are based on reasonable assumptions, any statements about the future outlook may be
influenced by factors that could cause actual outcomes and results to be materially different.
Overview and strategy
3i Group plc | Annual report and accounts 2025
1
“I am pleased to report that 3i
delivered another strong set of
results in the financial year to 31
March 2025, consistent with our
excellent track record of growth
since the restructuring in 2012.”
FY2025 performance
2,542p
NAV per share
(31 March 2024: 2,085p)
25%
Total return on equity
(2024: 23%)
73.0p
Dividend per share
(2024: 61.0p)
FY2025 marks another strong year for 3i
and is our fifth consecutive year of annual
returns exceeding 20%. This sustained
performance highlights our ability to
generate consistent, long-term compounding
growth, while continuing to enhance our
dividend, despite ongoing macro-economic
challenges and geopolitical uncertainties.
Performance
In our financial year to 31 March 2025 (“FY2025”), the Group
generated a total return of £5,049 million (2024: £3,839 million) or
25% (2024: 23%) on opening shareholders’ funds. Net asset value
(“NAV”) increased to 2,542 pence per share (31 March 2024:
2,085 pence per share).
Action remained on its impressive growth trajectory and was the
primary driver of the Group’s performance in FY2025. Royal Sanders,
another long-term hold asset, also performed strongly, alongside a
number of our other larger assets in the broader portfolio, more than
offsetting weaker trading for an isolated number of companies with
specific end-market challenges. We also saw a step up in our
transaction activity across our portfolio, with a number of new
investments and strong realisations, against what remains a difficult
environment across the private market.
Market environment
The global economic environment remained difficult for most of our
financial year, shaped by ongoing geopolitical tensions and subdued
growth across most major economies. Against this backdrop,
consumer sentiment remains cautious, with affordability still a key
driver of spending behaviour. Our value-for-money and private label
businesses maintained a strong focus on the customer and all
performed well during FY2025. Action delivered another year of sector-
leading results across its key performance indicators and continued
momentum in its European store roll-out. We once again took the
opportunity to increase our stake in Action in FY2025. Across the
broader portfolio we saw good performance from a number of our
larger assets across the healthcare, industrial and infrastructure sectors.
Overview and strategy
Performance
highlights
3i Group plc | Annual report and accounts 2025
2
Chair’s
statement
Alternative Performance Measure (“APM”)
3i prepares its statutory financial statements in accordance with UK-adopted
international accounting standards. However, we also report a non-GAAP
“Investment basis” which we believe aids users of our report to assess the
Group’s underlying operating performance.
The Investment basis is an APM and is described on page 75. Total return, which
is defined as Total comprehensive income for the year and net assets are the
same under the Investment basis and IFRS and we provide a reconciliation of
our Investment basis financial statements to the IFRS statements from page 76.
We assess our performance using a variety of measures that are not specifically
defined under IFRS and are therefore termed APMs. These include: Gross
investment return (“GIR”) as a percentage of opening value, cash realisations,
cash investment, operating cash profit, net (debt)/cash and gearing. These
APMs are referred to throughout the report and their purpose, calculation
and reconciliation to IFRS can be found on page 79.
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The global M&A market experienced an improvement in our
financial year, as inflation and interest rates stabilised. While
transaction activity increased across most sectors, investor
sentiment remained cautious reflecting geopolitical uncertainties.
We maintained a highly selective and cautious approach to capital
deployment and realisations in the year. Our activity centred on
strategic reinvestments within our portfolio, new investments in
sectors we know well and targeted bolt-on acquisitions for several
of our existing portfolio companies. We also completed three
realisations across our portfolios at or beyond a money multiple of 2x.
Dividend
Our policy is to maintain or grow the dividend year on year,
subject to the strength of our balance sheet and the outlook for
investments and realisations. Cash generation remains strong, with
cash inflows of £2.4 billion from our portfolio companies in FY2025.
In line with our policy and in recognition of the Group’s financial
performance, the Board recommends a second FY2025 dividend
of 42.5 pence (2024: 34.5 pence), subject to shareholder approval,
which will take the total dividend to 73.0 pence (2024: 61.0 pence).
Based on the recommended dividend and the expected payment
in July 2025, we will have paid a total of £4.6 billion to shareholders
in dividends since our restructuring was announced in June 2012,
growing our total dividend by a compound annual growth rate of
18% over this period.
Board and people
We were pleased to welcome Hemant Patel to the Board on
3 February 2025 as an additional non-executive Director. He is the
Chief Financial Officer of Whitbread plc and brings deep and
highly relevant financial and commercial experience from his
different roles in retail and consumer businesses.
Sustainability
We were pleased to announce in May 2024 that our near-term
science-based emissions reduction targets (“science-based targets”)
had been validated by the Science Based Targets initiative (“SBTi”) in
March 2024. These targets cover our direct greenhouse gas (“GHG”)
emissions (Scope 1 and 2, market-based), as well as those related to
our portfolio. We have made significant progress in relation to our
portfolio engagement target, with seven portfolio companies across
3i Group and 3i Infrastructure plc (“3iN”) having set approved science-
based targets as at 31 March 2025, including most notably Action.
Outlook
We enter FY2026 with a carefully constructed portfolio that is
underpinned by two very strong long-term hold assets that are
delivering consistent compounding growth and a broader portfolio
that is operating in sectors that have proven their resilience through
many periods of market disruption.
Whilst we expect the ongoing market uncertainty to disrupt
transactions across the wider private market, we will continue to be
disciplined in our approach to new investment and realisations under
these conditions in FY2026.
David Hutchison
Chair
14 May 2025
Overview and strategy
Chair’s statement continued
3i Group plc | Annual report and accounts 2025
3
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3i is an investment company specialising in Private Equity and Infrastructure. We
invest in mid-market companies headquartered in Europe and North America. Our
largest investment, Action, is an example of our successful strategy of compounding
value over the long term, delivering consistent returns for our shareholders.
3i Group investment portfolio value as at 31 March 2025
Total assets under management as at 31 March 2025
£25.6bn
(2024: £21.6bn)
£38.7bn
(2024: £34.7bn)
Private Equity
£23.6bn
Infrastructure
£1.5bn
Scandlines
£0.5bn
Private Equity
£31.9bn
Infrastructure
£6.3bn
Scandlines
£0.5bn
3i Group investment portfolio by sector
as at 31 March 2025
Overview and strategy
At a glance
3i Group plc | Annual report and accounts 2025
4
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Private Equity
Infrastructure
Our Private Equity business is funded principally from our
proprietary capital, with some funding from co-investors
for selected assets. Its principal focus is to generate
attractive capital returns.
Our Infrastructure business manages assets on behalf
of third-party investors and 3i’s proprietary capital, with the
objective of generating attractive capital returns and earning
fund management fees and portfolio income for the Group.
Overview and strategy
At a glance continued
3i Group plc | Annual report and accounts 2025
5
Pages 12-13
Read more about Our
thematic approach to investment
Private equity sectors
Infrastructure sectors
Transport/
Logistics
Consumer & Private Label
Healthcare
Communications
Utilities
Industrial
Services & Software
Social
Infrastructure
Energy
Valuation at
31 March 2025
£17.8bn
Cash proceeds
received in FY2025
£1.6bn
Pages 20-23
Read more about Action case study
What is Action?
Action is the fastest growing non-food
discount retailer in Europe. At the end
of March 2025, Action had 2,967 stores.
Action offers its customers an ever-
changing variety of 6,000 products at
the lowest price.
Our investment in Action
Following our initial investment in 2011,
we have actively managed Action
through its pan-European roll-out,
with the business achieving revenue
of €13.8 billion in 2024.
At 31 March 2025, our investment
in Action formed 76% of our Private
Equity portfolio value. The business
has returned over £4.6 billion of
proceeds over our holding period.
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“In FY2025, we generated a total
return on shareholders’ funds of
£5,049 million, or 25%, ending the
year with a NAV per share of 2,542
pence. This is the fifth consecutive
year we have delivered a total return
over 20%; over this same period, our
average annual total return was 30%.”
Simon Borrows
Chief Executive
Long-term performance
Since our restructuring in June 2012, our NAV per share
has increased by over 800%, rising from 279 pence at
31 March 2012 to 2,542 pence as of 31 March 2025.
Over this same time period, in absolute terms, we have
generated over £25 billion of total return. This exceptional
growth reflects the strength and consistency of our
strategy of allocating a significant portion of our capital
over a number of years into our best assets, whilst also
investing capital in sectors in which we have significant
expertise and a proven track record. Our long-term hold
investments, Action and Royal Sanders, are delivering
sustainable, long-term compounding growth, whilst a
number of our other larger portfolio companies in the
consumer and private label and healthcare sectors are
either already beginning to show similar characteristics
or have the potential to achieve this outcome. This
positions the Group well to sustain attractive NAV
growth over the long term.
NAV per share 31 March 2012 – 31 March 2025
FY2025 was another successful year for 3i,
continuing our track record of consistently
delivering strong shareholder returns,
against what remains a challenging macro-
economic and geopolitical backdrop.
Our FY2025 result was underpinned by
the powerful compounding growth from
our long-term hold assets Action and
Royal Sanders, and by the performance
of several other larger portfolio companies.
This reinforces our conviction in allocating
additional capital to our best
performing assets.
Amid some improvement in private market
transaction activity, we maintained a highly
selective and disciplined investment
approach, strategically deploying capital
into several existing and new portfolio
companies. We also executed a number
of strong realisations across Private Equity
and Infrastructure, which met or exceeded
our target money multiple return of 2x.
Overview and strategy
Chief Executive’s
statement
3i Group plc | Annual report and accounts 2025
6
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Action continued to be the main driver of the Group’s overall financial
performance in FY2025, underpinned by another excellent year of
earnings growth, substantial cash generation and strategic expansion.
This result was particularly impressive, as the business operated
against a backdrop of muted economic growth across many of its
markets. As a result of this strong performance Action undertook
another refinancing and pro-rata buyback exercise, returning
significant proceeds to 3i. 3i, in turn, recycled a portion of these
proceeds into further Action equity. Additionally, we completed the
final payment of the associated carried interest liability, ensuring that
the full economic benefit of Action’s performance is now passed
through to shareholders with no dilution. Royal Sanders, our other
long-term hold asset, continued its impressive trajectory of organic
growth, coupled with further value-accretive bolt-on acquisitions.
Our proprietary capital model and disciplined balance sheet strategy
offer a distinct competitive advantage in navigating an increasingly
complex macro-economic and geopolitical landscape. We have
remained extremely disciplined in capital deployment, completing three
new Private Equity investments in sectors that we know well. We also
continued our focus on deploying capital into some of our most
successful portfolio companies. Our Private Equity portfolio companies
remained acquisitive, completing 12 bolt-on acquisitions.
In Infrastructure, 3iN completed a strong realisation at a money multiple
of 3.6x, two sizeable refinancings and further investments across two
portfolio companies, whilst our North American Infrastructure Fund
(“NAIF”) completed three bolt-on acquisitions through existing
portfolio companies.
We generated total realised proceeds and portfolio income of
£2.4 billion across our portfolios in FY2025, including £1.6 billion of
total refinancing and dividend proceeds from Action and two strong
Private Equity realisations, both at sterling money multiples of 2x
or greater.
Private Equity performance
In the year to 31 March 2025, our Private Equity portfolio, including
Action, generated a GIR of £5,113 million, or 26% on opening value
(2024: £4,059 million or 25%). In the last 12 months (“LTM”) to the
end of 31 December 2024, 97% of our portfolio companies
by value grew earnings.
Long-term hold portfolio companies
Action
Action generated a GIR of £4,551 million, or 32%, on its opening value.
Action, Europe’s fastest-growing non-food discount retailer and our
largest portfolio company, delivered strong growth in 2024,
underpinned by its customer-centric value-for-money proposition.
Action’s commitment to consistently share the benefits of scale with
customers, through highly competitive pricing and a dynamic and
flexible product assortment, enabled the business to reduce prices
across 2,000 products in 2024. As a result, Action maintained, and in
a number of markets increased, its price advantage over its
competitors in 2024.
Overview and strategy
Chief Executive’s statement continued
3i Group plc | Annual report and accounts 2025
7
Action had 2,967 stores across 12
European countries at the end of
March 2025, and is making good
progress across its more recent expansion
markets, Italy, Portugal and Spain.
Pages 20-23
Read more about Action
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In the 12 months to 29 December 2024, Action generated net sales
of €13,781 million (2023: €11,324 million) 22% ahead of 2023, and like-
for-like (“LFL”) sales growth of 10.3% (2023: 16.7%). Transaction
volumes accounted for 102% of the LFL sales growth over the year as
the business benefitted from new customer gains and more frequent
visits from existing customers. Operating EBITDA was €2,076 million
(2023: €1,615 million) in 2024, 29% ahead of 2023. Action’s improved
EBITDA margin of 15.1%, compared to 14.3% in the previous year,
reflects scale benefits and its continuous focus on cost control.
Action added 352 new stores in 2024, another store opening record,
taking its total store footprint to 2,918 at 29 December 2024. The
largest contributions to store growth in the year were from some
of Action’s more recent expansion markets, such as Italy and Spain,
which added 65 and 40 new stores respectively, whilst Action’s
newest country, Portugal, opened a further 10 stores. Importantly,
the payback period for new stores remains materially below one year.
Action’s estimate of additional white space potential, in existing and
identified in-scope countries, increased to c.4,850 stores, including
Switzerland, where the first store opened in April 2025.
In the first three periods of 2025 (P3 2025 ending 30 March 2025),
Action added a further 49 new stores, meaning the business had
2,967 stores across 12 countries at that date.
To support its vast and growing store network, Action continues to
invest in its IT infrastructure, systems and distribution channels. In
2024, the business opened two new distribution centres (“DCs”) in
Illescas, Spain and Altedo, Italy, increasing its DC network to 15
across Europe, with a further three new DCs planned for 2025.
Action also invested in a new enterprise resource planning (“ERP”)
system, which was successfully implemented at the end of 2024.
The implementation had a minor impact on store availability in the
first quarter of 2025 and the issues were resolved by March 2025.
Action continues to make good progress in delivering its
sustainability programme, which is focused on the four pillars
of people, planet, product and partnerships. It created over
10,000 jobs in 2024, and continues to invest in its people. It delivered
a 51% reduction of CO2 emissions from its own operations (Scope 1
and 2) against 2021 and 90% of its electricity is now sourced from
renewables. The business continues to improve its product circularity
and expand its community partnerships. For further details on
Action’s sustainability progress, see page 50-51.
Action continued to optimise its debt profile throughout the year.
In July 2024, it successfully completed a refinancing event with
proceeds used for a capital restructuring. The company raised
€2.1 billion equivalent of incremental term debt, comprising a
US$1.5 billion term loan and a €700 million term loan. At the same
time, it undertook a pro-rata share redemption, returning £1,164
million in gross proceeds to 3i. Alongside some existing LPs in the
3i 2020 Co-Investment Programme, 3i took the opportunity to
increase its ownership in Action. Including a subsequent small
purchase of an LP stake, 3i reinvested £768 million into Action,
increasing its gross equity stake from 54.8% to 57.9%.
In November 2024 and March 2025, Action completed leverage-
neutral amend-and-extend and repricing transactions across all
€6.6 billion of its senior-term debt facilities. This extended maturities
on €2,545 million of Action’s term debt and delivered approximately
€33 million in recurring annual interest cost savings.
Action’s conversion of EBITDA to free cash flow remains strong, with
cash conversion of 81% in 2024. The business made two dividend
distributions to all shareholders in December 2024 and March 2025,
returning £433 million to 3i. In total, 3i received over £1.6 billion in
cash from Action in FY2025. After paying the dividends, Action had
a cash balance of €347 million as of 30 March 2025 and a net
debt-to-run-rate earnings ratio of 2.7x.
Overview and strategy
Chief Executive’s statement continued
3i Group plc | Annual report and accounts 2025
8
Royal Sanders, our other Private Equity
long-term hold asset, delivered very
strong organic and acquisitive growth
in the year, completing two further
bolt-on acquisitions.
Page 24
Read more about Royal Sanders
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At 31 March 2025, we valued our 57.9% stake in Action at £17,831
million. This valuation reflects the continued strong growth in Action’s
LTM run-rate EBITDA, its low leverage and an unchanged LTM run-
rate EBITDA valuation multiple of 18.5x, net of the liquidity discount.
Further detail on the Action run-rate EBITDA methodology can be
found on page 31. We benchmark our long-term, through-the-cycle
view on Action’s multiple against a broad peer group of discounters,
with a higher weighting towards the top quartile subset of North
American value-for-money retailers, noting that Action’s operating
KPIs continue to be better than those of its peer group.
In the first three periods of 2025, Action delivered net sales of €3,521
million and operating EBITDA of €464 million, both 17% ahead of the
same period last year, primarily driven by the increased volume of
transactions. LFL sales growth was 6.2% and the operating EBITDA
margin was 13.2%.
Royal Sanders
Showing its strategic potential, Royal Sanders generated strong
performance in 2024, driven by volume growth and prior bolt-on
acquisitions, including Karium which completed earlier in the year.
At the end of FY2025, Royal Sanders completed the acquisition of
Treaclemoon, an established UK-based value-for-money personal
care brand with a strong strategic fit with its existing portfolio of
brands. This was Royal Sanders’ eighth bolt-on acquisition since
3i’s investment. These strategic acquisitions, combined with strong
operational execution, have contributed significantly to
Royal Sanders' performance and success.
Private Equity portfolio companies
During the year, we refined our Private Equity sector-led investment,
origination and active management approach, aligning our resources
to focus on the consumer and private label, healthcare, industrial and
services and software sectors.
Healthcare portfolio companies
Cirtec Medical delivered strong top-line growth in 2024, fuelled by
increasing customer demand across its product portfolio and
enhanced operational efficiency. The business made good progress
on several key initiatives in the year and maintains a robust pipeline
of new opportunities across its target markets.
The broader bioprocessing market experienced an anticipated
recovery in demand through the second half of 2024 and into the first
quarter of 2025, as post-pandemic destocking subsided. Against this
backdrop, SaniSure saw a solid rebound in bookings while also
making substantial progress on multiple strategic initiatives
and investing to strengthen its long-term market position.
Our contract development and manufacturing organisation
(“CDMO”) ten23 health is making good progress in establishing
itself as a significant presence in the pharmaceutical industry.
We continued to support this platform, investing a further
£54 million in FY2025. The remaining business of Q Holding,
Q Medical Devices, also performed well in the year.
Consumer and private label portfolio companies
European Bakery Group ("EBG") maintained resilient performance
during the year, despite persistent pressures on input pricing and
wage inflation. Following robust cash generation, EBG returned
£22 million to 3i within 12 months of its additional investment in
support of the acquisition of coolback in 2023.
Audley Travel performed strongly across its US and UK markets in
2024. Its order book into 2025 is strong, albeit we are monitoring the
impact on US travel sentiment, following heightened uncertainty in
US policy. MPM continued to grow well across its markets in 2024.
Whilst MPM has a significant presence in the US, we expect the
business to be able to mitigate the impacts of current proposed
changes in US tariffs.
Mepal delivered encouraging performance across its omnichannel
offering and Luqom made good progress in operational and financial
delivery in 2024 and continues to win market share in a relatively
subdued market. The prolonged impact of low discretionary
consumer confidence continued to impact the franchisee base in
some countries for BoConcept for the majority of 2024. Recent order
intake in the final quarter of 2024 and into the start of 2025 has been
more stable.
Industrial portfolio companies
After a challenging 2023, Tato’s sales volumes and profitability
recovered well in 2024, despite relatively muted demand across its
end-markets and a more challenging competitive environment.
The business continues to generate a good level of cash flow, and
returned a further £13 million of dividends to 3i in FY2025, meaning
we have received £75 million in total dividend distributions over the
last seven years. AES delivered another year of consistent financial,
strategic and operational performance, as a result of increased
demand in energy and industrials, its most prominent markets.
The business continued to target strategic acquisitions, completing
two bolt-on acquisitions in FY2025, and also returned dividends of
£4 million to 3i. Dynatect’s performance was stable, despite delays
in the ramp-up of a significant contract.
Overview and strategy
Chief Executive’s statement continued
3i Group plc | Annual report and accounts 2025
9
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Services and software portfolio companies
Against a fairly muted third-party maintenance (“TPM”) market,
Evernex saw a positive TPM top-line performance in 2024 and
remains well positioned for an anticipated normalisation of market
conditions in the near term. Also operating in the IT services market,
MAIT’s 2024 outcome was resilient despite a more cautious climate
among customers. The business completed another three bolt-on
acquisitions in FY2025, taking its total to 13 since we first invested in
2021. Since our investment in xSuite in 2022, the business has made
good progress in its development towards a SaaS model. During the
year, we invested £5 million to support xSuite’s bolt-on acquisition of
tangro, which is also performing well.
Due to persisting market uncertainty, the expected recruitment
process outsourcing market recovery has not yet materialised.
As a result, Wilson continued to see significant challenges across its
markets. Although the business continues to generate new wins and
optimise its operations, we expect the near term to remain difficult.
We invested £6 million to support the business during the year and
recognised an unrealised value reduction of £88 million.
Private Equity investment
The Private Equity transaction market saw a steady improvement in
2024 driven by easing debt markets and stabilising interest rates.
Our investment approach remained disciplined and consistent,
as we continued to use our network and local expertise to source
high-quality, well-priced opportunities, including value-enhancing
bolt-on acquisitions for our portfolio companies.
In addition to the reinvestment in Action, in FY2025 we completed
three new private equity investments totalling £318 million. We
invested £121 million in WaterWipes, a global, premium, limited
ingredient wet wipe brand, reinforcing our strategy of backing
international branded consumer businesses. Our £98 million
investment in Constellation, a specialist in hybrid cloud and
cybersecurity managed services, aligns with our focus on IT services.
We have a long and successful investment track record in inspection
and testing, and we were pleased to invest £99 million in OMS
Prüfservice, a leading provider of electrical testing services for
B2B customers in the DACH region.
Across the Private Equity portfolio, we completed 12 bolt-on
acquisitions in the year for six portfolio companies, the majority
of which were self-funded.
Read more about our investment activity starting on page 25
Private Equity realisations
We completed two significant realisations during the year,
generating total proceeds of £659 million. Since acquiring nexeye in
2017, the company has driven growth both organically and through
a buy-and-build strategy, expanding its store base from approximately
400 to over 700 across five countries. As a result, both sales and
EBITDA doubled under our ownership. This realisation, which
completed in July 2024, delivered a modest profit over its 31 March
2024 valuation, generating proceeds of £382 million. When combined
with distributions received during our ownership, this resulted in a
sterling money multiple of 2.0x.
We also completed the realisation of WP, an asset we had held since
2015. Throughout our ownership, we supported its international
growth strategy by expanding into new product categories and
executing four bolt-on acquisitions, nearly doubling its EBITDA.
The transaction generated total proceeds of £280 million, including
interest income of £3 million, reflecting an 18% profit over its 31
March 2024 valuation. Including the £45 million received earlier in our
ownership period, this resulted in a sterling money multiple of 2.2x.
Read more about our realisation activity starting on page 25
Infrastructure performance
In the year to 31 March 2025, our Infrastructure portfolio generated a
GIR of £52 million, or 3% on the opening portfolio value (2024: £99
million, 7%) reflecting good performance from our infrastructure
funds and increased dividend income primarily from 3iN. However,
this result was significantly impacted by 3iN’s share price
performance that continues to underwhelm, with a decrease of 3%
in the year to 318 pence at 31 March 2025, even though the
underlying 3iN portfolio continues to trade well and deliver strong
realisations, at good uplifts to opening value.
In the year to 31 March 2025, 3iN generated a total return on opening
NAV of 10.1%, again exceeding its 8 to 10% return objective, and
delivered its dividend target of 12.65 pence, a 6.3% increase on last
year. 3iN’s underlying portfolio continues to benefit from its exposure
to long-term sustainable growth trends.
Our proprietary capital investment in Smarte Carte achieved record-
high revenue and EBITDA in 2024, driven by strong performance
across its business segments. Notably, the company's new long-term
carts contract at London’s Heathrow Airport performed well.
Overview and strategy
Chief Executive’s statement continued
3i Group plc | Annual report and accounts 2025
10
We continued to advance our
sustainability agenda, focusing
on climate change.
Pages 39–68
Read more on sustainability
Contents
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Scandlines performance
The performance of Scandlines was resilient in FY2025, and our
investment generated a GIR of £46 million, or 9% of opening portfolio
value (2024: £10 million, 2%). Leisure revenues were strong, whilst
freight volumes were softer compared to the prior year. The business
continued to be cash generative and returned £22 million of
dividends to 3i. Since our reinvestment in 2018, we have received
£232 million of total distributions.
Sustainability
We continue to make good progress on our climate agenda. Our
science-based targets, which cover our direct GHG emissions and
those associated with our portfolio, were approved by the SBTi in
March 2024. We are particularly pleased with the progress we made
in FY2025 towards the achievement of our portfolio engagement
target, which involves 3i using its influence to encourage portfolio
companies to set their own science-based targets. Seven of our
portfolio companies across 3i Group and 3iN have now set approved
science-based targets. Notably, Action had its near-term science-
based targets approved in February 2025.
We continue to refine our assessment of climate-related risks and
opportunities in our investment and portfolio management
processes. This helps us support portfolio companies in positioning
themselves on the right side of climate transition, while safeguarding
3i and its portfolio companies from a broad range of operational,
commercial and reputational risks. In addition to our focus on
climate-related issues, we have also improved our assessment of
nature considerations within our portfolio, alongside our continued
focus on human rights.
Charitable donations
3i continues to support charities which relieve poverty, address
homelessness, promote education and youth development and
support elderly and disabled people. We donated £1.2 million across
these initiatives as part of our ordinary charitable activities. Our
portfolio companies also supported a variety of charities relevant
to them and their operations, with donations totalling £4.8 million.
Balance sheet and foreign exchange movement
Our proprietary capital strategy affords us the benefit of agility
in capital deployment and flexibility in holding periods, which puts
us in a good position to optimise returns over the long term.
We successfully executed the final payments of the carried interest
liability related to Action, totalling £428 million over the year. This
marks an important milestone for the Group and our shareholders,
eliminating a substantial financial obligation from the balance sheet
and ensuring that going forward, Action’s returns flow through to
shareholders with no dilution.
We ended FY2025 with net debt of £771 million and 3% gearing, after
returning £625 million of cash dividends to shareholders in the year
and with liquidity, including our undrawn RCF, of £1,323 million. We
remain disciplined on costs and generated an operating cash profit
of £469 million in the year, or £36 million excluding dividends
received from Action. Due to the strengthening of sterling against
the euro and US dollar in the year, we recorded a total foreign
exchange translation loss of £259 million (March 2024: £316 million
loss), including a gain on foreign exchange hedging of £82 million
(March 2024: £116 million gain).
In April 2025, we increased the notional value of the Group’s Euro
foreign exchange hedging programme by €400 million, securing
favourable rates, taking our total Euro hedge to €3.0 billion.
Outlook
We expect the market environment in FY2026 to remain complex,
with heightened geopolitical uncertainty as major economies
respond to changes in US policy.
Over many years we have deliberately allocated our capital into
some of our best performing assets, such as Action and Royal
Sanders, as well as assets in sectors such as value-for-money, private
label consumer, healthcare and infrastructure, all of which have
proven their resilience over many years of market shocks and
headwinds. This provides us with confidence in the overall portfolio’s
ability to continue to operate effectively through volatile conditions
and generate resilient returns for our shareholders. Similarly, over
the same period of time, our policy of taking a long-term view on
valuation multiples has been consistently applied across market
peaks and troughs. This approach remains very relevant in the
current market conditions.
We expect transaction activity across the private market to be
slower over the near term given the increased macro-economic and
geopolitical uncertainty. We will maintain our pricing discipline and
continue to be highly selective across new investment and realisation
opportunities as we continue to optimise long-term value growth for
our shareholders.
We remain confident in our ability to compound growth across the
portfolio in the years to come, and I would like to close by thanking
the team at 3i and the teams in our portfolio companies for another
year of strong performance.
Simon Borrows
Chief Executive
14 May 2025
Overview and strategy
Chief Executive’s statement continued
3i Group plc | Annual report and accounts 2025
11
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We adopt a thematic approach to origination and portfolio
construction, backing businesses that benefit from structural
trends which can support long-term sustainable growth.
Value-for-money
and discount
The last decade has seen a significant shift
towards value concepts, shaped by
economic and behavioural forces.
Macro-economic pressures, including inflation and wage stagnation,
have combined with the emergence of efficient discount retailers
that can deliver quality essentials at a good price and with the
subsequent rise of the ‘smart shopper’ to underpin a significant shift
to value concepts. Amid increasing uncertainty, consumers remain
discerning and continue to seek quality at a good price, sometimes
at the expense of brand loyalty. We believe that these behaviours,
which were further embedded during the recent cost of living crisis,
will endure, as shown by consumer behaviour during and in the
immediate aftermath of the 2007-2008 financial crisis.
3i response
Value-for-money and discount has long been a winning theme
for our Private Equity portfolio. We highlight a few examples here.
Action has grown from a focus on its Dutch home market to a
pan-European discount retailer by providing a good-quality and
surprising assortment of products, including many everyday
necessities, at a very low price.
Royal Sanders, a private label and contract manufacturer of personal
care products, is growing strongly by offering products at a variety
of price points to a broad range of customers, including value
retailers. European Bakery Group, which produces bake-off bread
and snack products for food retailers and foodservice customers,
benefits from similar dynamics.
Energy transition, energy
security and resource scarcity
The response to climate change and other
environmental issues is a defining theme
of our time.
The transition towards a low-carbon economy is gathering pace
in some countries, leading to increased demand for cheaper
electricity and associated services. At the same time, natural
resources are growing more scarce and governments, businesses
and consumers are focusing on developing and supporting more
sustainable consumption models, which embed more circularity
and shared resources and offer significant cost benefits.
3i response
We have exposure to this theme in our Infrastructure business,
with investments in businesses like Infinis, which generates
renewable energy, Herambiente, which sorts and recycles waste
and generates power from the waste that cannot be recycled,
and Future Biogas, one of the UK’s largest anaerobic digestion
plant developers and biogas producers.
TCR, also in our Infrastructure portfolio, provides pooled ground
support equipment at airports, reducing the amount of
equipment required.
A number of our Private Equity portfolio companies are making
investments in the circular economy theme, either by adapting
their business models or by offering products or services that
directly support a circular economy model. For example, Evernex
repairs, reuses and recycles IT equipment to extend its lifespan,
therefore supporting clients in reducing their carbon emissions.
Overview and strategy
Our thematic approach
to investment
3i Group plc | Annual report and accounts 2025
12
Pages 20-23
Read more about Action
Contents
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Digitalisation, digital
transformation and big data
Digital transformation leverages data to drive
innovation and efficiency, enhance decision-
making, and enable sustainable growth.
Technology is developing rapidly and changing business operating
models across many sectors. Digitalisation is part of daily life,
extending to all spheres of human activity and interactions. It is also
intertwined with climate change and is a precondition to many of
the available decarbonisation pathways.
The rapid development of artificial intelligence is accelerating these
trends, creating opportunities not previously possible. However,
the benefits of this shift are not evenly distributed. Certain sectors
remain vulnerable to disruption, and segments of society risk being
left behind, highlighting the need for inclusive digital strategies.
3i response
We have been careful to select investments that benefit from this
theme, while avoiding areas likely to be impacted by disruption. In
our Private Equity portfolio, MAIT provides end-to-end
digitalisation solutions for manufacturing customers, offering
product lifecycle management, enterprise resource planning
software as well as managed services and cloud solutions. xSuite
provides accounts payable invoice process automation applications.
Evernex maintains IT equipment that is critical for customers’
business continuity. Luqom, VakantieDiscounter and Konges Sløjd
benefit from the ongoing shift to the online channel.
Our Infrastructure business is also exposed to this trend. Tampnet
operates an offshore communication network in the North Sea and
Gulf of Mexico; and FLAG (formerly Global Cloud Xchange) owns
one of the world’s largest subsea fibre optic networks.
Demographic
and social change
Ageing populations are projected to
cause significant social disruption in our
investment markets.
Increasing life expectancy and reduced birth rates in most
of our core markets are resulting in ageing and often declining
populations, as well as issues stemming from growing generational
imbalances. These structural, long-term trends are profoundly
changing consumer behaviour and preferences, and are resulting
in policy responses and scientific research to meet the challenges
of greater longevity and the increasing prevalence of age-related
chronic illness.
3i response
Our Private Equity healthcare investments, including Cirtec Medical,
an outsourced medical device manufacturer, as well as SaniSure
and ten23 health, which deliver products and services to the
biopharmaceutical and life sciences industry, provide solutions to
the disruption caused by an ageing population and by scientific
breakthroughs making more advanced medical and pharmaceutical
treatments possible. Ionisos, in our Infrastructure portfolio, provides
cold sterilisation services to the medical and pharmaceutical
industries, amongst others.
Some of our portfolio companies with a consumer focus are also
exposed to this trend. Audley Travel caters to an older and
wealthier demographic cohort that is becoming more dominant.
Konges Sløjd and WaterWipes, on the other hand, have developed
their offering to appeal to the rising middle classes and older
parents having higher disposable income when they reach
parenthood.
Overview and strategy
Our thematic approach to investment continued
3i Group plc | Annual report and accounts 2025
13
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We aim to compound value over time by investing in mid-market
companies to create a diverse portfolio and by holding our best
investments over the longer term.
What enables us to create value
Sectors
Private equity
Consumer &
Private Label
Healthcare
Industrial
Services
& Software
Infrastructure
Communications
Energy
Social Infrastructure
Transport/Logistics
Utilities
Overview and strategy
Our business model
3i Group plc | Annual report and accounts 2025
14
Our strong values and
institutional culture
We promote a strong culture of integrity among our
employees and embed that culture in our policies
and processes.
Our people
The recruitment, development and retention
of a capable and diverse team is fundamental
to our success.
223
people
22
nationalities
Our investment approach
Permanent capital and long-term
stewardship
Our proprietary capital affords us a medium
to long-term investment horizon. We aim to
compound our proprietary capital value through
conviction in our best investments.
Careful portfolio construction
We approach portfolio construction with great
care, with a focus on resilience across market
cycles and target sectors and regions where
we have deep expertise, strong networks, and
a proven track record.
Our strategy remains flexible, adapting to market
shifts, regulatory changes, and broader societal
and environmental trends. We screen investment
opportunities against our Responsible Investment
policy and embed an assessment of sustainability
risks and opportunities across our investment and
portfolio management processes. We have been
signatories to the UN Principles of Responsible
Investment since 2011.
Pages 42-51
Invest responsibly
Active asset management
We engage with portfolio companies’ management
teams to manage risks and invest in initiatives that
support long-term sustainable growth. We have
majority or significant minority stakes in our core
portfolio companies and are represented on their
boards. We therefore have the influence to drive
long-term, sustainable growth in our portfolio.
Thematic origination
Our Private Equity and Infrastructure teams invest
in businesses supported by long-term structural
growth trends.
Global network
We have had local teams on the ground across
the UK, continental Europe and the US for many
decades, which have built strong networks within
their local business communities. We view diversity
as a strength and a plurality of perspectives
enhances our origination, value creation and
decision making.
Our brand and reputation
As an investment company with a history of 80 years,
our brand strength and long-term approach
underpin our reputation as a responsible investor
and business.
80 years
history
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We aim to at least cover our cash operating costs with cash
income from our portfolios and from fund management fees
generated by our Infrastructure business.
Overview and strategy
Our business model continued
3i Group plc | Annual report and accounts 2025
15
Grow
We create value
from the portfolio
through active asset
management and organic
and acquisition growth
Long-term
hold
We may decide to hold a portfolio
company over a longer time period,
to capitalise on its compounding
growth and cash yield via
refinancing and dividends
How we create value
Who benefits
Shareholders
Our model is capable of delivering mid-teen returns to shareholders through
the investment cycle
Portfolio companies
We work in close partnership
with our portfolio companies
to provide expertise and
support, enabling them to
grow sustainably and to
contribute positively to the
communities in which they
operate
Our people
Our people are our most
important resource. We
foster the professional
development and
wellbeing of our
employees
25%
Total return
on opening
shareholders’
funds in FY2025
73.0p
Dividend
per share
for FY2025
0.4%
Operating costs
as a percentage
of our FY2025 AUM
Realise
We work with our
portfolio companies
to grow them organically
and by acquisition to produce
strong cash flow and generate
at least a >2x return
on disposal
Invest
We typically make four to seven
new Private Equity
investments each year, and
support the development
of our Infrastructure
business
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Key performance indicators1,2,4
Gross investment return (“GIR”)
as % of opening portfolio value
The performance of the proprietary
investment portfolio expressed
as a percentage of the opening
portfolio value.
Link to strategic objectives
NAV per share
The measure of the fair value per share
of our investments and other assets
after the net cost of operating the
business and dividends paid in the year.
Link to strategic objectives
Cash realisations5
Support our returns to shareholders,
as well as our ability to invest in
new opportunities.
Link to strategic objectives
2021
2022
2023
2024
2025
2021
2022
2023
2024
2025
2021
2022
2023
2024
2025
l
Cash realisations
l
Proceeds received from Action’s capital restructuring (FY2024)
l
Proceeds received from Action’s capital restructuring (FY2025)
FY2025 progress and FY2026 outlook
• Group GIR of 24%, driven by £4,839 million
of unrealised value growth and £600 million
of portfolio income
• Private Equity GIR of £5,113 million, or 26%,
predominantly driven by Action’s GIR of
£4,551 million
• Infrastructure GIR of £52 million, or 3%,
reflecting 3iN dividend income and
performance across our infrastructure funds,
offsetting weaker 3iN share price
performance
• Scandlines GIR of £46 million, or 9%,
reflecting resilient performance in the year
and cash distributions
• Our portfolios have started FY2026 with
good momentum
FY2025 progress and FY2026 outlook
• 22% increase in NAV per share to 2,542
pence (31 March 2024: 2,085 pence), after
payment of 65 pence dividend per share in
the year
• Our portfolios have started FY2026 with
good momentum
FY2025 progress and FY2026 outlook
• Cash proceeds of £1,841 million including
£1,164 million of proceeds received from
Action’s capital restructuring and £659
million from the realisations of nexeye and
WP
• Realisations and refinancings in FY2026 are
subject to supportive market conditions and
to portfolio company performance
remaining resilient
Overview and strategy
Strategic
objectives
Grow investment
portfolio earnings
Realise investments with
good cash-to-cash returns
3i Group plc | Annual report and accounts 2025
16
£1,164m
£677m
£757m
£126m
26%
43%
36%
23%
24%
947p
1,321p
1,745p
2,085p
2,542p
£319m
£758m
£885m
£883m
£1,841m
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Cash investment
Identifying and investing in new and
further investments is a key driver
of the Group’s ability to deliver
attractive returns.
Link to strategic objectives
Operating cash profit3
By covering the cash operating cost
of running our business with cash
income, we reduce the potential
dilution of capital returns.
Link to strategic objectives
Total shareholder return
The return to our shareholders through
the movement of the share price and
dividends paid during the year.
Link to strategic objectives
2021
2022
2023
2024
2025
l
Investment
l
Action reinvestment (FY2024)
l
Action reinvestment (FY2025)
2021
2022
2023
2024
2025
l
Action dividend
l
Other
2021
2022
2023
2024
2025
l
Dividends
l
Share price
FY2025 progress and FY2026 outlook
• Invested £1,182 million, including the
£768 million reinvestment into Action and
£318 million across three new investments
• Completed 12 bolt-on acquisitions for the
Private Equity portfolio, one of which, for
xSuite, we supported with further
investment of £5 million
• Solid pipeline of new investment
opportunities and bolt-on acquisitions
FY2025 progress and FY2026 outlook
• Generated total cash income of £598 million
(2024: £594 million) of which £470 million
(2024: £456 million) is from Private Equity,
£106 million (2024: £113 million) from
Infrastructure and £22 million from
Scandlines (2024: £25 million). Private Equity
includes £433 million of dividends from
Action (2024: £375 million)
• Cash operating expenses of £129 million
(2024: £127 million)
• Good cash income expected to continue
from Action, Infrastructure and Scandlines
FY2025 progress and FY2026 outlook
• TSR of 31% driven by a share price increase
of 29% and by dividend payments of 65.0
pence in the year
• Strong balance sheet supports a total
FY2025 dividend of 73.0 pence per share
1
A number of our KPIs are calculated using financial information which is not defined under IFRS and therefore they are classified as APMs. Further details on these APMs are included in our Financial review on page 79.
2
Further information on how these KPIs are factored into decisions concerning the Executive Directors’ remuneration is included in the Directors’ remuneration report on page 135.
3
Cash operating expenses includes lease payments.
4
Key risks which could potentially impact the respective KPIs can be found on pages 88 to 93, which summarise the Group's current principal risks.
5
Realised proceeds may differ from cash proceeds due to timing of cash receipts. During the year, Private Equity recognised £1,827 million of realised proceeds, of which £1 million related to withholding tax. In addition, £5 million
of cash proceeds were received, which had been recognised as realised proceeds in FY2024.
Overview and strategy
Key performance indicators continued
Maintain an
operating cash profit
Use our strong
balance sheet
Increase shareholder
distributions
3i Group plc | Annual report and accounts 2025
17
£768m
£414m
£325m
£39m
£284m
£56m
£375m
£92m
5%
46%
4%
20%
6%
21%
2%
29%
4%
67%
£455m
£138m
£433m
£36m
£510m
£543m
£397m
£593m
£1,182m
£23m
£340m
£364m
£467m
£469m
51%
24%
27%
71%
31%
Contents
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What’s in this section
Private Equity
19
Infrastructure
35
Scandlines
38
3i Group plc | Annual report and accounts 2025
18
Business
review
Contents
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At a glance
Gross investment return
£5,113m
or 26%
(2024: £4,059m or 25%)
Cash investment
£1,177m
(2024: £556m)
Realised proceeds
£1,827m
(2024: £866m)
Portfolio dividend income
£450m
(2024: £439m)
Portfolio growing earnings
97%¹
(2024: 93%)
Portfolio value
£23,558m
(2024: £19,629m)
1
LTM adjusted earnings to 31 December 2024. Includes 30 portfolio companies.
We invest our proprietary capital in mid-
market businesses headquartered in
Europe and North America. Once invested,
we work closely with our portfolio
companies to deliver ambitious growth
plans and aim to compound value from our
best investments over the longer term.
Against a complex and uncertain macro-economic and geopolitical
environment across Europe and the US, our Private Equity portfolio
delivered a GIR of £5,113 million, or 26%, on the opening portfolio
value (2024: £4,059 million or 25%) in the year to 31 March 2025. This
return included a £273 million foreign exchange translation loss, net
of a gain from foreign exchange hedging.
Action had another very strong year and was the principal driver of
the return, generating GIR of £4,551 million or 32% of its opening
value. We also received significant realised proceeds from Action,
with a portion of these proceeds reinvested to acquire an additional
stake in the business. Our other long-term hold Private Equity asset,
Royal Sanders, delivered another year of strong organic and
acquisitive growth.
Across the remaining portfolio, a number of assets within the
consumer and private label sectors performed well and we saw an
encouraging trajectory for several of our healthcare assets. The
majority of our industrial assets continue to pay cash dividends and
performed well, whilst our services and software assets were largely
resilient against a difficult IT market backdrop. We saw
underperformance from a limited number of assets exposed to
weaker end markets.
We maintained disciplined pricing, completing three new
investments, invested further capital across several existing portfolio
companies and enhanced our existing portfolio through 12 strategic
bolt-on acquisitions. In addition to proceeds received from Action, we
also generated significant realised proceeds from the exit of two
portfolio companies at money multiples of 2x or greater.
Overall, the Private Equity portfolio value increased to £23,558 million at
31 March 2025 (31 March 2024: £19,629 million).
Table 1: Gross investment return for the year
to 31 March
Investment basis
2025
£m
2024
£m
Realised profits over value
on the disposal of investments
50
–
Unrealised profits on the revaluation
of investments
4,803
3,874
Dividends
450
439
Interest income from investment portfolio
69
80
Fees receivable
14
7
Foreign exchange on investments
(340)
(437)
Movement in fair value of derivatives
67
96
Gross investment return
5,113
4,059
Gross investment return as a %
of opening portfolio value
26%
25%
Business review
Private Equity
3i Group plc | Annual report and accounts 2025
19
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Building great
businesses with
long-term sustainable
growth potential
Action, the fastest growing non-food discount retailer in
Europe and our largest portfolio company, had stores in
12 countries, employed 79,681 people and generated
annual revenue of €13.8 billion in 2024. Action continues
to invest in its systems and organisation to support its
volume-driven growth and future ambitions.
Customer-centric approach
‘Always the lowest price’ is central to Action’s
customer value proposition. On average
18.7 million customers visit Action stores
each week, driven by Action’s range of
essential and surprise assortment of good
quality products, at the lowest prices.
In 2024, Action continued to reduce its
prices, with 2,000 price reductions across its
assortment. Two thirds of its products
retailed at a price point of less than €2, and
the business has largely maintained or
increased its price position against its
competitors across its markets.
Action also has a comprehensive programme
of store relocation, enlargement and
refurbishment to maintain and enhance its
customers’ shopping experience.
Good quality products
Action has a simple, efficient, and scalable
operating model. It offers 6,000 products
across 14 categories, with two thirds of the
assortment changing frequently.
Action’s continuous investment in quality has
resulted in a number of award-winning
private label products in 2024 and early 2025.
Business review
Private Equity continued
3i Group plc | Annual report and accounts 2025
20
352
Stores added
during 2024
10,641
New jobs created
during 2024
18.7m
Average number of customers
that visited Action stores
every week
during 2024
Case study: Consumer
& Private Label
For more information
company.action.com
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231
284
341
426
515
607
718
873
1,155 1,506
2,034
2,675
3,418
4,216
5,114
5,637
6,834
8,859
11,324
13,781
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
20
27
32
39
49
71
86
99
128
166
232
310
387
450
541
616
828
1,205
1,615
2,076
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Business review
Private Equity continued
3i Group plc | Annual report and accounts 2025
21
Net sales1
€m
Operating EBITDA1
€m
+21%
CAGR
3i buyout
+26%
CAGR
3i buyout
+28%
CAGR
+28%
CAGR
Source: Company information
1
Including impact of 53rd week in 2015 and 2020.
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International store roll-out
At 29 December 2024, Action had a total of 2,918 stores across 12
countries, after adding 352 stores during the year. In April 2025,
Action opened its first store in Switzerland and plans to open stores
in Romania later in the year. Action has significant further growth
opportunities, with the latest estimate of potential new stores
totalling approximately 4,850 across both existing and new markets
in Europe.
Geographical spread of stores, distribution centres and hubs1
at 29 December 2024
Investment in future growth
Action continued to invest in its distribution network in 2024, with
the addition of two new distribution centres in Italy and Spain. At
the end of 2024, Action had 15 distribution centres and three hubs
across Europe, with three new distribution centres planned in 2025.
In 2024, Action successfully implemented a new ERP system
and started the ‘Fit-For-Growth’ programme to define a scalable,
simple and efficient future international organisation.
People
Action is a large employer, with 79,681 employees across its stores,
distribution centres and offices at the end of 2024. The business
created 10,641 jobs in 2024 and continues to invest in the ongoing
development and engagement of its employees, with over 3,507
internal promotions and over 292,000 training hours delivered
across its workforce in 2024.
1
Action opened its first store in Switzerland in April 2025 and therefore has stores in 13 countries.
Digital
On a weekly basis, an average of 13.6 million customers use the
Action app and visit the Action website, providing a multi-channel
touchpoint for customers to conduct their research online and then
continue their journey with in-store purchases. Action has a
comprehensive technology roadmap for the next five years which
will act as a key enabler of its growth plans.
Partnership
In 2024, Action’s support for its charity partners and other
donations totalled €2.6 million. Action continues to work with its
long-term international partners, SOS Children’s Villages and the
Johan Cruyff Foundation. The Action Scholarship Fund provided
financial support to 179 Action families in 2024.
Sustainability
Action made further progress in the implementation of its
sustainability programme in 2024. Further information is available
in the Sustainability section of this report on pages 50 and 51.
Business review
Private Equity continued
3i Group plc | Annual report and accounts 2025
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1,716
1,983
2,263
2,566
2,918
2020
2021
2022
2023
2024
Number of stores
Netherlands
418
stores and 2 DCs
Belgium/Luxembourg
233
stores
Germany
585
stores and 2 DCs
France
859
stores, 5 DCs
and 2 hubs
Portugal
10
stores
Spain
66
stores and 1 DC
Poland
387
stores, 3 DCs and 1 hub
Czech Republic
83
stores
Slovakia
28
stores and
1 DC
Austria
117
stores
Italy
132
stores, 1 DC
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Action financial metrics
Last 12 periods to P12 2024 (2023)
First three periods to P3 2025 (2024)
Net sales
Operating EBITDA
Operating EBITDA margin
LFL sales growth
Business review
Private Equity continued
3i Group plc | Annual report and accounts 2025
23
€11,324m
€13,781m
2023
2024
€3,004m
€3,521m
2024
2025
€1,615m
€2,076m
€397m
€464m
14.3%
15.1%
13.2%
13.2%
16.7%
10.3%
9.8%
6.2%
2023
2024
2024
2025
2023
2024
2024
2025
2023
2024
2024
2025
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3i Group plc | Annual report and accounts 2025
24
Royal Sanders, our other long-term
hold asset, is a leading European
private label and contract
manufacturing producer of personal
care products. The business has
seven production facilities across
Europe and focuses on 10 major
consumer product categories.
Since our investment in 2018, we have supported Royal
Sanders’ successful international expansion strategy,
organically and by accessing new markets, with eight
bolt-on acquisitions which have contributed strongly to
its growth. As a best-in-class operator in its sector, the
business is also highly cash generative, returning a
total of £231 million in distributions to 3i over the
seven-year period.
Royal Sanders bolt-on activity in FY2025
Royal Sanders completed its acquisitions of Karium and
Treaclemoon in the year. Both companies are based in
the UK and have a strong strategic fit with Royal
Sanders’ existing brands business, enabling it to expand
its footprint in the personal care market.
Karium is a platform of established brands in the hair
care, body care and skin care categories. It serves a
broad range of major retailers across the grocery, value
and food, drug and mass merchandiser channels.
Treaclemoon is a value-for-money personal care brand
with a market presence of over 15 years. Its products are
sold through major UK retailers as well as through
international distributors.
Case study: Consumer
& Private Label
Year invested
2018
Location
Netherlands
For more information
www.royalsanders.com
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Investment and realisation activity
We maintained a selective and disciplined investment approach,
allocating £881 million to our existing portfolio companies and
£318 million across three new investments.
In July 2024, Action raised €2.1 billion through a refinancing event
and completed a capital restructuring with a pro-rata share
redemption. As a result, 3i received total proceeds of £1,164 million.
Alongside several existing LPs in the 2020 Co-Investor Programme,
3i took the opportunity to acquire an additional stake in Action.
Including a small subsequent purchase of an existing LP stake later in
the year, 3i reinvested £768 million, increasing its gross equity stake
from 54.8% to 57.9%.
In July 2024, we invested £98 million to acquire Constellation,
a hybrid cloud and cybersecurity managed services provider based
in France. In addition to Endexar, which was acquired on closing,
Constellation has completed three bolt-on acquisitions since our
investment and remains well positioned to be a key consolidator in
a fragmented French IT services market. In January 2025, we invested
£121 million for the acquisition of WaterWipes, a global, premium,
limited ingredient, natural wet wipe brand focused on the baby
category, with new product innovation in the adult category. Finally,
in February 2025, we completed the £99 million investment in OMS
Prüfservice, the largest specialised service provider in testing of
electrical systems and equipment for B2B customers in the
DACH region.
We invested a further £54 million in ten23 health, as we continue
to develop the CDMO platform and a further £39 million in
Royal Sanders. We also provided £6 million of capital to support
Wilson through challenging trading conditions. EBG returned £22
million of funding within 12 months of our investment to support its
acquisition of coolback in 2023.
Our buy-and-build strategy remains fundamental to the successful
delivery of the investment case for many of our portfolio companies.
In FY2025, we completed 12 bolt-on acquisitions across six portfolio
companies, with only one requiring additional 3i investment. Further
details of selected bolt-on acquisitions can be found on pages 24
and 27.
We completed two realisations in FY2025, generating total proceeds
of £659 million. In July 2024 we completed the sale of nexeye for
proceeds of £382 million, achieving a modest profit over its 31 March
2024 valuation. When combined with distributions received during our
investment period, this resulted in a sterling money multiple of 2.0x.
We also completed the realisation of WP in October 2024, delivering
total proceeds of £280 million which, including interest income of £3
million, represented an 18% premium to its 31 March 2024 valuation.
Including the £45 million received earlier in our ownership, this
resulted in a sterling money multiple of 2.2x. Further details for both
of these portfolio companies can be found on page 30.
In total, in the year to 31 March 2025, our Private Equity team
invested £1,177 million (2024: £556 million) and generated total
proceeds of £1,827 million (2024: £866 million).
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3i Group plc | Annual report and accounts 2025
25
WaterWipes is a global, premium,
natural wet wipe brand focused on
the baby and child category, with
new product innovation in the adult
category.
It has c.300 employees and is based in Drogheda,
Ireland. Its products are sold in over 50 countries,
with double-digit growth across both offline and
online channels.
Made from natural ingredients, WaterWipes’ superior-
quality wet wipes are globally accredited by skin health
and allergy institutions and endorsed by healthcare
professionals. This has earned the brand market-leading
levels of customer loyalty and advocacy, driving
consistent growth for over a decade.
WaterWipes is the clear premium-segment leader in the
c.€12 billion personal care wet wipes market, which is
forecast to grow strongly driven by increased hygiene
awareness post-Covid and demand for convenience.
3i will support the company’s growth, including its
expansion in the US, Europe and new markets.
Case study: Consumer
& Private Label
Year invested
2025
Location
Ireland
Investment
£121m
For more information
www.waterwipes.com
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3i Group plc | Annual report and accounts 2025
26
Case study: Services & Software
Year invested
2024
Location
France
Investment
£98m
For more information
www.constellation.fr
Constellation, founded in
2016 and headquartered
in Saint-Cloud, France,
is an IT managed services
provider specialised in
hybrid cloud and cyber
security, with c.780
employees and a national
footprint of 13 agencies.
It supports c.600 mid-sized customers by
managing their core IT infrastructure and
overseeing cyber security through its Security
Operations Centre.
The company has consistently delivered
double-digit organic growth, driven by a
strong value proposition and superior
service quality that helps retain and attract
new customers.
Constellation has completed 23 acquisitions
since 2016. Endexar, a provider of SAP
managed services, was acquired on closing
and since then, three further bolt-ons have
completed: ILKI, a cloud architecture
specialist; and Feelserv and Armonie, both
hybrid cloud managed service providers.
The business is well positioned to be a key
consolidator in a fragmented IT services
French market, and our investment will
enable it to further accelerate its growth,
both organically and through add-ons.
Case study: Services & Software
Year invested
2025
Location
Germany
Investment
£99m
For more information
www.oms-pruefservice.de
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3i Group plc | Annual report and accounts 2025
27
OMS Prüfservice (“OMS”),
is the largest specialised
service provider in testing
electrical systems and
equipment for B2B
customers in the
DACH region.
The business has over 900 employees and
operates in 43 locations across Germany,
Austria and Switzerland.
The company tests the electrical safety of
portable and fixed equipment in offices and
manufacturing facilities, as well as e-mobility
infrastructure and photovoltaic systems. Its
fully tailored proprietary software platform,
INSPEKTRA, enables it to digitalise and
automate its testing processes, maximising
efficiency and optimising its services to an
individual customer level.
OMS is well positioned for future growth,
due to its geographic footprint, the
increasing digitalisation of workplaces and
increased outsourcing, due to the demand
for skilled technicians. 3i is investing to drive
further growth in OMS’s core business, while
exploring new opportunities.
MAIT is a leading
provider of innovative
and pioneering digital
solutions in the DACH
region, focusing on
software in product
lifecycle management,
enterprise resource
planning as well as
managed services and
cloud solutions.
Since our investment in 2021, we have
supported MAIT in making 13 acquisitions1
that complement its offering in product
lifecycle management and enterprise
resource planning solutions, including
three bolt-on acquisitions in the year, in
CAD ’N ORG and ISAP in April 2024, and
TFH Technical Services in November 2024.
CAD ‘N ORG is a provider of software and
consulting services, offering complementary
software modules, such as a data validation
tool which ensures appropriate data quality.
ISAP is a provider of consulting services,
established for over 30 years, supporting
medium sized manufacturing companies
with tailor-made digitalisation strategies.
TFH technical services is a Dutch
consulting provider specialising in the
implementation and use of lifecycle
management software solutions.
1
Includes asset deals.
Case study: Services & Software bolt-on acquisitions
Year invested
2021
Location
Germany
For more information
www.mait.de
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Investments
Portfolio company Business description
Date
Proprietary
capital investment
£m
New investment
Constellation IT managed services provider
July 2024
98
WaterWipes
Global, premium, natural wet wipe brand
January 2025
121
OMS
Prüfservice
Specialised service provider for electrical equipment
testing
February 2025
99
Total new investment
318
Reinvestment
Action
General merchandise discount retailer
Various
768
Total reinvestment
768
Other further
investment
ten23 health
Biologics focused CDMO
Various
54
Royal Sanders Private label and contract manufacturing producer of
personal care products
October 2024
39
Other
Various
Various
4
Total other further investment
97
Further investment
to finance portfolio bolt-
on acquisitions
xSuite
tangro: Specialist in inbound document management
software
June 2024
5
Total further investment to finance portfolio bolt-on acquisitions
5
Further investment
to support portfolio
companies
Wilson
Global provider of recruitment process outsourcing and
other talent solutions
Various
6
Other
Various
Various
5
Total further investment to support portfolio companies
11
FY2025 Private Equity gross investment
1,199
Return of investment
European
Bakery Group
Industrial bakery group specialised in bake-off bread and
snack products
July 2024
(22)
Total return of investment
(22)
FY2025 Private Equity net investment
1,177
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3i Group plc | Annual report and accounts 2025
28
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Investments continued
Portfolio company Name of acquisition
Business description of bolt-on investment
Date
Private Equity portfolio
bolt-on acquisitions
funded from the
portfolio company
balance sheets
MAIT
CAD 'N ORG
Provider of software and consulting services
April 2024
MAIT
ISAP
Provider of consulting services
April 2024
Royal Sanders Karium
Platform of established brands across the hair care, body
care and skin care categories
June 2024
AES
Condition
Monitoring
Services
Reliability service provider
August 2024
Constellation ILKI
Cloud architecture specialist
October 2024
AES
PSS Marine Seal
Manufacturer of advanced sealing solutions tailored for
the marine industry
October 2024
Evernex
Ultra Support
UK-based third-party maintenance provider
November 2024
MAIT
TFH Technical
Services
Consulting provider specialising in the implementation
and use of product lifecycle management software
solutions
November 2024
Constellation Feelserv
Hybrid cloud managed services
January 2025
Constellation Armonie
Hybrid cloud managed services
February 2025
Royal Sanders Treaclemoon
Value-for-money personal care brand
February 2025
Realisations
Investment
Country
Calendar
year first
invested
3i realised
proceeds
£m
Profit
in the year1
£m
Profit over
opening
value2
%
Money
multiple3
IRR
Full realisations
nexeye
Netherlands
2017
382
10
3%
2.0x
10%
WP
Netherlands
2015
277
42
18%
2.2x
9%
Total realisations
659
52
Refinancing
Action
Netherlands
2011
1,164
–
– %
n/a
n/a
Other realisations
Other
n/a
n/a
4
(2)
n/a
n/a
n/a
Total Private Equity realisations
1,827
50
1
Cash proceeds realised in the period less opening value.
2
Profit in the year over opening value.
3
Cash proceeds over cash invested. Money multiples are quoted on a GBP basis.
Business review
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3i Group plc | Annual report and accounts 2025
29
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WP is a leading provider of
innovative plastic packaging
solutions, with over 4,000
employees and 23 facilities
in 15 countries.
The company supplies the world’s leading A-brands
and private label players.
We invested £147 million in WP, supporting its
international growth strategy through expansion into new
product categories and strengthened its position in its
existing segments. WP also completed four bolt-on
acquisitions during our period of ownership, significantly
reinforcing its presence in Latin America and Europe, and
delivered consistent growth, almost doubling its EBITDA.
In October 2024, we sold our investment in WP at an 18%
profit over 31 March 2024 value, generating proceeds of
£280 million1 which, combined with the £45 million of
proceeds received during the period of our ownership,
resulted in a sterling money multiple of 2.2x.
1
Including interest income of £3 million. An additional £8 million of deferred
consideration was received post year-end in April 2025.
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3i Group plc | Annual report and accounts 2025
30
nexeye is a European
value for-money optical
retail platform, operating
under the Hans Anders,
eyes+more and Direkt
Optik labels.
We invested £205 million in the business
throughout our ownership.
It is headquartered in Gorinchem, the
Netherlands, with c.3,500 employees and c.720
stores in the Netherlands, Belgium, Germany,
Austria and Sweden.
During our investment, nexeye transformed from
a local optical discounter to the value-for-money
leader in the North-West European optical retail
market. In 2019, it acquired eyes+more, which
added Germany as a key growth market. Since
the acquisition, nexeye more than doubled
eyes+more’s store footprint in Germany.
nexeye invested in new stores, refurbished the
existing network, strengthened the management
team and transformed its digital infrastructure to
a best-in-class setup. Under 3i ownership, nexeye
shifted its business model towards digitally
generated appointments, accelerated its digital
marketing and CRM capabilities and drove store
productivity through digital planning. As a result,
sales and EBITDA doubled under our ownership.
In July 2024, we completed the sale of nexeye,
returning proceeds of £382 million, which,
combined with distributions received during our
ownership, resulted in a sterling money multiple
of 2.0x.
Case study: Consumer
& Private Label
Realisation in July 2024
Net proceeds received
£382m
Sterling money multiple
(Total cash return over cost)
2.0x
For more information
www.nexeye.com
Case study: Industrial
Realisation in October 2024
Net proceeds received1
£280m
Sterling money multiple
(Total cash return over cost)
2.2x
For more information
www.WP.com
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Long-term hold portfolio companies:
Action and Royal Sanders
As detailed in the Chief Executive’s statement and in the Action case
study, Action delivered another year of very strong performance and
we reflected this in our valuation of Action at 31 March 2025.
At 31 March 2025, Action was valued using its LTM run-rate EBITDA
to the end of P3 2025 of €2,328 million, which includes the usual
adjustment to reflect stores opened in the last 12 months.
Action run-rate adjustment
Action achieves significant growth in its first years of opening
stores. Since 2013, we have included a run-rate adjustment in
the calculation of Action’s valuation earnings. This adjustment
is to ensure we reflect the full-year profitability for each new
store opened in the year. Action’s performance and growth
since the inclusion of this adjustment continue to validate this
rationale. We apply our valuation multiple to an LTM earnings
number adjusted as set out above, to ensure the growth
embedded in new stores opened in the year is captured.
Action continues to outperform the peers we use to benchmark its
performance across its most important KPIs, supporting our valuation
multiple of 18.5x net of the liquidity discount (31 March 2024: 18.5x).
Action ended P3 2025 with cash of €347 million and a net debt
to run-rate earnings ratio of 2.7x, after paying two dividend
distributions in FY2025, of which 3i received £433 million.
At 31 March 2025, the valuation of our 57.9% stake in Action
was £17,831 million (31 March 2024: 54.8%, £14,158 million) and
we recognised unrealised profits from Action of £4,324 million
(March 2024: £3,609 million) as shown in Table 2.
Royal Sanders, a leading European private label and contract
manufacturing producer of personal care products, was the largest
contributor to our Private Equity performance growth in FY2025,
excluding Action. The company delivered strong organic growth
across its customers in 2024. Royal Sanders has been a driving force
in consolidating a highly fragmented industry, successfully executing
eight bolt-on acquisitions since our investment, including the
acquisitions of Karium and Treaclemoon in FY2025. The bolt-on
acquisitions have outperformed their initial investment cases and the
business has a strong pipeline of other targets.
An overview of the key drivers of the value movement for our long-
term hold assets and a number of our other portfolio companies, can
be seen in Chart 1.
Consumer and private label portfolio companies
EBG saw solid trading across all three of its platforms (Dutch Bakery,
coolback, Panelto) in 2024, demonstrating its resilience amongst an
unfavourable input pricing environment and pressure on wage inflation.
MPM saw good top-line growth in 2024, driven primarily by increased
volumes across its key markets. The US, its largest market, continues
to see strong sales development and there is significant headroom to
scale it further, including through the online channel. While US tariffs
have the potential to introduce some volatility across the whole
premium wet cat food category, management has a robust strategy
to navigate the situation. Audley Travel’s reputable brand and
customer loyalty continued to support its strong performance in
2024. Whilst the business has good coverage on bookings into 2025,
we remain cautious on the outlook for its US market, following the
heightened uncertainty in US policy and impact on US travel sentiment.
Mepal saw good commercial performance in 2024, with volume
growth across its retail partners and its e-commerce offering. Luqom
continues to make an encouraging recovery and gained market share
in 2024. The business saw top-line growth across all of its regions with
particularly impressive performance from Southern and Eastern
Europe, supported by nine new local webshops. BoConcept
continues to operate in a challenging consumer market. Performance
in 2024 was softer, as a result of lower footfall in stores and net store
closures. Recent order intake has been more positive. In February 2025,
we passed our holding in YDEON to Tikehau Capital for no proceeds.
Business review
Private Equity continued
3i Group plc | Annual report and accounts 2025
31
Chart 1: Largest value growth increases and decreases (>£20m)1
Portfolio
company
Value growth
(excl FX)
Value at
31 March 2025
Driver of value
increase
Portfolio
company
Value decline
(excl FX)
Value at
31 March 2025
Driver of value
decline
Action
£4,324m
£17,831m
Wilson
£88m
£39m
Royal Sanders
£256m
£865m
Audley Travel
£84m
£276m
Tato
£47m
£382m
Cirtec Medical
£41m
£614m
EBG
£37m
£278m
Q Holding2
£25m
£172m
xSuite
£21m
£122m
l Performance
l Multiple
1
One portfolio company has been excluded due to commercial sensitivity.
2
Net of a negative movement in multiple.
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Healthcare portfolio companies
Our healthcare portfolio saw good commercial momentum in 2024.
Cirtec Medical delivered strong performance across the majority of its
core sites in 2024, driven by elevated demand from its key customers.
The business won a number of attractive programmes in 2024, which
have the potential to be significant revenue contributors in the near to
medium term. SaniSure saw demand patterns normalise for the
majority of its business lines through the second half of 2024, as the
bioprocessing market stabilised following a period of prolonged
destocking after the pandemic. Over the last two years, the business
has made significant investment in long-term initiatives and
operational excellence that is already delivering good momentum.
ten23 health continued to make good progress. Its Basel site
continues to develop well, with a number of new programmes signed
from new and existing customers. Its existing Visp site is expected to
achieve 100% utilisation in 2025, following a facility remediation at the
end of 2024, which will facilitate the fulfilment of its strong order book.
Q Medical Devices (Q Holding) performed well in 2024, with good
demand from most of its customers across its business units.
Industrial portfolio companies
Our industrial portfolio delivered good overall performance in the
year. Tato saw good volume growth and improved margin
performance in 2024, despite operating in a market that is showing
relatively muted demand and a tougher regulatory and competitor
dynamic. Tato’s cash conversion remained strong and we received £13
million of dividends in FY2025. AES produced another good result in
2024, as end-market conditions improved and the business continued
to make gains on larger competitors in its sector. The business also
completed two bolt-on acquisitions in FY2025, strengthening its
offering in North America. Cash generation remained strong, and we
recorded dividends of £4 million from the business in FY2025.
Dynatect delivered stable performance in the year, despite delays in
the ramp-up of a key contract.
Services and software portfolio companies
The global third-party IT equipment maintenance market was weaker
in 2024, largely as a result of a dip in acquired new equipment in
2020-21, which is then typically serviced three to four years post-
acquisition. Operating in this market, Evernex saw positive
performance in 2024 and the business completed the acquisition
of Ultra Support, a pure third-party maintenance player for data
centres, servers and networking equipment in the UK. MAIT’s buy-
and-build strategy continued in 2024, with the business completing
a further three bolt-on acquisitions at accretive multiples.
The business maintained a good level of overall performance,
despite weaker market demand across IT solutions. xSuite had a
good 2024, characterised by annualised software bookings growth,
and we have reflected its progress towards a SaaS model via its
valuation multiple. Its recent acquisition of tangro is already
delivering a positive contribution.
The recruitment market has experienced a very challenging two years.
More recent geopolitical uncertainty has pushed out expectations of a
near-term market recovery. Operating in this environment has proved
challenging. As a result, Wilson has seen significant pressure on its top
line and overall profitability. Whilst it continues to generate new wins,
it has undertaken a number of operational initiatives and efficiencies
to ensure the business is well positioned to ramp up quickly when the
wider market rebounds. We have reflected the challenges Wilson has
experienced through our valuation, resulting in a total unrealised value
reduction of £88 million for FY2025. During the year, arrivia and
Redweek legally separated, and we retained our stake in Redweek.
arrivia is no longer part of the 3i portfolio.
Overall, 97% of the portfolio by value grew LTM adjusted earnings
in the year (31 March 2024: 93%). Chart 2 on page 33 shows the
earnings growth of our top 20 Private Equity investments.
Excluding Action, the Private Equity portfolio valued on an earnings
basis generated £642 million ( 2024: £689 million) of value growth from
performance increases, offsetting £138 million of performance
decreases (2024: £368 million).
Table 2: Unrealised profits on the revaluation of Private Equity investments1 in the year to 31 March
2025
£m
2024
£m
Earnings based valuations
Action performance
4,324
3,609
Performance increases (excluding Action)
642
689
Performance decreases (excluding Action)
(138)
(368)
Multiple increases
30
68
Multiple decreases
(30)
(107)
Other bases
Discounted cash flow
(19)
(13)
Other movements on unquoted investments2
–
46
Quoted portfolio
(6)
(50)
Total
4,803
3,874
1
Further information on our valuation methodology, including definitions and rationale, is included in the Portfolio valuation – an explanation section.
2
Includes value movements for ten23 valued on the Sum of the parts basis.
Business review
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3i Group plc | Annual report and accounts 2025
32
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Leverage
Our Private Equity portfolio is funded with all-senior debt structures,
with long-dated maturity profiles. As at 31 March 2025, 91% of
portfolio company debt was repayable from 2028 to 2032.
Average leverage across the portfolio was 2.9x (31 March 2024: 2.7x).
Excluding Action, leverage across the portfolio was 3.5x
(31 March 2024: 3.9x).
Chart 3 shows the ratio of net debt to adjusted earnings
by portfolio value.
Multiple movements
When selecting multiples to value our portfolio companies, we take
a long-term, through-the-cycle approach and consider a number of
factors including recent performance, outlook and bolt-on activity,
comparable recent market transactions and exit plans, and the
performance of quoted comparable companies. At each reporting
date, our valuation multiples are considered as part of a robust
valuation process, which includes independent challenge throughout,
including from our external auditor, culminating in the quarterly
Valuations Committee of the Board.
Global markets saw a strong rally in 2024, as inflation stabilised and
central banks began easing interest rates. However, the start of 2025
has been marked by increased volatility, driven by geopolitical
uncertainty and shifting trade policies.
Against this backdrop, we have remained cautious in considering the
valuation multiples we use for our portfolio companies. We increased
the multiple for two of our portfolio companies in the year to reflect
their performance against their respective investment cases and
adjusted four multiples downwards, largely to reflect trading and the
dynamics of their respective end-markets. In total, we recognised a
net nil unrealised value movement from multiple movements in the year
(March 2024: £39 million loss). At 31 March 2025, our current weighted
average post-discount multiple (excluding Action) was 13.4x (31
March 2024: 13.0x).
We have made no changes to our approach to the valuation of Action.
Action’s performance and KPIs continue to compare favourably to its
peer group’s, which consists of North American and European value-
for-money retailers. This supports our post-discount valuation multiple
of 18.5x, which is unchanged from the prior year. We take comfort from
the fact that Action’s continued growth meant that its valuation at 31
March 2024 translated to only 14.7x (post-discount) the run-rate EBITDA
achieved one year later. Based on the valuation at 31 March 2025, a 1.0x
movement in Action’s post-discount multiple would increase or
decrease the valuation of 3i’s investment by £1,129 million.
Chart 2: Portfolio earnings growth of the top 20
Private Equity1 investments
3i value at 31 March 2025 (£m)
432
2,230
470
18,868
927
2
9
2
3
4
<0%
0-9%
10-19%
20-29%
≥30%
Number of companies
1
Includes top 20 Private Equity companies by value excluding ten23 health. This represents 97%
of the Private Equity portfolio by value (31 March 2024: 96%). Last 12 months’ adjusted earnings
to 31 December 2024 and Action based on LTM run-rate earnings to the end of P3 2025.
Chart 3: Ratio of net debt to adjusted earnings1
3i value at 31 March 2025 (£m)
41
403
18,639
1,484
110
1,289
40
1
3
6
5
1
3
2
< 1x
1-2x
2-3x
3-4x
4-5x
5-6x
>6x
Number of companies
1
This represents 93% of the Private Equity portfolio by value (31 March 2024: 91%). Quoted holdings,
ten23 health and companies with net cash are excluded from the calculation. Net debt and adjusted
earnings at 31 December 2024 and Action based on LTM run-rate earnings to the end of P3 2025.
Business review
Private Equity continued
3i Group plc | Annual report and accounts 2025
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Quoted portfolio
Basic-Fit is the only quoted investment in our Private Equity portfolio.
In 2024, Basic-Fit’s memberships increased by 12% year-on-year and
it added 173 clubs to its network.
Our remaining 5.7% stake in Basic-Fit was valued at £60 million at
31 March 2025 (31 March 2024: £67 million), following an 8.8%
decrease in its share price to €18.86 (31 March 2024: €20.68).
Sum of the parts
At 31 March 2025, ten23 health was valued on a sum of the parts
basis, using a discounted cash flow (“DCF”) methodology for its
operating lines. We continued to invest in the platform during the
year and the business is making good progress across each of its
operating lines.
Assets under management
The assets under management of the Private Equity portfolio,
including third-party capital, increased to £31.9 billion (31 March
2024: £27.5 billion), primarily due to unrealised value movements in
the year.
Table 3: Private Equity assets by sector as at 31 March 2025
Sector
Number of
companies
3i carrying
value
2025
£m
Action (Consumer)
1
17,831
Consumer & Private Label
12
2,498
Healthcare
4
1,361
Industrial
5
915
Services & Software
14
953
Total
36
23,558
Business review
Private Equity continued
3i Group plc | Annual report and accounts 2025
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At a glance
Gross investment return
£52m
or 3%
(2024: £99m or 7%)
AUM
£6.3bn
(2024: £6.7bn)
Cash income
£106m
(2024: £113m)
We manage funds investing principally
in mid-market economic infrastructure in
Europe and North America. Infrastructure
is a defensive asset class that provides
a good source of income and fund
management fees for the Group as well
as long-term capital gains.
Our Infrastructure portfolio generated a GIR of £52 million, or 3%
on the opening portfolio value (2024: £99 million, 7%). This
performance was principally driven by a good level of dividend and
interest income alongside value growth from our infrastructure funds,
which more than offset the subdued share price performance of our
quoted stake in 3iN.
3iN's underlying portfolio continues to deliver good performance,
and 3iN completed a significant realisation in the year, achieving
an impressive money multiple of 3.6x, reaffirming the strong market
demand for high-quality infrastructure assets. In addition, 3iN
successfully executed two significant refinancings which returned
cash proceeds and completed two strategic further investments
and a syndication within its portfolio companies.
Our North American Infrastructure Fund (“NAIF”) continued to
advance its buy-and-build strategy, with two portfolio companies
completing three acquisitions, further enhancing their growth
trajectory and operational scale.
Table 4: Gross investment return
for the year to 31 March
Investment basis
2025
£m
2024
£m
Realised profits / (losses) over value on the
disposal of investments
1
(4)
Unrealised profits on the revaluation of
investments
17
72
Dividends
37
35
Interest income from investment portfolio
12
11
Fees payable
(4)
(6)
Foreign exchange on investments
(11)
(9)
Gross investment return
52
99
Gross investment return
as a % of opening portfolio value
3%
7%
Business review
Infrastructure
3i Group plc | Annual report and accounts 2025
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Fund management
3iN
3iN generated a total return on opening NAV of 10.1% for the year
to 31 March 2025, ahead of its total return target of 8% to 10%
per annum, and delivered its dividend target of 12.65 pence
per share, a 6.3% increase on last year.
This result was driven by good performance and momentum across
the majority of 3iN’s portfolio companies, as the portfolio continues
to benefit from long-term growth drivers.
TCR saw further strong performance in 2024, with higher rental
volumes across its ground support equipment. The business
increased its global footprint with 22 more airports and has significant
white space ahead of it. In February 2025, TCR closed a refinancing,
returning a £60 million distribution to 3iN.
Tampnet’s North Sea and Gulf of Mexico fibre operations performed
well. It continues to win new contracts, including the first fibre-backed
contract in the Mexican deepwater. Utilisation rates were good
across ESVAGT’s fleet of service operation vessels and the business is
well positioned in its sector and markets to capitalise on the positive
trajectory in the offshore wind market in Europe and more recently in
South Korea. Oystercatcher, the holding company for the stake in
Advario Singapore, successfully completed a debt raise in the year,
enabling a distribution to 3iN of £108 million.
DNS:NET is seeing improved performance in its fibre rollout, albeit
we remain cautious on the outlook for the sector. In January 2025,
3iN completed an investment of €24 million in the business to
continue to fund the fibre roll-out. Infinis delivered a strong result as
it saw higher than expected levels of exported power from its
captured landfill methane business. Other notable contributors
include Future Biogas and FLAG (formerly Global Cloud Xchange).
The portfolio has a small number of portfolio companies
experiencing softer trading. SRL experienced a downturn in activity
in 2024, as a result of reduced UK local authority capital expenditure.
Whilst the market remains challenging, the overall outlook into the
second half of 2025 is improving. Ionisos also performed below our
expectations, due to volume weakness in the German construction
industry.
In January 2025, 3iN completed the realisation of its 33% stake in
Valorem for net proceeds of €310 million, generating a 21% gross
annual IRR and a 3.6x gross money multiple. 3iN also completed
two transactions with Future Biogas; in August 2024, Future Biogas
acquired majority control in a portfolio of six anaerobic digestion
facilities for £68 million, of which £30 million was funded by 3iN. In
September 2024, 3iN syndicated 23% of its stake in Future Biogas
for proceeds of £30 million, at a 15% uplift to 31 March 2024 value.
As investment manager to 3iN, in FY2025, we recognised a
management and support services fee of £51 million (2024: £51
million) and a NAV-based performance fee of £29 million (2024: £41
million). This performance fee comprised a third of the potential
performance fee for each of FY2025, FY2024 and FY2023, after the
performance hurdle was met in each year.
Business review
Infrastructure continued
3i Group plc | Annual report and accounts 2025
36
Regional Rail acquired
Cincinnati Eastern Railroad
in July 2024, adding 70 miles
of track in Ohio.
The railroad provides freight hauling and storage
services to customers across a variety of end
markets, including aggregates, food & agriculture,
and paper products, and is poised to benefit from
continued industrial development in the region.
The acquisition further expands Regional Rail’s
Midwest US presence and diversifies its customer
and commodity exposures. Regional Rail has grown
from three railroads in the Northeast US to 16
operations across North America.
Case study: Bolt-on acquisition
For more information
www.regional-rail.com
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North American Infrastructure Fund (“NAIF”)
The NAIF delivered resilient performance and saw a good level of
bolt-on activity in FY2025.
Regional Rail generated growth organically, by transporting
increased product volumes, and through continued bolt-on activity.
The acquisition of Cincinnati Eastern Railroad during the year added
70 miles of track in Ohio. Regional Rail also completed the buyout of
a minority stake in its Canadian rail operations. EC Waste performed
well across its transfer station and landfill segments. Amwaste saw
mixed trading in the year. The business completed two bolt-on
acquisitions including C&C Sanitation and Waste Away Environmental,
furthering both collection and post-collection services in Southeast
United States. In February 2025, the NAIF completed the sale of its
minority stake in Shared Tower.
Assets under management
Infrastructure AUM decreased to £6.3 billion (31 March 2024: £6.7
billion), reflecting the sale of our European Operational Projects Fund
capability in May 2024, and the decrease in the share price of 3iN.
This was partially offset by good performance across NAIF and 3i
Managed Infrastructure Acquisitions Fund (“3i MIA”). We generated
fee income of £61 million from our Infrastructure fund management
activities in the period (2024: £68 million).
3i’s proprietary capital infrastructure portfolio
The Group’s proprietary capital infrastructure portfolio consists
of its 29% quoted stake in 3iN, its investment in Smarte Carte
and direct stakes in other managed funds.
Quoted stake in 3iN
At 31 March 2025, our 29% stake in 3iN was valued at £856 million (31
March 2024: £879 million), as its share price decreased by 3% year on
year to 318 pence (31 March 2024: 327 pence). As a result, we
recognised an unrealised value loss of £23 million (2024: unrealised
profit of £38 million). This was offset by £33 million of dividend
income in FY2025 (2024: £31 million).
North American Infrastructure proprietary capital
Smarte Carte delivered strong performance in 2024, supported by
steady US domestic and international passenger traffic. Its carts
business outperformed the prior year, driven by the successful
execution of a new long-term contract at London’s Heathrow Airport
and continued benefits from improved pricing economics that
Smarte Carte shares with its airport partners. Additionally, Smarte
Carte made significant progress in expanding its international
footprint and advancing various business development initiatives.
This includes the successful rollout of 450 new United States Postal
Service lockers and securing several ancillary service wins across its
international locations.
At 31 March 2025, Smarte Carte was valued at £308 million on a DCF
basis (31 March 2024: £306 million). We also received cash interest
income of £6 million in the year from the business.
Table 5: Assets under management as at 31 March 2025
Fund/strategy
Close
date
Fund
size
3i
commitment/
share
Remaining
3i commitment
%
invested2
at 31 March
2025
AUM3
£m
Fee
income
earned in
2025
£m
3iN1
Mar-07
n/a
£856m
n/a
n/a
2,933
51
3i MIA
Jun-17
£698m
£35m
£5m
87%
1,733
4
3i managed accounts
various
n/a
n/a
n/a
n/a
776
4
North American Infrastructure Fund
Dec-234
US$744m
US$300m
US$73m
77%
561
2
Smarte Carte
Nov-17
n/a
n/a
n/a
n/a
308
–
Total
6,311
61
1
AUM based on the share price at 31 March 2025.
2
% invested is the capital deployed into investments against the total Fund commitment.
3
We retained a proprietary stake in Alba EOPF (formerly 3i EOPF), following the sale of our operational projects infrastructure fund capability in May 2024. It has been excluded from the table above.
4
First close completed in March 2022. Final close completed in December 2023.
Table 6: Infrastructure portfolio movement for the year to 31 March 2025
Investment
Valuation
Opening
value at
1 April 2024
£m
Investment
£m
Disposals
at opening
book value
£m
Unrealised
profit/(loss)
£m
Other
movements1
£m
Closing
value at
31 March 2025
£m
3iN
Quoted
879
–
–
(23)
–
856
Smarte Carte
DCF
306
–
–
5
(3)
308
North American Infrastructure Fund2
DCF
199
3
(9)
18
(4)
207
3i MIA
Fund
71
–
–
17
–
88
Alba EOPF
Fund
33
1
–
–
(1)
33
Total
1,488
4
(9)
17
(8)
1,492
1
Other movements include foreign exchange.
2
Includes Regional Rail, EC Waste, Amwaste. Shared Tower was divested in the year.
Business review
Infrastructure continued
3i Group plc | Annual report and accounts 2025
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At a glance
Gross investment return
£46m
or 9%
(2024: £10m or 2%)
Dividend income
£22m
(2024: £25m)
We first invested in Scandlines in 2007,
increasing our stake in 2013, before
realising our holding in 2018, returning
£835 million of proceeds at a money
multiple of 7.7x. We subsequently
reinvested £529 million in a 35% stake in
Scandlines in 2018. Since our reinvestment,
Scandlines has returned total cash proceeds
of £232 million, 44% of our reinvestment,
and is held on a longer-term basis to
generate capital and income returns.
Performance
Scandlines performed resiliently in FY2025, generating a GIR of
£46 million, or 9% of opening portfolio value (2024: £10 million, 2%).
Leisure revenues performed strongly, achieving record levels over
the peak summer period. Freight volumes were softer due to a weak
macro-economic environment in Germany and Scandinavia, whilst
reduced consumer purchasing power in Sweden negatively impacted
one-day shopping volumes.
The business continues to be cash generative, resulting in the receipt
of £22 million of dividend income in FY2025 (2024: £25 million).
Scandlines is making good progress with its sustainability agenda.
For further details, see page 47.
We continue to value Scandlines on a DCF basis, with a value of
£529 million at 31 March 2025 (31 March 2024: £519 million).
Foreign exchange
We hedge the balance sheet value of our investment in Scandlines.
We recognised a £10 million loss on foreign exchange translation
(2024: loss of £15 million), offset by a £15 million fair value gain (2024:
gain of £20 million) from derivatives in our hedging programme.
Table 7: Gross investment return
for the year to 31 March
Investment basis
2025
£m
2024
£m
Unrealised profits/ (losses) on the revaluation of
investments
19
(20)
Dividends
22
25
Foreign exchange on investments
(10)
(15)
Movement in fair value of derivatives
15
20
Gross investment return
46
10
Gross investment return as a % of opening
portfolio value
9%
2%
Business review
Scandlines
3i Group plc | Annual report and accounts 2025
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What’s in this section
A responsible approach
40
1. Invest responsibly
42
2. Recruit and develop a diverse pool of talent
52
3. Act as a good corporate citizen
56
Our TCFD disclosures
58
3i Group plc | Annual report and accounts 2025
39
Sustainability
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We aim to generate attractive returns
across the cycle by behaving responsibly
as an investor, an employer and a
corporate citizen.
We employed only 223 people at 31 March 2025, and therefore our
direct impact on the environment and other sustainability issues is
limited. With assets under management of £38.7 billion, our impact
on the environment and society is determined principally by our
portfolio. We have a long-term, responsible approach to investment
and aim to compound value through thoughtful origination,
disciplined investment and active portfolio management, considering
the consequences of our actions on stakeholders. This practice is built
on our values, strong governance and robust processes, both at 3i
itself and at its portfolio companies. This commitment has enabled
us to build trust with our shareholders, co-investors and portfolio
companies, and to recruit and develop employees who share
our values and ambitions.
Our reporting
We have chosen to report in accordance with the Global Reporting
Initiative (“GRI”) and Sustainability Accounting Standards Board
(“SASB”) standards. Please refer to our website for the GRI content
index and SASB disclosures. We also provide additional disclosures
across a number of areas in our data appendix and in the summaries
of relevant policies that are available on our website.
Governance and resources
The Board of Directors is responsible for the oversight of the Group’s
sustainability strategy, approach and policies, including the
Responsible Investment policy. It delegates day-to-day accountability
for sustainability to the executive management and, in particular, the
Chief Executive. The Chief Executive has established a number of
committees that support him in overseeing and monitoring policies
and procedures and that address issues if they arise. This includes a
Sustainability Committee, which assists and advises the Chief
Executive, directly and through the Investment and Group Risk
Committees, on relevant sustainability risks and matters, including
developing and proposing the Group’s approach to managing
sustainability. It also coordinates the Group’s various sustainability
activities, including the management of sustainability risks and
opportunities across the portfolio.
We have several dedicated sustainability professionals, both at
Group level, with a focus on the Group’s overall sustainability
strategy, objectives and reporting, and embedded within each of our
Private Equity and Infrastructure investment teams, with a focus on
the assessment and management of sustainability-related risks and
opportunities within existing and potential portfolio companies.
External benchmarking
We believe that it is important to evidence our commitment to
operating sustainably. We therefore provide a wealth of relevant
information to shareholders and other interested stakeholders.
We also engage with multiple rating providers that assess our
sustainability performance based on their own methodologies.
The summary of our ratings is available on our website.
We have been signatories of the UN Principles of Responsible
Investment since 2011.
Page 101
Governance framework
GRI, SASB, Data appendix and summaries of sustainability policies
www.3i.com/sustainability
Further information on external ratings
www.3i.com/sustainability
Sustainability
A responsible approach
3i Group plc | Annual report and accounts 2025
40
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Our sustainability strategy is defined by three key priorities:
1
Invest
responsibly
We give due consideration to the
sustainability profile of portfolio
companies before investing and
throughout the holding period.
We use our influence with our
portfolio companies to ensure that
they consider their environmental and
social impacts and dependencies and,
where relevant, devise strategies to
address them.
2
Recruit and
develop a
diverse pool
of talent
Recruiting, retaining and developing
our talent is a priority. We value
diversity and believe that a variety
of perspectives enhances our
decision making.
3
Act as a good
corporate
citizen
We embed responsible business
practices throughout our organisation,
by promoting our values and culture.
Sustainability
A responsible approach continued
3i Group plc | Annual report and accounts 2025
41
Pages 42-51
Pages 52-55
Pages 56-57
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1
Invest responsibly
We believe that a responsible
approach to investment aligns
with our values and supports the
delivery of attractive returns from
our portfolio over the long term.
We have majority or significant
minority holdings in our core
portfolio companies and are
represented on their boards.
We exercise our influence to
ensure that they consider their
material environmental and social
impacts and dependencies and,
where relevant, support them in
developing plans to mitigate
sustainability risks and invest in
value creation opportunities that
may arise.
Our investment approach is based on four pillars:
• Permanent capital and long-term stewardship
• Careful portfolio construction
• Active asset management
• Thematic origination
Page 14
The Sustainability Committee reviews how sustainability-related risks
and opportunities are assessed throughout our investment and
portfolio management activities and develops and recommends
changes to our processes and to our Responsible Investment (“RI”)
policy, to ensure that they remain aligned with emerging best
practice, evolving stakeholder expectations and recent and
upcoming sustainability regulations across our markets.
Our Responsible Investment policy
Our RI policy sets out the types of businesses in which 3i will not
invest, as well as minimum requirements in relation to sustainability
matters, which we look for new portfolio companies to either meet or
commit to meeting over a reasonable time period. We screen all
investments against the RI policy, irrespective of their country or
sector. We monitor compliance with, and progress towards meeting,
3i’s expectations on a regular basis.
3i’s expectations as set out in the RI policy are to invest in
businesses which are committed to:
Good governance
Implementing a strong corporate governance and risk management
culture and complying in form and substance with established best
practice in corporate governance, which is appropriate to the relative
size and complexity of the relevant business and the markets in which
it operates.
Business integrity
Upholding high standards of business integrity, avoiding corruption
in all its forms and complying with applicable anti-bribery, anti-fraud,
anti-money laundering and data protection laws and regulations.
The environment
A cautious and responsible approach to managing the environmental
aspects of their business operations (and those of their supply chain)
by making efficient use of natural resources and mitigating
environmental risks and damage.
Fair and safe working conditions
Respecting the human rights of their workers and of the people
working in their supply chain, maintaining safe and healthy working
conditions for their employees, contractors and the people working
in their supply chain, treating their employees fairly, upholding the
right to freedom of association and collective bargaining, treating
their customers fairly and respecting the health, safety and wellbeing
of those affected by their business activities.
Our RI policy is reviewed regularly to ensure that it is aligned with 3i’s
strategic priorities and industry standards.
A summary of our Responsible Investment policy
www.3i.com/sustainability/responsible-investment
Sustainability
3i Group plc | Annual report and accounts 2025
42
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Assessment and management of sustainability factors in our investment and portfolio management processes
The active management of sustainability risks and opportunities is integral to our investment, portfolio management and value creation
processes. We embed an assessment of the long-term sustainability profile of existing and new investments in our processes. Once invested,
we support companies as they develop strategies and respond to stakeholder expectations and we gather data to measure progress against
sustainability objectives. This enables us to prepare companies ahead of any exit opportunity.
Pre-investment
During investment period
Exit
Assessment and
action planning
• Screen each opportunity
against the requirements
of the RI policy
• Identify and assess the most
material sustainability factors
relevant to each investment
opportunity
• Commission specialist or
technical due diligence on
sustainability matters where
appropriate
• Ensure sustainability
considerations are reflected
in Investment Committee
materials
• Integrate key actions into
the post-investment value
creation plan
Use of influence and
engagement
• Establish robust governance
and procedures within portfolio
companies to ensure
sustainability risks and
opportunities are assessed
and managed appropriately
• Use board participation and
influence to ensure companies
address relevant sustainability
risks
• Provide a clear framework to
guide companies as they mature
and encourage year-on-year
progress
• Leverage the 3i network and
broader portfolio to facilitate
introductions, share advisers’
contacts and promote best
practice
• Engage with companies as they
develop sustainability strategies,
supporting the implementation
and delivery of related projects
Data collection and
monitoring
• Collect sustainability data from
portfolio companies annually to
establish baselines and track
progress over time
• Conduct detailed quantitative
and qualitative sustainability
assessments annually as part of
the portfolio company review
process
• Benchmark portfolio company
performance in the context of
the broader 3i portfolio
• Ensure sustainability is a
standing agenda item in
portfolio company review
meetings, involving investment
teams, Investment Committee
members and 3i Board members
• Set and monitor progress
against portfolio-wide
sustainability objectives, aligned
with the minimum requirements
outlined in the RI policy
Preparation and
communication
• Anticipate and prepare the
data collection, reporting and
governance structures needed
ahead of potential exit
• Collaborate with advisers to
ensure relevant sustainability
information is clearly and
effectively communicated
to prospective buyers
Objectives
The Investment Committee may
decline opportunities where the
pre-investment sustainability
assessment highlights red flags
that cannot be remedied post
investment. Where appropriate,
further specialist due diligence
may be commissioned to
evaluate whether specific issues
can be resolved.
We use our influence to manage
risk and ensure that value creation
opportunities linked to
sustainability are identified
and captured.
We use data to strengthen our
understanding and management
of sustainability matters, to support
decision making, identify key
trends and opportunities across
the portfolio and enable
benchmarking. Data also helps
us to comply with our reporting
obligations.
Strong sustainability performance
and management can protect
and potentially enhance the value
achieved in an exit.
In FY2025, we formalised and standardised our sustainability due diligence framework to ensure our approach is applied consistently for each
new investment across business lines. This adaptable framework incorporates key sustainability topics aligned with 3i’s strategic priorities,
aiming to assess a company’s sustainability maturity at the point of investment. This assessment helps to identify key expectations, risks and
value creation opportunities, informing investment team decisions and supporting the development of targeted post-investment action plans.
Following a comprehensive climate change scenario analysis conducted in FY2024, in FY2025 we implemented some changes to strengthen
our climate risk approach by embedding physical and transition risk considerations into our due diligence framework. To support the
consistent assessment and ongoing monitoring of climate-related risk and opportunities, we have now procured a specialist climate risk
assessment software tool. During FY2025, we also advanced our understanding of key nature impacts and dependencies within our portfolio
through a high-level assessment using open-source tools, identifying key nature hot spots that we would like to focus on in the future.
Building on the roll-out of our portfolio sustainability data collection tool in FY2024, we refined our annual sustainability assessment
questionnaire to reflect evolving stakeholder expectations and 3i’s strategic focus areas. For the first time, we produced individual benchmark
reports for each portfolio company, offering comparative insights across the portfolio and practical actions to enhance sustainability maturity.
We continued to offer training to our 3i staff, including our investment executives, on sustainability topics relevant to our portfolio and their
roles as directors on portfolio company boards. In FY2025, we also provided dedicated training to employees and Board members on the
science-based targets set by 3i and their implications for the portfolio.
Pages 58-68
TCFD disclosures and climate change scenario analysis
Sustainability
Invest responsibly continued
3i Group plc | Annual report and accounts 2025
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Proactive engagement with our portfolio
Once invested, we use our influence to ensure that portfolio
companies monitor sustainability factors and develop a
proportionate sustainability strategy over the course of our ownership
period. This involves taking actions, including:
• establishing board or management-level responsibility for
sustainability, supported by appropriate resourcing;
• identifying and assessing material sustainability issues and devising
strategies to address them;
• measuring their carbon footprint, setting science-based targets or
appropriate decarbonisation plans, and demonstrating progress
within a reasonable timeframe;
• establishing relevant and proportionate governance, sustainability-
related policies and procedures, and reporting;
• preparing for and responding to evolving regulatory requirements;
and
• considering stakeholders in their management of sustainability
issues and communicating transparently.
We leverage our knowledge and expertise across our portfolio and
facilitate the sharing of best practice, either through introductions to
other companies or trusted advisers, or through forums on common
themes which have historically included plastics, carbon and
information security and digital innovation.
In FY2024, we strengthened knowledge sharing across our portfolio
companies through our inaugural sustainability forum in Amsterdam,
welcoming sustainability representatives from 30 of our Private Equity
and Infrastructure portfolio companies. We are now organising a
follow-up forum which will take place in June 2025.
Our activities involve both portfolio-wide engagement on topics that
are material across the portfolio and to 3i as the investment manager,
as well as one-on-one interactions with portfolio companies on topics
that are material to them given their specific circumstances and level
of sustainability maturity.
In FY2025, we focused our portfolio-wide engagement on a number
of ongoing and emerging sustainability issues affecting our portfolio,
including climate change, human rights across the value chain and
upcoming sustainability regulations, such as the EU’s Corporate
Sustainability Reporting Directive.
On pages 45 to 48 we highlight a few examples of our engagement
and the progress achieved by our portfolio companies on these
topics. Additionally, we provide an update on some of Action’s
material sustainability topics on pages 50 and 51.
79%
of portfolio companies with board
or management team-specific
responsibility for sustainability
management and compliance1
(FY2024: 69%)
54%
of portfolio companies publish
sustainability reports1
(FY2024: 46%)
100%
of portfolio companies report
carbon emissions to 3i1
(FY2024: 97%)
1
Excluding PPP project investments and some legacy minority and other
minority investments where we have limited influence.
Sustainability
Invest responsibly continued
3i Group plc | Annual report and accounts 2025
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Human rights
Upholding human rights across the
value chain is a key aspect of responsible
business and a priority for 3i as a
responsible investor.
While our core investment markets in Europe and North America are
generally considered to carry a lower risk of human rights violations,
we recognise that many of our portfolio companies operate in or
source from higher-risk geographies or sectors. As regulatory
expectations evolve and consumer scrutiny increases, we are
committed to supporting our portfolio companies in developing
robust processes to identify, manage and remediate potential human
rights issues.
To support this objective, in FY2025 we launched a proprietary
human rights framework, developed in collaboration with external
specialists. The framework provides a structured, practical approach
to 3i and our portfolio companies for identifying and assessing
human rights risks across direct operations and supply chains. It is
designed to be adaptable to businesses of different sizes and levels
of maturity, and guides companies towards proportionate, risk-based
actions. The framework aims to enhance regulatory readiness,
strengthen supply chain resilience, and enable portfolio companies
to meet growing stakeholder expectations.
Health and safety
The health and safety of portfolio companies’ employees, as well as
that of others impacted by our portfolio companies, is a key priority
for 3i, particularly for our Infrastructure portfolio, where the nature of
operations typically leads to heightened risks in this area.
In the Infrastructure portfolio, each portfolio company board is
responsible for overseeing health and safety. Incidents are reported
and discussed during board meetings, while serious incidents are
immediately escalated to 3i, with updates monitored as needed.
We encourage companies to set leading and lagging health and
safety indicator targets and monitor performance monthly. Annual
metrics are captured through our annual sustainability assessment.
Where results indicate a negative trend, the issue is followed up with
the management team.
In addition to reporting, and to support 3i’s team to be effective
directors on the boards of portfolio companies, training was provided
to the team focused on mitigating the risk of serious incidents.
In December 2024, the Infrastructure team participated in immersive,
in-person training, which included a practical workshop on safety
leadership, with a particular emphasis on effective communication.
Following the training, new internal processes were introduced to
ensure the effective sharing of lessons learned, promoting
continuous improvement across 3i’s Infrastructure team.
MPM is an international leader in branded,
premium natural pet food, headquartered
in the UK.
The company partners with a small number of long-term
manufacturing suppliers, many of which have worked with MPM for
over 16 years. These long-term relationships underpin strong
understanding and oversight across the supply chain.
MPM has built its supply chain processes around quality, transparency
and resilience. All raw materials can be traced to source within four
hours, and dual sourcing is in place for all products to mitigate
potential risks. Product safety and quality are key priorities, with clear
supplier standards and regular audits performed.
In 2022, MPM formally integrated sustainability expectations into its
supplier requirements. Its Sustainable Procurement Policy outlines
criteria for supplier selection and evaluation, covering environmental
and social considerations. These are monitored through bi-annual
reviews, supplier self-assessments and additional specific
sustainability questionnaires. All suppliers commit to a four-year
agreement that includes adherence to MPM’s Supplier Code of
Conduct, with defined expectations around sourcing, subcontracting,
certification and human rights.
To strengthen this further, MPM launched a dedicated human rights
workstream in 2024. Supported by a specialist third party, the business
undertook a Human Rights Due Diligence Assessment across its
supply chain. This included a risk assessment, a diagnostic of current
practices and a review of existing supplier relationships. The process
also helped build internal capability by equipping key staff with
knowledge of best-practice ways to identify and manage risks as
the business grows.
Looking ahead, MPM has established a human rights and
environmental due diligence policy, is developing a proprietary
supplier scorecard across environmental and social areas, and will
roll out targeted human rights training to a broader group of
employees in 2025.
Read more
www.mpmproducts.co.uk
Sustainability
Our sustainability focus areas for FY2025
3i Group plc | Annual report and accounts 2025
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Climate change and
decarbonisation
The impact of climate change is a material
topic for 3i and many of our portfolio
companies. It has the potential to affect
long-term value through evolving
regulatory requirements, shifts in consumer
preferences and stakeholder expectations
to address carbon and broader
environmental footprints.
We recognise that understanding and managing climate-related risks
and opportunities is an important factor in preserving and enhancing
value across our portfolio. Despite the ongoing political differences
on the subject, and diverging regional approaches, most
decarbonisation targets in our markets remain in place. The UK
increased its decarbonisation targets in January 2025 and the EU has
referred to decarbonisation as a driver for future competitiveness.
We also believe that there is commercial momentum behind
decarbonisation strategies, and that the private sector will play a
central role in the transition to a low-carbon economy.
The approval of 3i Group’s science-based targets in 2024 reinforced
our commitment to reducing emissions in our own operations, while
also supporting portfolio companies to measure, manage and reduce
their emissions in line with climate science. This was a key focus area
in our portfolio engagement activities during FY2025, which led to
the validation of several of our portfolio companies’ science-based
targets during the year:
• Action, our largest portfolio company, set SBTi-validated near-term
emissions reduction targets in 2025. Further detail on these targets
and the progress achieved can be found on pages 50 and 51.
• Since its establishment in 2021, ten23 committed to reducing its
Scope 1 and 2 emissions by 50% by 2025 on a revenue intensity
basis. The company delivered a 57% reduction in Scope 1 and 2
emissions intensity in the three years to 2024 driven by the use of
100% renewable electricity and by energy efficiency improvements.
In October 2024, ten23’s near-term and net zero emissions
reduction targets received validation from the SBTi. The company
has now committed to reducing absolute Scope 1 and 2 emissions
by 42% by 2030 (from a 2023 baseline) and to achieving a 90%
reduction in Scope 1, 2 and 3 emissions by 2050.
• Belfast City Airport set an SBTi-validated target, committing to
reduce its Scope 1 and 2 emissions by 42% by 2030 (from a 2022
baseline). Belfast City Airport has been working to reduce its GHG
emissions for a number of years, measuring and reporting its
carbon footprint since 2017 and participating in the Airports
Council International’s Airport Carbon Accreditation programme
since 2019, with a current Level 3 ‘Optimisation’ accreditation.
In addition, Belfast City Airport is committed to measuring and
working to reduce Scope 3 emissions where possible.
Sustainability
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A number of companies had already set validated science-based
targets prior to FY2025, and are beginning to demonstrate
decarbonisation progress in line with these:
• BoConcept achieved a 52% reduction in Scope 1 emissions during
FY2023/24 by investing in a new central heating system and
phasing out the use of natural gas at its Ølgod manufacturing
facility. While its Scope 2 emissions increased due to the shift from
gas to electricity, the company has delivered a 32% reduction in
combined Scope 1 and 2 emissions since its baseline year,
FY2019/20, outperforming its initial SBTi target of a 25% reduction
by 2030. BoConcept is now in the process of completing a
comprehensive measurement of its Scope 3 emissions, covering
raw materials, suppliers, product use and end-of-life disposal.
• In 2024, Ionisos reduced its GHG emissions in line with its science-
based target, in spite of increased activity at two new plants. These
reductions were achieved through the procurement of renewable
electricity and improved monitoring processes, which led to a
decrease in greenhouse gas leakage during operations.
The remainder of our portfolio is at varying stages of decarbonisation
maturity. Our overall portfolio position is summarised using the
Private Markets Decarbonisation Roadmap (“PMDR”), set out
on page 66 as part of our TCFD disclosures.
Several of our portfolio companies are exploring ways to offer lower
climate impact products or services, or to support the
decarbonisation efforts of their customers:
• BoConcept has introduced lower-impact products into its range,
including traceable, chrome-free leather, recycled and certified
materials such as Forest Stewardship Council-certified wood and
EU Ecolabel and GreenGuard Gold fabrics, and has calculated
product-level carbon footprints for over 50% of its collection as part
of its Scope 3 emissions measurement.
• Scandlines has confirmed plans to convert two of its four passenger
vessels to plug-in hybrid ferries on the Puttgarden-Rødby route.
Once converted, 80% of the power needed for a crossing will be
provided by batteries charged in ports. This is a key milestone in
the delivery of Scandlines’ target of becoming operationally
emissions free on this route in 2030, and at a group level by 2040.
• In January 2025, TCR was selected to deliver the world’s first all-
electric pool of ground support equipment at JFK International
Airport’s new Terminal One, scheduled to open in 2026. In addition
to the environmental benefits, TCR will collaborate with local
communities and partners to deliver the project, fostering a diverse
workplace and creating around 50 local jobs, including roles for
electric ground support equipment maintenance technicians.
• Future Biogas announced the opening of the UK’s first
unsubsidised biomethane plant in February 2025. The plant will
supply 100 GWh of renewable energy annually to AstraZeneca UK.
This is equivalent to 20% of AstraZeneca’s total gas consumption,
displacing approximately 18,000 tCO2e per year. The plant will
provide clean biomethane for all of AstraZeneca’s R&D and
manufacturing in the UK, supporting the sustainable production
of medicines.
Sustainability
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Sustainability regulations
Many of our portfolio companies are
becoming subject to new and rapidly
evolving sustainability regulations.
These regimes increasingly cover sustainability matters, as well as
enhanced sustainability-related disclosures. We work closely with our
portfolio companies to help them stay abreast of relevant regulatory
developments, understand the potential implications for their
operations and financial planning, and ensure timely compliance.
Ahead of the publication of the EU Omnibus Simplification Package
in February 2025, a significant proportion of 3i portfolio companies
anticipated falling within the scope of the EU Corporate Sustainability
Reporting Directive (“CSRD”). As a result, a great deal of our
sustainability engagement in FY2025 focused on supporting
companies in preparing for compliance with this regulation
for the first time.
Following the publication of the EU Omnibus Simplification Package,
and in recognition of the onerous nature of the CSRD regulation, the
European Parliament has approved a two-year postponement of the
CSRD. This package may also result in the regulation applying to
fewer of our portfolio companies, although the full implications
remain subject to European legislative approval. In response,
companies are currently reviewing the most appropriate course
of action, taking into account their specific circumstances. For those
that remain in scope, the extended timeline provides headroom
to continue building readiness for this important regime.
In compliance with the regulation, over 50% of portfolio companies
subject to CSRD before the EU Omnibus Simplification Package
simplification have now completed a double materiality assessment
(“DMA”), with several using the process as an opportunity to engage
with a broad range of stakeholders, including customers, finance
providers and employees. Through our sustainability data collection
exercise, we were able to gain insights into the sustainability topics
most commonly identified as material through these assessments.
These included portfolio companies’ own workers as well as workers
in their value chain, climate change, pollution, business conduct,
and resource use and circular economy.
3i’s engagement on CSRD readiness has included:
• supporting companies with their DMAs and data gap analyses;
• assisting in the identification of appropriate reporting tools and
advisory support; and
• helping scope CSRD implementation projects.
In September 2024, we hosted our third portfolio-wide session
focused on CSRD readiness, supported by a specialist adviser.
During the session, portfolio companies Royal Sanders and
BoConcept shared first-hand experiences of undertaking DMAs,
while the adviser addressed common challenges and frequently
asked questions raised in advance. This webinar followed two earlier
forums held on this topic in 2023 and 2024, reflecting our ongoing
engagement and support on this key regulatory topic.
We also supported our portfolio companies on a case-by-case basis
for their specific regulatory requirements.
Sustainability
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Sustainability risks in our portfolio
Through our pre-investment assessment and subsequent monitoring and engagement, we have identified a number of key sustainability risks
that our portfolio companies are exposed to. These, together with applicable mitigating actions, are summarised in the table below.
Key risk
Mitigation
Climate change
Risk of financial or operational losses due
to the physical impacts of climate change
or to the transition to a low-carbon economy
Climate-related risks and mitigation strategies are addressed in our report on portfolio
company engagement activities (pages 46-47) and detailed further in our TCFD disclosures
(pages 58-68).
Human rights
Risk of adverse human rights impacts arising
from the actions or operations of portfolio
companies or their supply chain
3i’s approach to human rights, set out in our RI policy, includes a commitment not to invest
in businesses which we consider unethical, including those that do not respect workers’ rights.
Examples of engagement and mitigation activities are described on page 45.
Occupational health and safety
Risk of injury or harm to employees and
contractors due to inadequate health and
safety practices
The safety and wellbeing of employees across the portfolio is a priority. We monitor health and
safety data through our sustainability assessments and incidents are recorded on our central
risk register. We support companies in maintaining robust policies and procedures, and in
setting up clear board-level oversight, appropriate incident management and adequate
resourcing for to this area.
Examples of engagement and mitigation activities are described on page 45.
Environmental and social regulation
Risk that evolving sustainability-related
regulations or sudden directional changes
could impact the operational or financial
performance of portfolio companies
We ensure that portfolio companies stay informed about relevant regulatory developments,
assess potential impacts, and prepare for compliance.
Examples of engagements activities are described on page 48.
Cyber security
Risk of disruption, data loss or financial
impact from cyber attacks or data breaches
We consider cyber resilience as a key component of good corporate governance for our
portfolio companies. We conduct an annual assessment of portfolio company cyber maturity
which identifies appropriate remediation actions, and discuss the findings with management
teams. We encourage the sharing of best practice between portfolio companies and held a
CTO forum for portfolio companies in FY2025.
More information on how we manage portfolio cyber risks can be found in the Risk section,
on page 93.
Fraud
Risk of financial loss due to
fraudulent activity by
internal or external actors
Fraud risk is monitored through our investment and portfolio management processes. We seek
to ensure that portfolio companies have adequate governance structures and resources to
manage this risk. Fraud incidents are logged and shared among investment teams.
Sanctions
Risk of legal or reputational harm arising
from violations of economic sanctions
imposed by international bodies or
individual countries
3i’s policy is to comply with all applicable UK and international sanctions, both directly and
in relation to its investment activities. Adherence to our sanctions policy is monitored by the
compliance team.
Changing consumer preferences
Risk that companies may lose relevance if
they fail to adapt to evolving expectations
from consumers
We encourage portfolio companies to understand their material environmental and social
impacts and respond to shifting market developments and customer or consumer preferences,
by adapting their commercial offering to meet stakeholder expectations.
Sustainability
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Action’s sustainability progress
Action believes that it is possible to continue to offer its assortment
at the lowest price, while continuing to invest in the quality and
sustainability of its products. Its comprehensive Action Sustainability
Programme is structured around four pillars: people, planet, product
and partnership. It sets out Action’s ambitions on the development of
its people, on climate, on the sustainability and quality of its products,
on ensuring minimum social and environmental standards in its supply
chain and on community partnerships.
Since we became a long-term shareholder in
Action in 2011, we have supported it as it has
developed its sustainability strategy. Action
performed its first double materiality assessment
in 2023 and updated it in 2024, identifying eight
material sustainability topics. We will cover
progress on two of these in this section. Please
refer to the Action Update 2024, linked below, for
more detail on these and other material topics.
Progress on material topic:
energy and emissions
Since establishing its emissions baseline in 2021,
Action has focused on opportunities to reduce its
operational footprint, while delivering strong
growth in its network of stores and distribution
centres. A key milestone was achieved in February
2025, when the SBTi validated Action’s near-term
emissions reduction targets for Scopes 1-3.
Action has committed to reducing Scope 1 and 2
emissions by 60% by 2030, from its 2021 baseline
year. To date, the company has already achieved
a significant proportion of this target, whilst
opening 935 new stores in the same period, with
a 51% reduction delivered through disconnecting
all stores from gas (excluding 67 stores that use
externally provided heating), transitioning to 90%
renewable electricity across sites, adopting energy
efficiency measures such as LED lighting and
smart meters, and installing solar panels at seven
out of its 15 distribution centres. In 2024, Action
also switched to renewable diesel (HVO 100) for
its owned trucks. Going forward, all new
distribution centres will be gas-free and built
with the ambition of achieving the “outstanding”
BREEAM certification. On the back of strong
performance to date, in 2025 Action will formally
increase its ambition for Scope 1 and 2 emissions
reduction from 60% to 75% by 2030. The company
is on track to meet this ambitious target, taking
into account the planned increase in the number
of Action stores and distribution centres in the
coming years.
The company calculated its Scope 3 emissions
for the first time in 2023, illustrating that these
emissions account for most of Action’s total
carbon footprint (99.8% for 2024). To address this,
Action has committed to ensure that suppliers
responsible for 80% of its emissions set their own
science-based emission targets by 2029. To make
progress towards this target, Action will launch
an engagement programme for supplier in 2025,
providing support where needed, with an initial
focus on suppliers with the highest emissions.
Action has also put in place agreements with its
most significant ocean freight carriers to use eco-
fuels for shipments from Asia to Europe. In 2024,
these eco-fuels reduced emissions by 42,495
tonnes of CO2e.
Progress on material topic:
responsible sourcing
Action takes responsibility for ensuring that workers
in its supply chain have a safe working environment
where their human rights are respected, and
suppliers are required to acknowledge Action’s
Ethical Sourcing Policy, which sets out minimum
standards in areas such as forced labour, health
and safety, pay and working rights.
Action is committed to full value chain transparency
by 2030, to meet its objective of knowing where its
products are manufactured and by whom. The
company’s current priority is to achieve 100%
transparency for all final producers of products
excluding A-brands in 2025 (99% of private label
achieved in 2024), and aims to extend this to all
white-label products by the end of 2025.
Action requires all its suppliers sourcing from one
or more risk countries to be members of amfori
BSCI (Business Social Compliance Initiative) in
order to demonstrate their commitment to social
compliance and transparency in value chains.
Additionally, all factories in high-risk countries
are required to have a valid social compliance
audit report.
Action has an ongoing programme of supplier
assessments, including full and repeat audits,
as well as spot checks. It also provides the ‘speak
for change’ whistleblowing programme, which
resulted in the uncovering of a number of
violations in the year, most of which were fully
remedied, with the remainder in the course of
resolution.
Pages 20-23
Action
Action Update 2024
www.action.com
Sustainability
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3i Group plc | Annual report and accounts 2025
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Absolute reduction
of Scope 1 and 2 CO2e
emissions vs 2021
51%
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Sustainability
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3i Group plc | Annual report and accounts 2025
51
Sustainably sourced
cotton, timber and cocoa1
100%
Factories in risk countries
covered by assessments
95%
1
Excluding A-brands.
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2
Recruit and
develop a diverse
pool of talent
Our people are our most valuable
asset. Recruiting, retaining and
developing talent is therefore
our priority.
Our recruitment, promotion and
reward processes are based solely
on merit. As an equal opportunities
employer, we prohibit all forms of
discrimination.
We foster an open and non-
hierarchical culture and provide an
inclusive and supportive working
environment with opportunities for
training and career development.
We promote the physical and
mental well-being of our employees.
We value diversity and believe that
a variety of perspectives enhances
our decision making.
223
22
employees1
as at 31 March 2025
nationalities
as at 31 March 2025
1
Global employee headcount.
Diversity, equity and inclusion strategy
and initiatives
We cultivate an inclusive environment for existing and prospective
employees, which respects, involves and leverages diverse talent for
greater organisational good. Our primary focus is to hire the best
people based on merit. Gender and ethnic diversity, as well as
diversity of thought, perspective and background are also important.
We have made reasonable progress in enhancing diversity within
our organisation across a number of senior investment and non-
investment roles. We aim to continue to improve diversity within
our ranks by considering diversity in all recruitment processes.
We do not have any formal diversity targets, as it is not feasible for
us to implement any in light of the small size of our organisation,
as well as our low turnover and recruitment volumes. We recognise,
therefore, that achieving better diversity for us will continue to be
an incremental journey over many years, and we aim to build
on our progress with a number of initiatives.
Our Diversity, Equity and Inclusion (“DE&I”) steering group, chaired
by our Chief Human Resources Officer and with members drawn
from across the organisation, continues its discussions on potential
initiatives to improve our performance in this area.
During the year, we started the third cohort of our Leading with
Impact Programme, through which we encourage leaders to reflect
on personal and group biases, with the objective of gaining insights
into how these influence their everyday behaviours and decision
making. To date, 22 senior team members have taken part in this
programme.
Our internal mentoring programme remains active and contributes
to our DE&I efforts, by ensuring that mentees receive personalised
guidance aligned with their individual needs and career aspirations.
Our mentors undergo training in bias awareness and inclusion,
building their DE&I knowledge, skills and confidence. This programme
is open to all employees across all geographies and levels of seniority
and supports our wider goal of creating a diverse pipeline of talent,
based on the principles of merit, fairness and equity.
We place great importance on diversity of thought and perspectives.
Recognising its significance, we have been evaluating our individual
and team dynamics to enhance effectiveness and foster inclusivity.
Having performed the Myers Briggs Type Indicator assessment
across the organisation in previous years, we continue to run the
assessment sessions for new joiners. The assessment is one of the
most widely used tools for understanding normal personality
variations and a great instrument to help shape the professional
development of individuals and teams.
Our Equal Opportunities and Diversity and Global Recruitment
and Selection policies provide that all 3i employees, contract workers
and job applicants must be treated fairly and be offered equal
opportunity in selection, training, career development, promotion
and remuneration. These policies are available to all employees
through the internal employee portal. No incidents of discrimination
were reported in FY2025.
Read more
www.3i.com/sustainability/sustainability-policies
Sustainability
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Gender diversity
We recognise the importance of achieving better gender diversity at 3i
and believe we are moving in the right direction over time, within the
constraints of a small organisation with modest staff turnover. Of the
18 new hires we made during the year, nine were female and nine
were male1.
As at 31 March 2025, 3i’s total of 223 employees was broken down
as follows, based on biological sex1:
Female
Male
Total
3i employees
88
135
223
Senior managers2
5
20
25
1
Note that we refer to “female” and “male” when discussing biological sex and to “women” and “men” when
discussing gender. The information of biological sex is gathered through employees’ legal documents shared
with us.
2
Senior managers include Simon Borrows, James Hatchley and Jasi Halai, our Chief Executive, Group Finance
Director and Chief Operating Officer, who are also Board members. This disclosure is based on the criteria set
out in Section 414C of the Companies Act 2006. This data is different to the data provided for the FTSE
Women’s Leader review which defines senior management as Executive Committee members and their direct
reports (excluding personal assistants and administrative staff). Using that definition, out of 58 senior
managers, 16 were female while 42 were male as at 31 October 2024.
Gender diversity has long been a challenge in the investment
industry. According to the BVCA and Level 20 Diversity & Inclusion
Report 2023, there have been positive developments, but progress
towards gender parity remains slow across the industry: women
made up 40% of the UK private equity and venture capital workforce
in 2022 (38% in 2021), but only 24% of UK investment team
professionals (20% in 2020). Slow progress towards gender parity has
been largely attributed to: (i) a narrow talent pool, as typical feeder
industries (such as investment banking, accounting and consulting)
remain male-dominated, particularly at more senior levels; (ii) other
pipeline issues related to gender imbalances in graduate talent with
finance, economics and STEM degrees; (iii) a perception of poor
work/life balance, both in the investment industry and feeder
industries; (iv) a lack of relevant role models; and (v) the perception
of a male-dominated culture.
Achieving better gender diversity in our industry will take many years
and will require action on multiple fronts, including early-stage
education and advocacy efforts in schools and universities, alongside
proactive measures by investment firms to enhance recruitment
practices, promote flexible working and improve parental support
policies. Our HR team periodically reviews our employment polices
to ensure they are competitive and compliant with local practices.
We continue our contribution to industry-wide work and advocacy
on gender parity through a number of industry associations and by
participating in forums and initiatives that promote the advancement
of women in the investment sector. 3i is a member of Level 20 in the
UK and part of Synergist Network, a US national network of women
in investing, focused on connecting women in the first decade of
their investing careers and providing them with the infrastructure
and network to support long-term success.
We have also signed up six employees to join this year’s “Executive
Leaders” and “Rising Leaders” Programmes with WeQual, a global,
peer-led community for large organisations seeking to support,
connect and develop their women leaders.
3i is an official sponsor
of Level 20
Level 20 is a not-for-profit organisation dedicated to
improving gender diversity in the European private equity
industry. It is sponsored by over 120 private equity firms.
Its ambition is for women to hold at least 20% of senior
positions in this industry. Level 20 works to empower women
who already work within the industry, encourage new talent
to join and provide leadership teams with insight and best
practice solutions to help them address current gender
imbalances within the industry and their firms. Its mission
and goal are underpinned by five key initiatives:
• Mentoring and development
• Advocacy and sponsor support
• Networking and development events
• Outreach and internships
• Research
Read more
www.level20.org
3i participates in the GAIN Empower
Investment Internship Programme
(in partnership with Level 20)
GAIN’s (Girls Are INvestors) mission is to empower and
educate the next generation of investment professionals
by providing a platform for learning, development and
networking. GAIN champions gender equality and strives
to equip young women and non-binary students with the
knowledge, skills and resources necessary to succeed in the
world of investment management. Through their events,
programmes and community, GAIN aims to foster a culture
of continuous learning, growth and innovation in the
investment industry. Among the initiatives managed by
GAIN is a summer GAIN empower investment internship
programme, open to women and non-binary students across
the UK, that gives the opportunity to learn about and gain
experience in investment management during a summer
internship. 3i was one of 99 firms participating in the 2024
summer internship programme, taking on three interns for
paid internships. We will renew our participation in the
scheme with two further interns joining 3i’s investment teams
for paid internships in the summer of 2025. In addition to the
internship programme, a number of our employees are
taking part in the GAIN one-to-one mentoring programme,
both as mentors and mentees.
Read more
www.gainuk.org
Read more
www.3i.com/sustainability/sustainability-policies
Sustainability
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Ethnic diversity
We believe we have made some progress with the representation
of ethnic minorities through all ranks of the organisation, including
at Board level, where now two out of 10 directors are from an ethnic
minority background. We recognise, however, that there is more to do.
We publish some limited statistics on employee ethnic diversity,
in our data appendix, available on our website. This data is partial for
a number of reasons, including legal restrictions in certain countries
on the collection of this data and that where we have been able to
conduct staff surveys on a range of diversity factors (namely in our
UK and US offices) survey responses were voluntary, and a significant
proportion of employees declined to respond.
We are committed to advocating for better representation of ethnic
minorities in our industry and, since 2021, have been participating
in the 10,000 Black Interns programme (formerly #100BlackInterns)
organised by the 10,000 Interns Foundation.
3i participates in the 10,000 Black Interns
programme by the 10,000 Interns
Foundation
3i has partnered with the 10,000 Interns Foundation since
it first organised internships in the summer of 2021 to help
transform the horizons and prospects of young black people
in the UK. The 10,000 Black Interns programme began in
2020 with a focused ambition: to provide 100 aspiring Black
interns with valuable experience within the Investment
Management industry. The success of this initial effort
inspired a more ambitious vision – to create 10,000
internships across all industries throughout the UK by 2026.
The initiative has partnered up with firms across 35 sectors,
delivering internships across a range of business functions.
Since its launch, the programme has garnered great support
with approximately 1,000 companies offering internships to
black students in the UK, as a way of attracting a more
diverse range of talent to their sectors. We welcomed two
students for a paid internship in our investment teams in
the summer of 2023 and one in 2024. We look forward to
welcoming two students for a paid internship in 2025.
Read more
www.10000internsfoundation.com
Employee engagement
We encourage a collaborative culture, ensuring open communication
between employees and senior management. As a small
organisation, we operate a relatively flat structure with few
hierarchies, which facilitates direct interaction and accessibility.
In addition, our Executive Committee maintains an open-door policy,
encouraging dialogue at all levels. We welcome feedback from
employees to senior management through informal conversations
and more formal forums, including regular team meetings, as well as
through the annual appraisal process. Managers throughout 3i are
expected to keep their teams informed of developments and to
communicate financial results and other matters of interest.
Additionally, we organise regular conferences for our Private Equity,
Infrastructure, Professional Services and global support teams to review
progress against our strategy, align our goals and discuss future plans
in an open and relaxed setting with all employees involved.
The Board of Directors typically holds two of its meetings every year
in our international offices, of which one is in our Amsterdam office,
in recognition of the importance of our investment in Action. This
provides an opportunity for non-executive Directors to meet the local
teams, often in a more informal setting. In FY2025, the Board held
meetings in our Frankfurt and Amsterdam offices, as well as in
London. The non-executive Directors also have other opportunities
to engage with employees, for example by attending our semi-
annual portfolio company reviews. These important meetings provide
the non-executive Directors with an insight into how our investment
business operates and into our culture. Employees also enjoy this
opportunity to interact with the Board.
At 3i, we actively encourage and facilitate employee share ownership
through variable compensation and share investment plans. The
engagement and the sense of ownership we have fostered over
the years are reflected in low employee turnover rates.
FY2025
FY2024
FY2023
FY2022
FY2021
Participation in UK SIP1
89%
90%
87%
89%
88%
Voluntary employee
turnover rate (global)
7.6%
6.0%
9.5%
12.2%
7.3%
1 Proportion of UK-based employees who subscribe to a Share Incentive Plan available to UK employees only.
Living wage
3i is an accredited London Living Wage Employer. This means that
every member of staff based in London, including contracted
maintenance and reception teams, earns at least a ‘living wage’
which is an hourly rate higher than the UK minimum wage and is
set independently, updated annually and based on the cost of
living in London.
Outside of London, our overseas offices tend to employ only
investment and professional services staff, as well as support staff,
who are remunerated above applicable minimum or living wage
requirements.
Human rights
Our policy is that we do not procure services from, nor invest in,
businesses which make use of slavery, servitude, human trafficking,
forced labour, exploitation, compulsory labour or harmful child labour.
Sustainability
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These policies are consistent with internationally recognised human
rights principles such as the UN Global Compact. We comply fully
with applicable human rights legislation in the countries in which we
operate, for example covering areas including freedom of association
and the right to collective bargaining, equal remuneration and
protection against discrimination. We also encourage our business
partners and suppliers to adopt the same standards with respect to
human rights. Considering the nature of our business, our employees
are not unionised, nor do they engage in collective bargaining.
We published our statement on modern slavery for the financial year
ended 31 March 2024 on our website in September 2024 and will
update this statement in September 2025.
Learning and development
We can only achieve our strategic objectives if we continue to attract,
retain and develop capable people. We therefore provide our
employees with opportunities, experience and training to contribute
to the organisation’s success, realise their potential and develop their
knowledge and capabilities.
We encourage employees to take responsibility for their own
development by working with their line managers to devise personal
development plans that align with their individual aspirations and 3i’s
objectives. Given the specialised nature of many of the roles in 3i, an
emphasis is placed on work-based learning, with the provision of
development opportunities supported by targeted training and
mentoring. This is supplemented by formal courses conducted both
internally and externally and usually with a multinational group drawn
from across the countries in which 3i operates.
In FY2025, we provided formal specialist training on areas and skills
including presentation and communication skills, procurement and
maximisation of portfolio potential, GenAI and science-based
emissions reduction targets. We also offered executive coaching
for some employees. Our investment executives regularly receive
education on issues of wider topical interest and impact.
We also have comprehensive induction plans for all new joiners,
including sessions with different teams across the business to help
facilitate integration.
Our formal appraisal and objective-setting process, held annually for
each employee, is key to their personal development. During this
process, we measure each employee’s performance against their
agreed objectives and 3i’s values to inform decisions on
remuneration, training, career development and future progression.
We encourage employees to make use of an online facility to obtain
360-degree feedback as part of this process. During the year, we
updated our formal appraisal process with greater emphasis on self-
evaluation, to spark deeper discussion on personal performance and
development between employees and their line managers.
Employee wellbeing
We recognise the importance of supporting the wellbeing of our
employees by providing a healthy working environment and work/life
balance. All employees enjoy a broad range of formal benefits
aligned with local custom and practice and often enhanced relative
to the statutory minimum. Summaries of our employment and benefit
policies are available on our website.
Physical health
We promote the physical wellbeing of our employees. For example,
in the UK, we offer our employees annual medical and dental
insurance. All UK employees also qualify for annual health checks
and have access to a private Digital General Practitioner if they are
members of the UK private medical insurance.
3i continues to provide services with the aim to support employees
going through or approaching menopause. Our Menopause Policy
formalises the details of available support. Specifically, our UK-based
employees have access to a range of menopause services, including
access to Bupa’s Women’s Health Hub, a consultation and a follow-
up with a menopause-trained GP, personalised clinical advice
on managing symptoms and access to menopause-trained nurses
on a 24/7 basis through the Bupa Anytime Healthline for a period
of one year.
For a number of years, we have provided the services of a personal
fitness and nutrition adviser, bookable free of charge for one-on-one
fitness, nutrition and broader wellness advice sessions. Our adviser also
hosts twice-weekly fitness and Pilates classes which are complimentary
for employees and accessible across our office network via
videoconferencing. Recognising the unique needs of our female
employees, our adviser offers specialised sessions focused on exercise
and nutritional strategies to support them with their needs.
Following the move to new headquarters in London, 3i now offers
24/7 free gym access and subsidised food menu options chosen
by the nutrition adviser to its UK-based employees.
Mental health and employee assistance
We recognise the importance of mental wellbeing for our employees.
We maintain a pool of qualified ‘mental health first aiders’ who have
received dedicated training for a deeper knowledge, awareness and
confidence to support anyone who is experiencing poor mental
wellbeing or mental ill-health. Over the past five years, most
employees have participated in workshops facilitated by a specialist
mental health consultancy. These workshops offer a basic
understanding of mental health, strategies to develop and
strengthen it, and insights to recognise the early warning signs of
struggle. In addition, our employees have access to Headspace for
Work, the leading mindfulness-based mental health app offering
meditations and exercises for stress, focus, sleep, and movement.
All UK-based employees have access to an Employee Assistance
Programme that offers free, confidential telephone counselling on
a range of personal and work-related issues and problems, as well
as face-to-face counselling services. The service also provides legal
and financial advice, and other information and services, and is run
by Health Assured, an independent external service provider.
Employees who are members of the UK private medical insurance,
for which 3i covers premiums, have access to up to 10 sessions per
annum of psychological support, without a requirement for General
Practitioner referral.
Flexible working
Employees are provided with the tools to work remotely and can
apply to work flexibly to manage personal or family commitments,
as and when required. Flexible working options include remote
working, flexible hours and job sharing through part-time working.
Sustainability
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3
Act as a good
corporate citizen
We expect our employees to act
with integrity, accountability and a
strong sense of ownership. They are
encouraged to approach their roles
with ambition, rigour and energy.
We embed that culture in our
policies and processes.
Our values are:
•Ambition
•Accountability
•Integrity
•Rigour and energy
Read more
www.3i.com/about-us/our-values
Governance
Good corporate governance is fundamental to 3i and its activities
and is critical to the delivery of value to our stakeholders. The Board
approves corporate values and the Executive Committee sets the
tone and leads by example.
For full details of our governance structure and processes, please
see the Governance section of this report.
Standards of conduct and behaviour
We promote and enforce our standards of conduct and behaviour
through a comprehensive suite of policies and procedures which,
together with our compliance manual and our values, form our code
of conduct. Our policies and procedures are reviewed annually.
Our Internal Audit and Compliance teams perform regular reviews,
which include reviews of compliance with our established standards
of conduct and behaviour. Their findings are reported quarterly to
the Audit and Compliance Committee, which also carries out an
annual review of risk and internal control effectiveness, including
standards of conduct and policy compliance. The Board of 3i’s main
regulated entity, 3i Investments plc, which includes members of the
Executive Committee, also receives quarterly updates.
We evaluate our employees against our values as part of our annual
formal performance review process. In addition, all employees have
a mandatory conduct objective against which they are formally
assessed as part of their annual performance review.
Public policy
Although 3i does not participate directly in party political activity, it
may engage in policy debate on subjects of legitimate concern to 3i,
its staff and the communities in which it operates. We primarily do
this through industry representative bodies such as the British
Venture Capital Association and Invest Europe, where we might
contribute to the formulation of policy positions. Occasionally,
we may engage directly with government and regulatory bodies
on matters of particular and direct importance to 3i and its
businesses. Lobbying must only be undertaken with the prior
approval of the Executive Committee and in a manner that is
lawful and adheres to 3i’s values.
Compliance and policies
Our compliance manual includes policies on:
• Anti-bribery and corruption
• Hospitality, gifts and inducements
• Political donations
• Public policy and activity
• Data protection
Read more
www.3i.com/sustainability/sustainability-policies
Sustainability
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Transparency and openness
We believe that all employees and people connected with 3i deserve
fair treatment and respect for their fundamental rights and therefore
encourage everyone to speak up and report their concerns.
Where any employee discovers information which they believe shows
malpractice or wrongdoing within 3i, under most circumstances they
will raise concerns with their line manager, who will pass this
information to the appropriate Executive Committee member.
Should this route not be suitable, then the employee may approach
the Directors of Compliance or Internal Audit, or the General Counsel
and Company Secretary, who have been designated to provide
impartial advice on the appropriate course of action to follow.
Alternatively, all employees across all our office locations may express
and report their concerns on a completely confidential and
anonymous basis to an independent ‘hotline’ whistle-blowing service
provided by EthicsPoint, an independent, external party. Our policies
make clear that there should be no fear of reprisal or victimisation or
harassment for whistle blowing. There were no incidents of whistle
blowing in the year.
Environmental impact
With fewer than 230 employees globally, 3i has a relatively small
direct impact on the environment and other sustainability issues. Our
impact on the environment, society and communities is determined
largely by our portfolio. We have set near-term science-based targets
for the reduction of both our direct emissions and those associated
with our portfolio. We are committed to minimising our direct impact
on the environment through more efficient use of resources and
energy and to improving our environmental performance through
the reduction of emissions and waste wherever possible. We have
an Environmental Management System that is proportionate to the
operational size and environmental risk profile of our business. We
monitor our environmental performance on an annual basis through
a number of environmental metrics. Our GHG emissions and those
associated with our portfolio, as well as progress against our targets,
are reported in our TCFD disclosures.
We use the precautionary principle to manage environmental risk for
our business and our portfolio proactively.
Pages 80-84
Risk management
Pages 42-51
Invest responsibly
Pages 58-68
TCFD disclosures
Environmental information
www.3i.com/sustainability/corporate-citizenship/environment
Community
3i is keen to support charities which relieve poverty, promote
education and support elderly and disabled people.
The charities we partner with are supported on the basis of their
effectiveness and impact. Our charitable giving for the year to
31 March 2025 totalled £1.2 million. This included supporting our nine
charity partners, matching staff fundraising, making a number of
one-off donations and promoting the give-as-you-earn scheme
in the UK, which is administered by the Charities Aid Foundation,
and through which 3i matched c.£55,000 of employee donations.
Read more
www.3i.com/sustainability/corporate-citizenship/charitable-giving
Sustainability
Act as a good corporate citizen continued
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Our TCFD
disclosures
These disclosures reflect 3i’s
response to the TCFD
recommendations. They set out how
we incorporate climate-related risks
and opportunities for our business
and portfolio into our governance,
strategy and risk management.
They also include our direct GHG
emissions metrics, climate-related
metrics associated with our
portfolio, as well as emission
reduction targets for our operations
and our portfolio.
Regulatory background
3i Group plc is an Alternative Investment Fund managed by
3i Investments plc, a UK Alternative Investment Fund Manager.
3i Investments plc is a wholly-owned subsidiary of 3i Group plc.
This TCFD report is published in line with the requirements outlined
in the FCA’s Environmental, Social and Governance (“ESG”)
sourcebook. They require 3i Investments plc to disclose publicly
specific climate-related metrics and processes as part of a product
report for 3i Group plc based on the TCFD recommendations. These
disclosures also cover the Group’s, including 3i Investments plc’s,
overall approach to climate change in line with the TCFD
recommendations.
The diagram below shows the TCFD reporting requirements for the
entities described above.
3i Investments plc
(AIFM)
3i Infrastructure
plc (AIF)
3i Group plc
(AIF)
Other AIFs in
scope of FCA
TCFD reporting
requirements
ò
Funds with public TCFD product reports
Å
Funds with on-demand TCFD product report
ò
AIFM with entity-level report
This TCFD report should be read in conjunction with the
3i Investments plc TCFD entity report, which is available on
3i’s website, and with the rest of this Annual report, which contains
other relevant information. Specific references are provided where
applicable.
Read more
www.3i.com/sustainability
Governance
TCFD recommendations
Disclose the organisation’s governance around climate-related
risks and opportunities:
• Describe the board’s oversight of climate-related risks and
opportunities
• Describe management’s role in assessing and managing
climate-related risks and opportunities
The management of climate-related risks and opportunities is integral
to our processes and operations, including our investment and
portfolio management activities, with oversight by the Board and
delegated authority to the Chief Executive. In determining 3i’s
strategy and approach to climate change, both the Board and the
Chief Executive, assisted by a number of committees, consider the
laws and regulations of the countries where 3i and its portfolio
companies operate, along with the perspectives of relevant
stakeholders, such as those identified on pages 110-113. The
governance structure is set out in the diagram on the next page.
Sustainability
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Board of Directors
Chief Executive
Audit and
Compliance Committee
Sustainability Committee
Group Risk Committee
Investment Committee
Non-executive oversight
The Board as a whole is responsible for the approval of the Group’s
approach in relation to sustainability matters (including climate-related
matters) and has oversight of the Group’s sustainability strategy,
approach and policies, including our Responsible Investment policy.
It is assisted by the Audit and Compliance Committee in the review
and consideration of any disclosures related to sustainability matters,
including climate-related disclosures.
The Board and Audit and Compliance Committee receive regular
updates on sustainability matters and climate-related issues from the
Chief Executive and members of the Sustainability Committee as they
become relevant and material. In FY2025, the main updates on
climate-related issues included:
May 2024
Review and approval of the FY2024 Annual report
by the Audit and Compliance Committee, including
the TCFD disclosures and other climate- and
sustainability-related disclosures contained
elsewhere in the report
June 2024
Update to the Board on the sustainability risk profile
and progress of the portfolio, following
presentations made to the Group Risk Committee
by sustainability professionals within our investment
teams on the results of the annual sustainability
assessment of portfolio companies in March
September
2024
Update to the Board on Action’s progress on its
sustainability agenda
November
2024
Update to the Board from the Chief Executive on
a number of sustainability-related themes, including
the development and setting of science-based
targets, the second phase of our portfolio climate
change scenario analysis, and the implementation
of a portfolio sustainability data gathering tool
December
2024
Update during the Board Strategy Day on progress
towards portfolio sustainability objectives and future
trends in sustainability
Board skills and training
The Board received dedicated training on sustainability, including
climate change, over the past two years. This training has provided
the Directors with the tools necessary to improve their oversight of
the Group’s approach to climate change and the resulting impacts
on the portfolio and investment strategy, and to inform the Board’s
decision making.
During FY2025, some of the Directors attended a learning session on
3i’s science-based emissions reduction targets. The session explained
how and why we set the targets, the commitments involved in our
targets and our plans to achieve them.
Our Directors also regularly attend our semi-annual portfolio
company reviews, which include discussions of the material aspects
of portfolio companies’ climate strategy.
A number of our Directors have experience of assessing climate-
related factors and have received training on this topic through other
executive and non-executive roles.
Executive responsibility
Day-to-day accountability for sustainability, including climate-related
issues, rests with executive management and, in particular, the Chief
Executive. The Chief Executive is supported by a number of
committees in overseeing and monitoring policies and procedures
and addressing issues that arise. These include the Sustainability
Committee, Investment Committee and Group Risk Committee.
Sustainability Committee
The Sustainability Committee membership, shown in the diagram
below, is drawn from a range of investment and non-investment
functions across the Group. The Sustainability Committee also
benefits from input from relevant functional areas as required.
General Counsel and Company Secretary (Chair)
Central functions
Investment teams
Group Finance Director
Sustainability Director,
Private Equity
Chief Operating Officer
Sustainability Director,
Infrastructure
Group Investor Relations
and Sustainability
Strategy Director
Group Treasurer
Sustainability
Our TCFD disclosures continued
3i Group plc | Annual report and accounts 2025
59
ò Oversight
ò Implementation
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The Sustainability Committee focuses on three main areas:
• reporting to the Chief Executive (directly and through the Group
Risk Committee and Investment Committee) on relevant
sustainability matters, including climate-related risks and
opportunities, and developing and reviewing policies, processes
and strategies to manage sustainability risks and opportunities
for the Group and its investment activities;
• developing and recommending the Group’s sustainability
approach (including a climate strategy) to the Chief Executive
for review by the Board; and
• coordinating and facilitating sustainability-related activities
and initiatives across the Group.
The Committee considers relevant legal and regulatory requirements
and industry standards, as well as best market practice, and monitors
progress against its agenda.
The Sustainability Committee met formally five times in FY2025 and
held an additional informal meeting to discuss the outcomes of the
COPs on climate, biodiversity and desertification and the UN Plastics
Treaty talks. The Sustainability Committee’s activities and focus for
the year are described throughout this TCFD report.
Investment Committee
The role of the Investment Committee is described on page 82.
In performing its activities, the Investment Committee ensures that
material sustainability matters, including relevant climate-related risks
and opportunities, are properly identified, assessed and managed
in the course of our investment, divestment and portfolio
management activities.
The Investment Committee is chaired by our Chief Executive and
comprises individuals drawn from our central functions (including
the Group Finance Director and Chief Operating Officer), as well
as from our Private Equity and Infrastructure investment teams
(including the heads of Private Equity and Infrastructure and other
senior investment team members). It meets on an ad-hoc basis
to discuss potential new investments, divestments and significant
portfolio activity.
Group Risk Committee
The role of the Group Risk Committee (“GRC”) is described on
pages 82 and 83. As part of its responsibilities, it identifies the
principal risks and new and emerging risks, including climate-related
risks, facing 3i, as well as the associated mitigating actions and key
risk indicators. During the year, the GRC received semi-annual
updates on our sustainability approach and strategy from the
Sustainability Committee, as well as semi-annual updates on the
sustainability progress of the portfolio and associated risks and
opportunities, including climate-related matters.
This committee also maintains oversight of the Responsible
Investment policy and considers and recommends to the Board
for approval amendments to this policy as required, taking into
account legal, regulatory and market developments regarding
climate change.
The GRC, which meets four times a year, is chaired by the Chief
Executive, and also comprises the Group Finance Director, Chief
Operating Officer, the General Counsel and the Chief Human
Resources Officer, as well as the heads of our Private Equity and
Infrastructure businesses and a number of functional heads drawn from
across the organisation, including the Group Compliance, Internal
Audit and Investor Relations and Sustainability Strategy Directors.
Dedicated sustainability resource
We have dedicated sustainability resources embedded across
the organisation, including:
• a Sustainability Director and a Sustainability Senior Associate
in our Private Equity investment team;
• a Sustainability Director and a Sustainability Senior Associate
in our Infrastructure investment team; and
• a Sustainability Senior Manager in the Group Investor Relations
function to coordinate the Group’s work on sustainability and
implement Group-wide projects.
This resource is key in implementing the Sustainability Committee’s
many activities.
Participation in industry working groups
We are part of the Initiative Climat International (“iCI”), a global,
practitioner-led community of private markets investors that seek
to understand and manage climate-related risks better. As of
March 2025, the iCI had 290 members globally, representing more
than US$4 trillion in AUM. iCI members share a commitment to
reduce the carbon emissions of private companies and secure
sustainable investment performance by recognising and
incorporating the materiality of climate risk. We participate
in iCI’s Net Zero working group.
In March 2025, we signed up to the ESG Data Convergence Initiative
(“EDCI”) which facilitates the effective collection and reporting of
ESG data across the private equity industry and enables us to
benchmark our performance across a broad peer set.
As members of the BVCA, we contribute to the BVCA’s
engagements with relevant bodies on relevant sustainability topics,
including climate change.
Executive remuneration
The Executive Directors receive, in addition to their salary, an annual
bonus and long-term share incentive awards based on the
achievement of a number of performance conditions. For FY2025,
annual bonuses for executive management were awarded based
on a balanced scorecard of both financial and strategic measures
agreed by the Remuneration Committee of the Board, alongside
a consideration of the wider context of personal performance
(including values and behaviours), risk, market and other factors.
Among the strategic and qualitative measures included in the
balanced scorecard to determine the FY2025 annual bonus award,
up to 5% of the maximum annual bonus opportunity was tied to
progress against a number of sustainability targets. The
Remuneration report on pages 135 to 147 sets out the Remuneration
Committee’s assessment of the performance of the Executive
Directors against the scorecard’s sustainability objectives. This TCFD
report and the broader Sustainability section of this Annual report
describe the measures taken by the Group to make progress against
these objectives.
Pages 80-84
Risk management
Page 101
Governance framework
Pages 135-147
Directors’ Remuneration report
Sustainability
Our TCFD disclosures continued
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Strategy
TCFD recommendations
Disclose the actual and potential impacts of climate-related risks
and opportunities on the organisation’s businesses, strategy,
and financial planning where such information is material:
• Describe the climate-related risks and opportunities the
organisation has identified over the short, medium,
and long term
• Describe the impact of climate-related risks and
opportunities on the organisation’s businesses, strategy,
and financial planning
• Describe the resilience of the organisation’s strategy, taking
into consideration different climate-related scenarios,
including a 2°C or lower scenario
Our investment strategy is to make a small number of new
investments each year in our Private Equity and Infrastructure
businesses, selected within our target sectors and geographies on
the basis of their compatibility with our return objectives. We screen
investments against our Responsible Investment policy, which has
been in place for many years and is reviewed as appropriate, and
most recently in May 2025. We believe that the careful assessment
and management of sustainability factors, including climate-related
risks and opportunities, can be an important lever for value
preservation and, at times, for value creation in our portfolio.
We therefore integrate this assessment into our investment screening
and portfolio management processes and provide the necessary
training and guidance to our investment professionals. These
processes are described on pages 43 to 44 of this Annual report.
Resilience of our strategy to climate-related risks
Our business model is simple: we invest our proprietary capital
and manage a small number of third-party funds, mainly in our
Infrastructure business. We do not manage products with specific
sustainability mandates or labels. Our investment and portfolio
construction approach is flexible and not constrained by overly
prescriptive investment mandates or by limited duration funds, given
the permanent nature of our proprietary capital. The third-party funds
we manage in our Infrastructure business are either permanent or of
very long duration. We make majority or, in a small number of cases,
significant minority investments in our portfolio companies, and exert
influence on their boards.
This flexibility in mandates and holding periods is a considerable
strength. It supports our ability to manage climate-related risks and
opportunities and pivot our investment towards sectors and niches
that can benefit from sustainable growth trends. Combined with the
influence we exert on portfolio companies this has allowed us, for
example, to build a good track record of investment in renewable
energy generation and the energy transition theme in our
Infrastructure portfolio over the last few years. It has also allowed us
to approve investments within our portfolio companies that support
climate change resilience, for example, through a reduction in their
GHG emissions or the development of products and services with
lower associated emissions.
We do not invest directly in extractive industries (including coal, oil
and gas), albeit a small number of our investments do have exposure
to some of these sectors.
Climate change scenario analysis
Climate change scenario analysis can be a useful tool to assess the
potential future exposure of a portfolio to climate-related risks under
different climate warming scenarios.
We did not perform an updated portfolio-wide climate change
scenario analysis in FY2025, in light of the substantial scenario analysis
work performed in the previous two financial years, and considering
the fact that our portfolio developed only incrementally through
investment and divestment activity during the year.
We are aware that there are political differences in relation to the
climate transition, with diverging regional approaches. This could
result in some delay to transition measures in the markets in which we
and our portfolio operate. If that were the case, the focus of climate
risk management in future years could therefore shift from transition
risks to physical risks. Any such developments would have an impact
on the risk models which we would need to use in future climate
change scenario analyses. We therefore procured a physical risk
assessment tool in April 2025 to facilitate the evaluation of physical
risks in our portfolio through updated climate models on an ongoing
basis (see page 62).
During the year, we did, however, consider potential climate-related
risks and opportunities for new investments where relevant and
material as part of our ordinary due diligence activities described
on page 43.
For completeness, and in compliance with TCFD requirements, we
report below on the key elements of the findings of our most recent
climate scenario analysis, which we carried out in FY2024. These were
already reported in full in the TCFD disclosures we made last year.
The climate change scenario analysis we conducted in FY2024, with
the support of a specialist consultancy, used the scenarios described
in detail overleaf and was carried out in two stages. As an initial step,
we performed an analysis of approximately half of our portfolio
companies by number. For each company, we assessed potential
physical and transition risks using sector information and the
geolocation of their main operations and suppliers. This first step
helped us to identify potential hot spots of inherent climate-related
risks within this part of our portfolio and to select a small number
of portfolio companies for the second step.
As a second step, using additional data and in-depth interviews with
portfolio companies or investment teams, we carried out a more
detailed assessment of inherent and residual physical and/or
transition risks for these portfolio companies. This allowed us to
improve our assessment of the residual risk levels for each risk driver
significant to the portfolio companies analysed, and to identify
additional engagement levers that we can use, as significant
shareholders, to drive progress. We communicated the results
of this analysis to the relevant portfolio companies.
Pages 42-51
Invest responsibly
Sustainability
Our TCFD disclosures continued
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Orderly transition – We used an orderly transition scenario, which
assumes that policies to mitigate the impacts of climate change are
introduced early and become gradually more stringent, culminating
in the achievement of global net zero CO2 emissions in around
2050 and likely limiting global warming to below 2°C on
pre-industrial averages.
Under this orderly transition scenario, our portfolio is potentially
exposed to a number of inherent risk drivers and respective
opportunities in the categories described on the next page.
Disorderly transition – A disorderly transition scenario assumes that
climate policies are delayed or divergent, requiring sharper emissions
reductions, achieved at a higher cost and with increased physical risks
in order to limit the temperature rise to below 2°C on pre-industrial
averages by 2050.
Under this scenario, the risks identified as part of the orderly
transition scenario are delayed but amplified in the run-up to 2050,
with a higher potential impact on portfolio companies. For example,
carbon prices could be higher and regulations could have much
quicker implementation timeframes, resulting in higher costs to
achieve compliance. However, the mitigation strategies and
opportunities remain broadly the same and would include investment
in low-carbon products and more resilient and efficient supply chains,
as well as the active monitoring of and compliance with upcoming
regulations and a proactive approach to developing transition plans.
Hot-house world – A hot-house world scenario assumes that no new
climate change mitigation policies are introduced and that only those
that have been implemented already are preserved, that current
commitments are not met and that emissions continue to rise,
resulting in a failure to limit temperature increases, as well as in high
physical risks and severe social and economic disruption.
The climate change scenario analyses we have performed to date
have not identified significant physical risk drivers for the majority
of the portfolio companies assessed in the medium term, with
moderate to low inherent physical risks driven principally by chronic
temperature changes, heatwaves and flooding. A few companies,
however, were identified as having medium or high physical risks
in relation to their own operations or key suppliers. We focused
our attention in the deep dive analysis on some of the companies
identified as having higher risks and have engaged with them with
the results of that assessment.
For our deep dive physical risk analysis, we used a >4°C, SSP5-8.5
2050 climate scenario, which shows an end-of-century
temperature rise of 4.5°C and is considered to be the worst-case
hot-house scenario.
The results of this climate change scenario analysis work were used
to develop a more detailed climate change assessment framework,
which was then incorporated into our overall sustainability risk and
opportunity assessment processes.
We refine our approach to climate scenario analysis on a regular
basis. This iterative process builds on our understanding and on
market and scientific developments over time. To support the
consistent assessment and ongoing monitoring of climate-related
risks and opportunities under different warming scenarios, we
selected a specialist climate risk assessment software tool in April
2025. Once implemented, this tool will draw on third-party models,
data and expertise and improve our ability to identify and track
potential exposures to climate-related risks across the portfolio over
time.
The tool will be updated on an ongoing basis.
Additionally, we expect more of our portfolio companies to perform
their own climate scenario analysis as they grow and mature in this
space, or in response to regulatory requirements. In 2024, Action, our
largest portfolio company which represented approximately 70% of
our portfolio at 31 March 2025, carried out its climate risk assessment
covering both physical and transition risks using the IEA Net Zero
Emissions by 2050 and IPCC SSP5-8.5 scenarios. This analysis
identified Action’s material physical (increased severity and
frequency of extreme weather events and increasing heat and
precipitation stresses) and transition risks (increased product and
activity cost due to regulation and supply chain changes and non-
compliance with reporting requirements), which will ensure that
they are adequately managed.
Value at risk
Following careful consideration, we decided not to conduct an
analysis of value at risk from climate change impacts. Current climate
models to determine value at risk are at an early stage of
development, and do not yet provide sufficiently reliable results for
a concentrated portfolio like ours. Where relevant and possible,
we embed certain climate-related considerations in the valuations
of our portfolio companies. We will continue to assess climate
modelling tools as they develop and will report on this annually.
Viability statement
In addition to the climate change scenario analyses described above,
we have been assessing the potential financial impact of climate
change on our portfolio as a whole for some time through the work
we do to conduct our annual viability assessment (see pages 128 and
129). When preparing our Viability statement, we carry out a number
of tests which consider the impact on the Group of multiple severe,
yet plausible individual and combined stress scenarios, including the
impact that climate change might have on the value of a number of
our potentially more vulnerable assets through changes in regulation,
in consumer preferences, an increase in physical risks and other
business risks. This analysis is carried out over a three-year timeframe,
and is different to climate change scenario analysis, which analyses
the impacts of climate change over a much longer time period.
Because of the diverse exposures of our current portfolio companies
and the flexibility we have in portfolio construction, our analysis
showed that a climate-related stress scenario is unlikely to impact
the viability of the Group over the three-year time period.
Transition to a low-carbon economy
Last year, the Sustainability Committee established that the most
appropriate approach to align 3i and its portfolio to the UK’s net zero
ambitions was to set SBTs, which were validated by the SBTi in
March 2024. We made significant progress towards our portfolio
engagement and electricity generation targets this year. Information
on our SBTs and on the progress we have achieved to date can be
found within the Metrics and targets pillar of this report on page 68.
Sustainability
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Principal climate-related transition risks under the Orderly transition scenario
Risk category
Risk drivers
Time horizon
Potential impact, mitigation and opportunities
Policy and legal
• New regulations
and commitments
Short and
medium term
Potential impact
• Non-compliance with regulations and commitments could result in reputational
damage for 3i and its portfolio as well as in legal fees and fines.
Mitigation
• 3i and its portfolio companies actively monitor the evolution of the regulatory
landscape to ensure that they are prepared for compliance.
• Minimum sustainability requirements within our RI policy include compliance with
applicable laws and regulations.
Opportunities
• Proactivity and early action on compliance with regulations facilitates the exit process.
• Carbon pricing
mechanisms
Medium term
Potential impact
• The introduction of carbon pricing could increase the operating costs of our portfolio
companies directly or through their supply chain.
Mitigation
• Where material, 3i has begun to engage with portfolio companies to identify those
at risk from the introduction of carbon pricing mechanisms, and understand the
potential impacts before addressing next steps.
Opportunities
• Portfolio companies subject to carbon pricing mechanisms could develop low-carbon
processes and products to reduce this impact.
Technology
• Increased investment
required in sustainable
or green technologies
and low-carbon
processes
• Competitor innovation
Medium and
long term
Potential impact
• Increased investments in new technology and processes to reduce carbon emissions
may result in higher costs.
• Successful competitor innovation could result in reduced revenue and market share.
Mitigation
• Portfolio companies monitor their markets to identify potential technology risks and,
with the support of 3i on their boards, assess the new investments required to stay
abreast of developments.
Opportunities
• Investment in lower-emissions products and services could lead to improved
revenues and profitability over time.
Market
• Changing consumer
and investor
preferences
• Unexpected shifts
in market
• Changes in job market
Medium and
long term
Potential Impact
• Changes in consumer preferences in response to climate change (eg preference for
products and services with a lower carbon impact) could result in decreased revenues
for portfolio companies.
• An increasing employee focus on sustainability could make it harder for portfolio
companies to retain and attract talent if they are not perceived to be responding
adequately to the challenges posed by climate change.
Mitigation
• Portfolio companies monitor their offerings against evolving consumer preferences
and employee/potential employee expectations.
Opportunities
• Portfolio companies could invest in innovation to ensure that their products
and services align with evolving consumer preferences.
Reputation
• Stigmatisation
of the sector
• Increased stakeholder
concerns
Short and
medium term
Potential impact
• Stigmatisation and stakeholder concerns may result in decreased revenue and
increased operating costs for certain portfolio companies operating in sectors
perceived as having a high impact on climate change.
Mitigation
• Where material, 3i has begun working with portfolio companies to develop transition
plans and develop their business models to ensure that they transition away from
carbon-intensive sectors or end markets.
Opportunities
• Portfolio companies that adopt a proactive approach to climate transition could
strengthen their market position, particularly in a disorderly transition scenario.
Sustainability
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Risk management
TCFD recommendations
Disclose how the organisation identifies, assesses, and manages
climate-related risks:
• Describe the organisation’s processes for identifying and
assessing climate-related risks
• Describe the organisation’s processes for managing climate-
related risks
• Describe how processes for identifying, assessing, and
managing climate-related risks are integrated into the
organisation’s overall risk management
We recognise the increasing importance of climate-related risks and
monitor them as we do other risks through our comprehensive risk
governance framework, both on a portfolio company level and for
the Group as a whole. The framework is detailed on pages 80 to 84,
and our portfolio sustainability assessment process (which covers an
assessment of material climate-related risks for each portfolio
company) is described on page 43 of this report.
3i’s own operations are not in themselves exposed to material
physical climate risks. We employ 223 people across six offices, all
of whom can work remotely if needed. Nevertheless, the business is
affected directly by climate-related legal, regulatory and reporting
risks, as well as by the related reputational risks.
The majority of 3i’s climate risk exposure is through its portfolio.
We describe our processes to identify and manage climate-related
risks and opportunities in detail under the Strategy pillar above.
Identification, assessment and management
of climate-related risks
We consider climate-related risks on the Group and the portfolio
through our risk management framework, which is coordinated by
the Group Risk Committee and implemented across the organisation
as described in the Risk review. Specifically, in relation to the
management and mitigation of climate-related risks in the portfolio,
we rely, over the life of the investment, on:
• a pre-investment assessment: material climate-related risks are
assessed internally and reviewed as appropriate by external
specialists. This can lead to the Investment Committee requiring
further due diligence to be performed or in investments being
declined. Our climate change assessment framework was
enhanced following the second stage of our climate scenario
analysis in FY2024 and was implemented in our investment process
in FY2025;
• our ongoing portfolio monitoring process: this involves, in
addition to the monthly monitoring of bespoke financial and
operational KPIs and in-depth semi-annual portfolio company
reviews, a detailed annual sustainability assessment, which covers
a number of climate factors. This annual sustainability assessment
was also enhanced with the benefit of the outputs of our climate
change scenario analysis;
• Investment Committee oversight: the Investment Committee
manages portfolio risks, including climate-related risks;
• our influence on portfolio companies: we make majority or
significant minority investments in our core portfolio companies
and exercise influence through membership of their boards;
• GHG emissions measurement: the measurement of portfolio
company GHG emissions (see “Metrics and targets” on the next
page) and engagement with portfolio companies on abatement,
mitigation and adaptation strategies; and
• climate change scenario analysis: described under “Strategy”
on pages 61 to 63.
Our investment processes are described on page 43 of this Annual
report. We further mitigate climate-related risks by improving our
understanding of climate change and refining our processes over
time. These processes involve an increasing number of employees.
We have been encouraged by the level of staff engagement on this
topic and intend to continue to provide forums for employees to
provide their input and views on how to improve our performance.
Portfolio data collection and management
To support the assessment and management of portfolio
sustainability risks, including climate-related risks, in FY2025
we continued to work on improving the quality of the annual
sustainability data (including GHG emissions) we collect from
portfolio companies by refining our sustainability assessment
questionnaires to ensure that they reflect our improved
understanding of climate drivers across the portfolio, as well as
evolving disclosure requirements, market practice and other
stakeholder needs. We continue to work on the consistency and
comparability of portfolio GHG emissions data, as this will underpin
the quality of our portfolio emissions disclosures. See “Metrics and
targets” on the next page for more information on portfolio
emissions data.
Page 43
Assessment and management of sustainability factors in our
investment and portfolio management processes
Sustainability
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Metrics and targets
TCFD recommendations
Disclose the metrics and targets used to assess and manage
relevant climate-related risks and opportunities where such
information is material:
• Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its strategy
and risk management process
• Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas emissions, and the related risks
• Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets
3i Group’s portfolio climate metrics
The metrics below provide information on the GHG emissions from
our portfolio companies. These metrics cover 99.6% of the portfolio
value1 of 3i Group plc as at 31 March 2025 and are calculated in line
with the TCFD recommendations implementation guidance.
Definitions of climate metrics
FY2025
FY2024
Portfolio emissions (tCO2e)
Total portfolio emissions is the absolute Scope 1
and 2 GHG emissions associated with a portfolio.
We are allocating GHG emissions for each portfolio
company using 3i Group’s fully diluted equity
ownership2.
228,936 323,539
Carbon footprint
(tCO2e/£m invested)
Carbon footprint is total portfolio emissions (Scope 1
and 2) normalised by the value of the portfolio2,
expressed in tonnes of CO2e/£m invested.
9.0
15.0
WACI
(tCO2e/£m revenue3)
Weighted Average Carbon Intensity (“WACI”) is a
portfolio’s exposure to carbon-intensive companies,
expressed in tonnes CO2e/£m revenue. It is
calculated using the carbon intensity for each
portfolio company (Scope 1and 2 emissions/revenue)
apportioned based on the relative weight of each
portfolio company in the reporting boundary.
24.4
42.5
1
Note that 3i Investments plc manages a number of co-investment vehicles whose investors are employees
or former employees of 3i. For the purpose of this calculation, we have included these co-investment
vehicles within the 3i Group scope.
2
Sourced from 3i’s finance systems.
3
Sourced from portfolio companies.
The significant reduction in portfolio emissions was driven by: (i)
refinements in the methodologies used by certain portfolio
companies to calculate their emissions; (ii) changes in portfolio
composition; and (iii) reductions in the portfolio emissions of some
portfolio companies. We continue to work with our portfolio
companies to improve the quality of the GHG emissions data they
report to us. At times, this may mean that GHG emissions data for
an individual portfolio company is not comparable year on year.
We do not ask portfolio companies to restate prior-year data
as they improve the quality of the data they report to us.
Methodology and GHG emissions data source
The reporting boundary includes all companies in the portfolio
at the balance sheet date. As a private equity and infrastructure asset
manager and owner, 3i is able to collect data from its portfolio
companies. 3i requests Scope 1 and Scope 2 (location and market-
based) GHG emissions data from all portfolio companies, excluding
a small number of legacy minority investments, on an annual basis.
This data is provided directly to 3i from portfolio companies through
a sustainability data collection tool, or via emails in rare cases, and
typically covers the year to 31 December. If a company provides
Scope 2 market-based data, this is used for the climate metrics
calculation. If Scope 2 market-based data is unavailable, location-
based data is used. Portfolio companies provide their Scope 3 GHG
emissions data to us where available and we are working with the
portfolio to improve this data further before we are able to disclose it.
Estimations and data gaps
Where current year data is not available, but previous year data
is available, we estimate the current year data using data from the
previous year, adjusted based on year-on-year changes in revenue.
Where the data is not available, it is noted as a data gap. The
significance of the data gap is disclosed through the data coverage
indicator (99.6% of the portfolio value for FY2025).
Data quality
As we invest in private companies that are at different levels of
climate maturity, we have decided to add a quality score to the data
that we are disclosing to ensure that readers understand the
reliability and quality of the data provided. Some of our portfolio
companies have only just started to estimate their GHG emissions,
while others have robust processes in place to calculate and assure
the data. We have used a custom scale to reflect the overall data
quality using the Partnership for Carbon Accounting Financials
(“PCAF”) methodology as a guide and adjusting it to reflect the
specificities of our business model:
Characteristics of the data
Data
quality
Certain
Emissions of the company are available and reported by
the portfolio company as being verified by a third party
and calculated using activity-based data or through direct
monitoring
1
Emissions of the company are available and reported by
the portfolio company as being verified internally and
calculated using activity-based data or through direct
monitoring
2
Unverified emissions of the company are available and
calculated using activity-based data or through direct
monitoring; or emissions of the company are available and
reported by the portfolio company as being verified by
a third party and calculated using spend-based data
3
Emissions of the company are available and reported by
the portfolio company as being verified internally and
calculated using spend-based data
4
Unverified emissions of the company are available,
including those calculated using our sustainability data
collection tool
5
Uncertain
The data quality score for 3i Group plc is 1.85. It is derived by
assigning to each portfolio company a data quality score, weighted
by that company’s emissions as a percentage of total portfolio
emissions.
Sustainability
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Portfolio net zero alignment scale
iCI and the Sustainable Markets Initiative’s Private Equity Task Force have developed the Private Markets Decarbonisation Roadmap to enable
private markets firms to drive their transition to a low-carbon economy. The metric used within this roadmap is based on the climate maturity
of each portfolio company rather than on an implied temperature rise metric which is the methodology suggested by the FCA for climate
disclosures. We are using the Private Markets Decarbonisation Roadmap metric because it aligns best with our science-based targets.
The Alignment Scale of the Roadmap (as published by the leaders of the initiative) is summarised in the table below:
Not started
Capturing data
Preparing to
decarbonise
Aligning
Aligned to net zero
Definition
Not started to measure
emissions or plan how
to reduce them
Reporting emissions
data but currently no
plan in place to reduce
emissions
Planning to reduce
emissions in line with an
approach agreed with
the GP
Committed to a
decarbonisation plan
aligned to a transition
pathway
Delivering against
a net zero plan and
operations aligned to
science-based target
Criteria
• Minimal or no emissions
data
• No decarbonisation plan
in place
• Measuring Scope 1 and
2 emissions from
operations, alongside
material Scope 3
emissions, and making
data available to fund
• Decarbonisation plan
in place but level of
ambition not aligned
to net zero pathway
• Committed to near-term
science-based target
aligned to a long-term
net zero pathway
• Demonstrated YoY
emissions profile in line
with pathway
3i Group plc categorised portfolio companies covering 99.6% of its investment portfolio value as at 31 March 2025 in line with the roadmap’s
Alignment Scale. The current alignment of the portfolio based on total portfolio emissions is set out in the chart below.
The PMDR alignment scale requires companies to capture and report all material Scope 3 data in order to be included in the “capturing data”
category. While all of our portfolio companies measure and report their Scope 1 and 2 emissions to us, many are not yet in a position
to measure and report to us all their material Scope 3 emissions categories and, as a result, we have had to include them in the
“not started” category.
We have categorised companies that have set science-based targets using the SBTi’s SME target setting process as “aligning” or “aligned to
net zero”, even though some of them have not yet reported all material Scope 3 categories to us. The year-on-year changes in the portfolio
alignment scale are due in large part to Action having set SBTi-validated near-term science-based targets in February 2025.
Sustainability
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3i Group plc | Annual report and accounts 2025
66
14%
12%
7%
8%
78%
8%
1%
71%
1%
2%
FY2024
FY2025
ò
Not started
ò
Capturing data
ò
Preparing to decarbonise
ò
Aligning
ò
Aligned to net zero
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3i Group’s emissions from its own operations
This section has been prepared in accordance with our regulatory
obligation to report GHG emissions pursuant to the Companies
(Directors’ Report) and Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2019 which implement the government’s
policy on Streamlined Energy and Carbon Reporting. During the year
to 31 March 2025, our measured Scope 1 and 2 emissions (market-
based) totalled 187.5 tCO2e. This comprised:
FY2025 (tCO2e)
FY2024 (tCO2e)
GHG emissions
(Scope)
UK
Rest of
the
world
Total
UK
Rest of
the
world
Total
1
63.9 26.7
90.6 Δ 101.0 34.7 135.7
2 – location-based
112.0 94.5 206.5 Δ 92.2 118.7 210.9
2 – market-based
– 96.9
96.9 Δ
– 97.1
97.1
Total 1 and 2
(location-based)
175.9 121.2 297.1
193.2 153.4 346.6
Total 1 and 2
(market-based)
63.9 123.6 187.5
101.0 131.8 232.8
3
n/a
n/a 3,800.3 Δ
n/a
n/a 4,211.9 1
Δ FY2025 Total data above marked with the Δ symbol has been subject to independent limited assurance
by KPMG LLP in accordance with ISAE (UK) 3000 and ISAE 3410. Please refer to www.3i.com/sustainability/
sustainability-reports-and-data-library/ for the Reporting Criteria and KPMG's limited assurance report.
1
FY2024 Scope 3 data has been restated. Please refer to the explanation below.
This is equivalent to 0.8 tCO2e per full-time equivalent employee,
based on an average of 237 employees (2024: 1.0 tCO2e; 244
employees). Overall, our Scope 1 and 2 (market-based) emissions
decreased by 20% year-on-year. Most of the decrease can be
attributed to the move of our Amsterdam office to a renewable
electricity contract and the resolution of an air conditioning cooling
liquid leak at the London premises we occupied for the entire
financial year while preparing our new office for a move in
February 2025.
Our measured Scope 3 emissions totalled 3,800.3 tCO2e.
We restated our FY2024 Scope 3 emissions from 9,612.8 tCO2e
to 4,211.9 tCO2e in accordance with this year’s methodology that
uses more widely available emissions factors. Please see our
reporting criteria, available on our website, for more information.
Our total energy consumption was 1,404.1 MWh (1,404,100 kWh)
in FY2025, 63% of which was consumed in the UK. The split of
energy consumption is shown in the table below.
FY2025
FY2024
Energy
consumption
(kWh in 000s )
UK
Rest of
the world
Total
UK
Rest of
the world
Total
Electricity
540.8 239.5 780.3 445.5
297.2
742.7
Fuels1
349.2
99.8 449.0 378.1
155.1
533.2
District heating,
cooling, steam
– 174.8 174.8
–
175.5
175.5
1
Natural gas and transportation fuels (petrol and diesel).
Methodology
We quantify and report our organisational GHG emissions in
alignment with the World Resources Institute’s Greenhouse Gas
Protocol Corporate Accounting and Reporting Standard and in
alignment with the Scope 2 Guidance. Scope 3 emissions are
calculated in line with the World Resources Institute’s Greenhouse
Gas Protocol: Corporate Value Chain (Scope 3) Accounting and
Reporting Standard as well as the World Resources Institute’s GHG
Protocol Technical Guidance for Calculating Scope 3 emissions.
We consolidate our organisational boundary according to the
operational control approach, which includes all our offices. The GHG
sources that constituted our operational boundary for the year to
31 March 2025 are:
• Scope 1: natural gas combustion within boilers, fuel combustion
within leased vehicles and use of refrigeration and air-conditioning
equipment;
• Scope 2: purchased electricity and heat, cooling and steam
consumption for our own use, including leased vehicles;
• Scope 3: purchased goods and services, capital goods, fuel- and
energy-related activities, waste generated in operations, business
travel and employee commuting and emissions associated with
working from home.
In some cases, where data is missing, for example, due to the timing
of invoices from our utilities providers, values have been estimated
either by using data from the previous year as a proxy in the first
instance, or extrapolation of available data.
The Scope 2 Guidance requires that we quantify and report Scope 2
emissions according to two different methodologies (“dual
reporting”): (i) the location-based method, using the average
emissions intensity of grids for the country in which the reported
operations take place; and (ii) the market-based method, which
reflects the emissions from purposefully chosen energy (eg bundled
electricity, supplier-specific rates, direct electricity contracts).
Although we have a relatively low environmental footprint, we are
committed to reducing it further in line with the science-based
targets described on the next page. We purchased our electricity
from 100% renewable sources during FY2025 for our London, Paris
and Frankfurt offices, as well as for the premises we previously
occupied in New York, which we leased until the end of March 2025.
Together, these offices accounted for over 80% of our overall
electricity consumption. We switched to renewable electricity in our
Amsterdam office in January 2025, bringing the total renewable
electricity consumption to approximately 85%. The landlord of our
new office in New York is working on delivering green energy, but
it relies on initiatives to be implemented by the New York state
government to achieve that objective. In February 2025, our London
office moved to new premises that use only renewable electricity and
are not connected to the gas supply. As a result, we expect a further
reduction in GHG emissions in FY2026.
A more detailed description of our methodology can be found in the
reporting criteria published on our website.
Third-party assurance
GHG emissions figures marked with a "Δ" symbol on this page have
been subject to independent limited assurance by KPMG LLP in
accordance with ISAE (UK) 3000 and ISAE 3410.
Reporting criteria and KPMG limited assurance opinion
www.3i.com/sustainability/library
Sustainability
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Science-based targets
During FY2024, we set SBTi-validated near-term science-based
targets that cover our direct Scope 1 and 2 emissions, as well as
the Scope 3 emissions associated with our portfolio. These were
formulated in line with the guidance published by SBTi for financial
institutions and the private equity sector.
Operational emissions target
3i has committed to reducing its absolute Scope 1 and 2 (market-
based) GHG emissions by 42% by FY2030 from a FY2023 base year.
While our emissions slightly increased by 3.2% from FY2023 (our base
year), we have done the work that will allow us to reduce operational
emissions in the future, involving mainly the reduction in gas
consumption and the number of leased vehicles provided as
a benefit to employees.
Our strategy to meet this target involves engaging with our landlords
on the energy efficiency of our premises and on using less carbon-
intensive energy sources. We are also engaging with energy suppliers
directly or through our landlords on the procurement of renewable
electricity.
Financed emissions targets
3i's portfolio engagement target commits us to ensuring that 31%
of our listed and eligible portfolio by invested capital sets SBTi-
validated targets by FY2028 and 100% by FY2040. We have made
significant progress against this target this year, with 23.3% of our
portfolio by invested capital setting SBTi-validated targets. The
companies with validated targets include Action, BoConcept, ten23,
Ionisos, Joulz and BCA. WaterWipes, a portfolio company which we
acquired in January 2025, already has validated targets, but we have
excluded it from our progress chart, as we apply a two-year grace
period for all new investments.
3i also committed to reducing GHG emissions from the electricity
generation sector within its eligible portfolio by 68% per MWh by
FY2030 from a FY2023 base year. 3i achieved a 51% per MWh
reduction towards that target, mainly due to the sale of Attero,
a waste treatment company which was held in one of the
Infrastructure portfolios.
Our strategy to meet the portfolio targets remains consistent with
last year’s and includes the following actions:
1 As a majority or significant minority investor in our core portfolio
companies, we will continue to use our influence and engage with
portfolio companies to support them to:
(i)
measure and report on Scope 1 and 2 GHG emissions at least
annually;
(ii) measure and report on material Scope 3 GHG emissions at
least annually when appropriate; and
(iii) develop decarbonisation plans and set science-based targets.
2 We will manage our electricity generation portfolio to reduce its
GHG emissions intensity as a whole.
3 We will facilitate knowledge sharing between portfolio companies
in relation to formulating decarbonisation plans and setting
science-based targets.
Sustainability
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GHG Operational emissions
Scope 1 and 2 (market-based) – tCO2e
1.5%
6.2%
23.3%
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
Portfolio engagement target
% of invested capital
181.6
232.8
187.5
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
l 3i’s GHG emissions – Scope 1 and 2 (market-based)
–
SBTi’s linear reduction assumption
l Percentage of 3i plus funds invested capital with SBTi-validated targets
–
SBTi’s linear progression assumption
Contents
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What’s in this section
Financial review
70
Reconciliation of Investment basis and IFRS
75
Alternative Performance Measures
79
Risk management
80
Principal risks and mitigations
85
Directors’ duties under Section 172
94
3i Group plc | Annual report and accounts 2025
69
Performance
and risk
Contents
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Highlights – Investment basis
Gross investment return
Operating profit before
carried interest
Total return
£5,211m
(2024: £4,168m)
£5,098m
(2024: £4,077m)
£5,049m
(2024: £3,839m)
Total return on opening
shareholders’ funds
Diluted NAV per share
at 31 March 2025
Total dividend
25%
(2024: 23%)
2,542p
(31 March 2024: 2,085p)
73.0p
(31 March 2024: 61.0p)
Table 9: Total return for the year to 31 March
Investment basis
2025
£m
2024
£m
Realised profits/(losses) over value on the disposal of investments
51
(4)
Unrealised profits on the revaluation of investments
4,839
3,926
Portfolio income
Dividends
509
499
Interest income from investment portfolio
81
91
Fees receivable
10
1
Foreign exchange on investments
(361)
(461)
Movement in the fair value of derivatives
82
116
Gross investment return
5,211
4,168
Fees receivable from external funds
64
72
Operating expenses
(150)
(147)
Interest receivable
18
13
Interest payable
(65)
(61)
Exchange movements
20
29
Other income
–
3
Operating profit before carried interest
5,098
4,077
Carried interest
Carried interest and performance fees receivable
29
62
Carried interest and performance fees payable
(81)
(305)
Operating profit before tax
5,046
3,834
Tax charge
(1)
(2)
Profit for the year
5,045
3,832
Re-measurements of defined benefit plans
4
7
Total comprehensive income for the year (“Total return”)
5,049
3,839
Total return on opening shareholders’ funds
25%
23%
Investment basis and Alternative Performance Measures (“APMs”)
In our Strategic report, we report our financial performance using our Investment basis. We do not consolidate our portfolio companies
as private equity and infrastructure investments are not operating subsidiaries. IFRS 10 sets out an exception to consolidation and requires
us to fair value other companies in the Group (primarily intermediate holding companies and partnerships). As explained in the Investment
basis, Reconciliation of Investment basis and IFRS sections below, the total comprehensive income and net assets are the same under our
audited IFRS financial statements and our Investment basis. The Investment basis is simply a “look through” of IFRS 10 to present the
underlying performance and we believe it is more transparent to readers of our Annual report and accounts.
In October 2015, the European Securities and Markets Authority (“ESMA”) published guidelines about the use of APMs. These
are financial measures such as KPIs that are not defined under IFRS. Our Investment basis is itself an APM, and we use a number of other
measures which, on account of being derived from the Investment basis, are also APMs.
Further information about our use of APMs, including the applicable reconciliations to the IFRS equivalent where appropriate, is provided at the
end of the Financial review and should be read alongside the Investment basis to IFRS reconciliation. Our APMs are gross investment return as
a percentage of the opening investment portfolio value, cash realisations, cash investment, operating cash profit, net cash/(debt) and gearing.
Performance and risk
Financial review
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Realised profits/losses
We generated total realised proceeds of £1,837 million (2024:
£888 million) primarily from Action’s capital restructuring and the
sales of nexeye and WP. The latter sales were the driver of the
£50 million realised profits generated in Private Equity (2024: loss
of £4 million from Infrastructure).
Unrealised value movements
We recognised an unrealised profit of £4,839 million (2024:
£3,926 million). Action’s continued strong performance contributed
£4,324 million (2024: £3,609 million). We also saw good contributions
from Royal Sanders and a number of our other Private Equity
investments including Audley Travel, MPM, Tato, Cirtec Medical
and EBG offsetting a negative contribution principally from Wilson.
Our infrastructure portfolio saw positive contributions from our
infrastructure funds, offset by the decrease in the share price
of our quoted investment in 3iN.
Further information on the Private Equity, Infrastructure and
Scandlines valuations is included in the business reviews.
Portfolio income
Portfolio income increased to £600 million for the year (2024:
£591 million), primarily due to dividend income of £509 million (2024:
£499 million), predominantly from Action. Other notable
contributions include interest income from our portfolio companies,
the majority of which is non-cash and a good level of portfolio fees
from Private Equity which reflected a number of new investments
in FY2025.
Fees receivable from external funds
Fees receivable from external funds were £64 million in FY2025
(2024: £72 million). 3i receives a fund management fee from 3iN,
which amounted to £51 million in FY2025 (2024: £51 million).
The remaining fee income received in the year of £13 million
(2024: £21 million) includes fees from 3i MIA, our North American
Infrastructure Fund and our management of the 3i 2020 Co-
investment Programme related to Action.
Operating expenses
Operating expenses increased in the year to £150 million (2024: £147
million) driven by a higher share-based payment charge reflecting
the strong performance of 3i’s share price during the year, which
was offset by lower administration expenses and delayed staff
recruitment.
Interest payable
The Group recognised interest payable of £65 million (2024:
£61 million). Interest payable includes interest on the Group’s loans
and borrowings and amortisation of capitalised fees.
Operating cash profit
We generated an operating cash profit of £469 million in the year
(2024: £467 million). Cash income increased to £598 million (2024:
£594 million), principally due to an increase in dividend income,
which included £433 million of cash dividends from Action (2024:
£375 million). We also received cash dividends from 3iN, Scandlines
and Tato, as well as cash fees from our external funds. Excluding the
dividends received from Action, the operating cash profit was £36
million (2024: £92 million).
We paid cash operating expenses of £129 million (2024: £127 million)
in the year. Cash operating expenses were lower than the £150
million (2024: £147 million) of operating expenses recognised in
the Consolidated statement of comprehensive income as a result
of share-based payments and other non-cash expenses.
Table 10: Unrealised value movements on the revaluation of investments for the year to 31 March
Investment basis
2025
£m
2024
£m
Private Equity
4,803
3,874
Infrastructure
17
72
Scandlines
19
(20)
Total
4,839
3,926
Table 11: Operating cash profit for the year to 31 March
Investment basis
2025
£m
2024
£m
Cash fees from external funds
65
74
Cash portfolio fees
7
12
Cash portfolio dividends and interest
526
508
Cash income
598
594
Cash operating expenses1
(129)
(127)
Operating cash profit
469
467
1
Cash operating expenses include operating expenses paid and lease payments.
Performance and risk
Financial review continued
3i Group plc | Annual report and accounts 2025
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Carried interest and performance fees
We receive carried interest and performance fees from third-party
funds and 3iN. We also pay carried interest and performance fees
to participants in plans relating to returns from investments. These
are received and/or paid subject to meeting certain performance
conditions and when cash proceeds have been received following
a realisation, refinancing event or other cash distribution and
performance hurdles are passed in cash terms. Due to the passage
of time between investment and realisation, the schemes are usually
active for a number of years and their participants include both
current and previous employees of 3i. In Private Equity (excluding
Action), we typically accrue net carried interest payable of c.12%
of GIR, once the performance hurdle is achieved, based on the
assumption that all investments are realised at their balance
sheet value.
The overall strong performance of the Private Equity portfolio
resulted in a £70 million increase in the carried interest payable
expense. During the year, we reduced our carried interest and
performance fees payable liability following the full crystallisation
of the remaining carried interest liability of £428 million relating
to Action. Going forward, we have no carried interest dilution
to our 57.9% gross stake in Action.
In Infrastructure, 3iN pays a performance fee based on its NAV on an
annual basis, subject to a hurdle rate of return. The continued strong
performance of the assets held by 3iN resulted in the recognition of
£29 million (2024: £62 million) of performance fees receivable, with
£42 million received during the year.
Overall, the effect of the income statement charge of £81 million
(2024: £305 million), cash payments of £521 million (2024: £778
million), as well as currency translation meant that the balance sheet
carried interest and performance fees payable was £360 million
(31 March 2024: £818 million).
Table 12: Carried interest and performance fees for the year to 31 March
Investment basis Statement of
comprehensive income
Investment basis Statement of
financial position
2025
£m
2024
£m
2025
£m
2024
£m
Carried interest and performance fees receivable
Private Equity
–
–
4
5
Infrastructure
29
62
29
42
Total
29
62
33
47
Carried interest and performance fees payable
Private Equity
(70)
(262)
(348)
(803)
Infrastructure
(11)
(43)
(12)
(15)
Total
(81)
(305)
(360)
(818)
Table 13: Carried interest and performance fees paid in the year to 31 March
Investment basis cash flow statement
2025
£m
2024
£m
Carried interest and performance fees cash paid
Private Equity
510
745
Infrastructure
11
33
Total
521
778
Performance and risk
Financial review continued
3i Group plc | Annual report and accounts 2025
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Net foreign exchange movements
The Group recorded a total foreign exchange translation loss
of £259 million including the impact of foreign exchange hedging
in the year (March 2024: £316 million loss), as a result of sterling
strengthening by 2% against the euro and US dollar.
At 31 March 2025, the notional value of the Group’s forward foreign
exchange contracts was €2.6 billion and $1.2 billion. The €2.6 billion
includes the €600 million notional value of the forward foreign
exchange contracts related to the Scandlines hedging programme.
In April 2025, we completed a further €400 million of forward foreign
exchange contracts to increase the notional value of the Group’s
euro foreign exchange hedging programme to €3.0 billion, reflecting
increases in euro cash flows and capitalising on attractive hedge rates.
Including the impact from foreign exchange hedging, 79% of the
Group’s net assets are denominated in euros or US dollars. Based on
the Group’s net assets at 31 March 2025, including the impact from
foreign exchange hedging, a 1% movement in euro and US dollar
foreign exchange rates would impact the total return by £182 million
and £12 million, as shown in Table 14 below.
Pension
The Group completed the buy-out of its UK defined benefit plan
(“the Plan”) during the year, meaning that the buy-in policies were
converted into individual annuity policies held in each Plan member’s
name, thereby fully removing the defined benefit obligation. The
remaining assets held by the Plan are those surplus assets that were
not needed to complete the buy-out, less expected wind-up costs.
Tax
The Group’s parent company continues to operate in the UK as
an approved investment trust company. An approved investment
trust is a UK investment company which is required to meet certain
conditions set out in the UK tax rules to obtain and maintain its tax
status. This approval allows certain investment profits of the
Company, broadly its capital profits, to be exempt from tax in the UK.
Income and expenditure, excepting those exempt returns in the
Company, are both subject to taxation. The Group’s tax charge for
the year was £1 million (2024: £2 million) with no top-up tax payable
under Pillar 2.
The Group’s overall UK tax position for the financial year is
dependent on the finalisation of the tax returns of the various
corporate and partnership entities in the UK group.
Table 14: Net assets1 and sensitivity by currency at 31 March
Pre-hedging update
Post-hedging update3
FX rate
£m
%
1%
sensitivity
£m
1%
sensitivity
£m
Sterling
n/a
4,942
20
n/a
Euro2
1.1935
18,257
74
182
179
US dollar2
1.2908
1,211
5
12
Danish krone
8.9040
177
1
2
Other
n/a
24
–
n/a
1 The Group’s foreign exchange hedging is treated as a sterling asset within the above table.
2 The sensitivity impact calculated on the net assets position includes the impact of foreign exchange hedging.
3. Sensitivity based on net assets at 31 March 2025 including the impact of the additional €400 million in the hedging programme.
Performance and risk
Financial review continued
3i Group plc | Annual report and accounts 2025
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Balance sheet and liquidity
At 31 March 2025, the Group had net debt of £771 million
(31 March 2024: £806 million) and gearing of 3% after the receipt
of cash income of £598 million and net cash proceeds of £659 million
offsetting the payment of carried interest and performance fees
of £521 million and Group dividend payments of £625 million.
The Group had liquidity of £1,323 million as at 31 March 2025 (31
March 2024: £1,296 million), comprising cash and deposits of £423
million (31 March 2024: £396 million) and an undrawn RCF of
£900 million.
The investment portfolio value increased to £25,579 million
at 31 March 2025 (31 March 2024: £21,636 million), mainly driven
by unrealised profits of £4,839 million in the year.
Further information on investments and realisations is included
in the Private Equity, Infrastructure and Scandlines business reviews.
Going concern
The Annual report and accounts 2025 were prepared on a going
concern basis. The Directors made an assessment of going concern,
taking into account the Group’s current performance and the
outlook, and performed additional analysis to support the going
concern assessment. Further details on going concern can be found
on page 128 in the Resilience statement.
Dividend
The Board has recommended a second FY2025 dividend of 42.5
pence per share (2024: 34.5 pence), taking the total dividend for
the year to 73.0 pence per share (2024: 61.0 pence). Subject
to shareholder approval, the dividend will be paid to shareholders
in July 2025.
Table 15: Simplified consolidated balance sheet at 31 March
Investment basis Statement of financial position
2025
£m
2024
£m
Investment portfolio
25,579
21,636
Gross debt
(1,194)
(1,202)
Cash and deposits
423
396
Net debt
(771)
(806)
Carried interest and performance fees receivable
33
47
Carried interest and performance fees payable
(360)
(818)
Other net assets
130
111
Net assets
24,611
20,170
Gearing1
3%
4%
1 Gearing is net debt as a percentage of net assets.
Key accounting judgements and estimates
A key judgement is the assessment required to determine the degree of control or influence the Group exercises and the form of
any control to ensure that the financial treatment of investment entities is accurate. The introduction of IFRS 10 resulted in a number
of intermediate holding companies being presented at fair value, which has led to reduced transparency of the underlying investment
performance. As a result, the Group continues to present a non-GAAP Investment basis set of financial statements to ensure that the
commentary in the Strategic report remains fair, balanced and understandable. The reconciliation of the Investment basis to IFRS
is shown on pages 76 to 78.
In preparing these accounts, the key accounting estimate is the carrying value of our investment assets, which is stated at fair value.
Given the importance of the valuation of investments, the Board has a separate Valuations Committee to review the valuation policy,
process and application to individual investments. However, asset valuations for unquoted investments are inherently subjective, as they
are made on the basis of assumptions which may not prove to be accurate. At 31 March 2025, 96% by value of the investment assets
were unquoted (31 March 2024: 96%).
Performance and risk
Financial review continued
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Background to Investment basis financial statements
The Group makes investments in portfolio companies directly, held
by 3i Group plc, and indirectly, held through intermediate holding
company and partnership structures (“Investment entity
subsidiaries”). It also has other operational subsidiaries which provide
services and other activities such as employment, regulatory activities,
management and advice (“Trading subsidiaries”). The application
of IFRS 10 requires us to fair value a number of intermediate holding
companies that were previously consolidated line by line. This fair
value approach, applied at the intermediate holding company level,
effectively obscures the performance of our proprietary capital
investments and associated transactions occurring in the
intermediate holding companies.
The financial effect of the underlying portfolio companies and
fee income, operating expenses and carried interest transactions
occurring in Investment entity subsidiaries are aggregated into
a single value. Other items which were previously eliminated
on consolidation are now included separately.
To maintain transparency in our report and aid understanding we
introduced separate non-GAAP “Investment basis” Statements of
comprehensive income, financial position and cash flow in our 2014
Annual report and accounts. The Investment basis is an APM and the
Strategic report is prepared using the Investment basis as we believe
it provides a more understandable view of our performance. Total
return and net assets are equal under the Investment basis and IFRS;
the Investment basis is simply a “look through” of IFRS 10 to present
the underlying performance.
Reconciliation of Investment basis and IFRS
A detailed reconciliation from the Investment basis to IFRS basis
of the Consolidated statement of comprehensive income,
Consolidated statement of financial position and Consolidated
cash flow statement is shown on the following pages.
Investment basis of consolidation
l Consolidated
l Fair valued
3i Group plc
The Group
Investment
entity
subsidiaries
Trading
subsidiaries
(regulated
investment
advisers,
employment
entities, etc.)
Inter-company
balance
eliminated on
consolidation
Portfolio
companies
(held directly by
3i Group plc)
Portfolio
companies
IFRS 10 basis of consolidation
l Consolidated
l Fair valued
l Portfolio company included in fair value
of Investment entity subsidiaries
3i Group plc
The Group
Investment
entity
subsidiaries
Trading
subsidiaries
(regulated
investment
advisers,
employment
entities, etc.)
Inter-company
balance
Portfolio
companies
(held directly by
3i Group plc)
Portfolio
companies
Performance and risk
Reconciliation of Investment basis and IFRS
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Reconciliation of consolidated statement of comprehensive income
for the year to 31 March
Footnotes
Investment
basis
2025
£m
IFRS
adjustments
2025
£m
IFRS basis
2025
£m
Investment
basis
2024
£m
IFRS
adjustments
2024
£m
IFRS basis
2024
£m
Realised profits/(losses) over value on the
disposal of investments
1,2
51
(46)
5
(4)
5
1
Unrealised profits on the revaluation of
investments
1,2
4,839
(1,027)
3,812
3,926
(1,184)
2,742
Fair value movements on investment entity
subsidiaries
1
–
953
953
–
861
861
Portfolio income
Dividends
1,2
509
(96)
413
499
(136)
363
Interest income from investment portfolio
1,2
81
(52)
29
91
(62)
29
Fees receivable
1,2
10
3
13
1
2
3
Foreign exchange on investments
1,3
(361)
116
(245)
(461)
223
(238)
Movement in the fair value of derivatives
82
–
82
116
–
116
Gross investment return
5,211
(149)
5,062
4,168
(291)
3,877
Fees receivable from external funds
64
–
64
72
–
72
Operating expenses
1,4
(150)
1
(149)
(147)
1
(146)
Interest receivable
1,4
18
(3)
15
13
(4)
9
Interest payable
(65)
–
(65)
(61)
–
(61)
Exchange movements
1,3
20
57
77
29
23
52
Income from investment entity subsidiaries
1
–
21
21
–
21
21
Other (expense)/income
1,4
–
(1)
(1)
3
–
3
Operating profit before carried interest
5,098
(74)
5,024
4,077
(250)
3,827
Carried interest
Carried interest and performance fees receivable
29
–
29
62
–
62
Carried interest and performance fees payable
1,4
(81)
67
(14)
(305)
254
(51)
Operating profit before tax
5,046
(7)
5,039
3,834
4
3,838
Tax charge
1
(1)
–
(1)
(2)
–
(2)
Profit for the year
5,045
(7)
5,038
3,832
4
3,836
Other comprehensive income
Exchange differences on translation
of foreign operations
1,3
–
7
7
–
(4)
(4)
Re-measurements of defined benefit plans
4
–
4
7
–
7
Other comprehensive income for the year
4
7
11
7
(4)
3
Total comprehensive income
for the year (“Total return”)
5,049
–
5,049
3,839
–
3,839
The IFRS basis is audited and the Investment basis is unaudited.
Footnotes to the Reconciliation of consolidated statement of comprehensive income above:
1 Applying IFRS 10 to the Consolidated statement of comprehensive income consolidates the line items of a number of previously consolidated subsidiaries into a single line item “Fair value movements on investment entity
subsidiaries”. In the “Investment basis” accounts we have disaggregated these line items to analyse our total return as if these Investment entity subsidiaries were fully consolidated, consistent with prior years. The adjustments
simply reclassify the Consolidated statement of comprehensive income of the Group, and the total return is equal under the Investment basis and the IFRS basis.
2 Realised profits, unrealised profits and portfolio income shown in the IFRS accounts only relate to portfolio companies that are held directly by 3i Group plc and not those portfolio companies held through Investment entity
subsidiaries. Realised profits, unrealised profits and portfolio income in relation to portfolio companies held through Investment entity subsidiaries are aggregated into the single “Fair value movement on investment entity
subsidiaries” line. This is the most significant reduction of information in our IFRS accounts.
3 Foreign exchange movements have been reclassified under the Investment basis as foreign currency asset and liability movements. Movements within the Investment entity subsidiaries are included within “Fair value movements
on investment entities”.
4 Other items also aggregated into the “Fair value movements on investment entity subsidiaries” line include operating expenses, interest receivable, other(expense)/income and carried interest and performance fees payable.
Footnotes to the Reconciliation of Consolidated statement of financial position on page 77:
1 Applying IFRS 10 to the Consolidated statement of financial position aggregates the line items into the single line item “Investments in investment entity subsidiaries”. In the Investment basis we have disaggregated these items
to analyse our net assets as if the Investment entity subsidiaries were consolidated. The adjustment reclassifies items in the Consolidated statement of financial position. There is no change to the net assets, although for reasons
explained below, gross assets and gross liabilities are different. The disclosure relating to portfolio companies is significantly reduced by the aggregation, as the fair value of all investments held by Investment entity subsidiaries
is aggregated into the “Investments in investment entity subsidiaries” line. We have disaggregated this fair value and disclosed the underlying portfolio holding in the relevant line item, ie, quoted investments or unquoted
investments. Other items which may be aggregated include carried interest, other assets and other payables, and the Investment basis presentation again disaggregates these items.
2 Intercompany balances between Investment entity subsidiaries and trading subsidiaries also impact the transparency of our results under the IFRS basis. If an Investment entity subsidiary has an intercompany balance with
a consolidated trading subsidiary of the Group, then the asset or liability of the Investment entity subsidiary will be aggregated into its fair value, while the asset or liability of the consolidated trading subsidiary will be disclosed
as an asset or liability in the Consolidated statement of financial position for the Group.
3 Investment basis financial statements are prepared for performance measurement and therefore reserves are not analysed separately under this basis.
Performance and risk
Reconciliation of Investment basis and IFRS continued
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Reconciliation of consolidated statement of financial position
as at 31 March
Footnotes
Investment
basis
2025
£m
IFRS
adjustments
2025
£m
IFRS basis
2025
£m
Investment
basis
2024
£m
IFRS
adjustments
2024
£m
IFRS basis
2024
£m
Assets
Non-current assets
Investments
Quoted investments
1
916
(60)
856
946
(67)
879
Unquoted investments
1
24,663
(7,163)
17,500
20,690
(6,497)
14,193
Investments in investment entity subsidiaries
1,2
–
6,916
6,916
–
5,804
5,804
Investment portfolio
25,579
(307)
25,272
21,636
(760)
20,876
Carried interest and performance fees
receivable
1
–
–
–
2
1
3
Other non-current assets
1
33
(6)
27
36
(8)
28
Intangible assets
2
–
2
4
–
4
Retirement benefit surplus
63
–
63
61
–
61
Property, plant and equipment
18
–
18
4
–
4
Right of use asset
41
–
41
49
–
49
Derivative financial instruments
46
–
46
83
–
83
Total non-current assets
25,782
(313)
25,469
21,875
(767)
21,108
Current assets
Carried interest and performance fees
receivable
33
–
33
45
–
45
Other current assets
1
49
–
49
53
(6)
47
Current income taxes
2
–
2
1
–
1
Derivative financial instruments
91
–
91
82
–
82
Cash and cash equivalents
1
423
(11)
412
396
(38)
358
Total current assets
598
(11)
587
577
(44)
533
Total assets
26,380
(324)
26,056
22,452
(811)
21,641
Liabilities
Non-current liabilities
Trade and other payables
1
(7)
1
(6)
(50)
45
(5)
Carried interest and performance fees payable
1
(333)
304
(29)
(280)
250
(30)
Loans and borrowings
(1,194)
–
(1,194)
(1,202)
–
(1,202)
Derivative financial instruments
(4)
–
(4)
–
–
–
Retirement benefit deficit
(17)
–
(17)
(21)
–
(21)
Lease liability
(42)
–
(42)
(45)
–
(45)
Deferred income taxes
(1)
–
(1)
(1)
–
(1)
Provisions
(2)
–
(2)
(2)
–
(2)
Total non-current liabilities
(1,600)
305
(1,295)
(1,601)
295
(1,306)
Current liabilities
Trade and other payables
1
(137)
4
(133)
(136)
2
(134)
Carried interest and performance fees payable
1
(27)
15
(12)
(538)
514
(24)
Lease liability
(3)
–
(3)
(4)
–
(4)
Current income taxes
(1)
–
(1)
(3)
–
(3)
Provisions
(1)
–
(1)
–
–
–
Total current liabilities
(169)
19
(150)
(681)
516
(165)
Total liabilities
(1,769)
324
(1,445)
(2,282)
811
(1,471)
Net assets
24,611
–
24,611
20,170
–
20,170
Equity
Issued capital
719
–
719
719
–
719
Share premium
792
–
792
791
–
791
Other reserves
3
23,181
–
23,181
18,752
–
18,752
Own shares
(81)
–
(81)
(92)
–
(92)
Total equity
24,611
–
24,611
20,170
–
20,170
The IFRS basis is audited and the Investment basis is unaudited.
Footnotes: see page 76.
Performance and risk
Reconciliation of Investment basis and IFRS continued
3i Group plc | Annual report and accounts 2025
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Reconciliation of consolidated cash flow statement
for the year to 31 March
Footnotes
Investment
basis
2025
£m
IFRS
adjustments
2025
£m
IFRS basis
2025
£m
Investment
basis
2024
£m
IFRS
adjustments
2024
£m
IFRS basis
2024
£m
Cash flow from operating activities
Purchase of investments
1
(1,182)
1,032
(150)
(603)
97
(506)
Proceeds from investments
1
1,841
(734)
1,107
883
(340)
543
Amounts paid to investment entity subsidiaries
1
–
(1,537)
(1,537)
–
(674)
(674)
Amounts received from investment entity
subsidiaries
1
–
865
865
–
580
580
Net cash flow from derivatives
113
–
113
69
–
69
Portfolio interest received
1
11
(5)
6
8
(3)
5
Portfolio dividends received
1
515
(95)
420
500
(134)
366
Portfolio fees received
7
–
7
12
–
12
Fees received from external funds
65
–
65
74
–
74
Carried interest and performance fees received
44
–
44
58
–
58
Carried interest and performance fees paid
1
(521)
498
(23)
(778)
725
(53)
Operating expenses paid
1
(123)
1
(122)
(121)
–
(121)
Co-investment loans (paid)/received
1
(40)
5
(35)
42
(37)
5
Tax paid
(3)
–
(3)
(3)
–
(3)
Other cash income
1
1
–
1
3
(1)
2
Other cash expenses
1
(11)
1
(10)
–
–
–
Interest received
1
18
(3)
15
13
(4)
9
Net cash flow from operating activities
735
28
763
157
209
366
Cash flow from financing activities
Issue of shares
1
–
1
1
–
1
Dividends paid
(625)
–
(625)
(541)
–
(541)
Proceeds from long-term borrowing
–
–
–
422
–
422
Lease payments
(6)
–
(6)
(6)
–
(6)
Interest paid
(60)
–
(60)
(40)
–
(40)
Net cash flow from financing activities
(690)
–
(690)
(164)
–
(164)
Cash flow from investing activities
Purchase of property, plant and equipment
(16)
–
(16)
(3)
–
(3)
Net cash flow from investing activities
(16)
–
(16)
(3)
–
(3)
Change in cash and cash equivalents
2
29
28
57
(10)
209
199
Cash and cash equivalents at the start of year
2
396
(38)
358
412
(250)
162
Effect of exchange rate fluctuations
1
(2)
(1)
(3)
(6)
3
(3)
Cash and cash equivalents at the end of year
2
423
(11)
412
396
(38)
358
The IFRS basis is audited and the Investment basis is unaudited.
Footnotes to the Reconciliation of consolidated cash flow statement above:
1 The Consolidated cash flow statement is impacted by the application of IFRS 10 as cash flows to and from Investment entity subsidiaries are disclosed, rather than the cash flows to and from the underlying portfolio. Therefore
in our Investment basis financial statements, we have disclosed our cash flow statement on a “look through” basis, in order to reflect the underlying sources and uses of cash flows and disclose the underlying investment activity.
2 There is a difference between the change in cash and cash equivalents of the Investment basis financial statements and the IFRS financial statements because there are cash balances held in Investment entity subsidiaries.
Cash held within Investment entity subsidiaries will not be shown in the IFRS statements but will be seen in the Investment basis statements.
Performance and risk
Reconciliation of Investment basis and IFRS continued
3i Group plc | Annual report and accounts 2025
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We assess our performance using a variety of measures that are not specifically defined under IFRS and are therefore termed APMs.
The APMs that we use may not be directly comparable with those used by other companies. Our Investment basis is itself an APM.
The explanation of and rationale for the Investment basis and its reconciliation to IFRS is provided on page 75. The table below defines
our additional APMs.
Purpose
Calculation
Reconciliation to IFRS
Gross investment return as a percentage of opening portfolio value
A measure of the performance of our
proprietary investment portfolio.
It is calculated as the gross investment
return, as shown in the Investment basis
Consolidated statement of comprehensive
income, as a % of the opening portfolio
value.
The equivalent balances under IFRS and the
reconciliation to the Investment basis are shown
in the Reconciliation of the consolidated statement
of comprehensive income and the Reconciliation
of the consolidated statement of financial
position respectively.
Page 16 for KPIs
Cash realisations
Cash proceeds from our investments
support our returns to shareholders,
as well as our ability to invest in new
opportunities.
The cash received from the disposal
of investments in the year as shown
in the Investment basis Consolidated
cash flow statement.
The equivalent balance under IFRS and the
reconciliation to the Investment basis is shown
in the Reconciliation of the consolidated cash
flow statement.
Page 16 for KPIs
Cash investment
Identifying new opportunities in which
to invest proprietary capital is the
primary driver of the Group’s ability
to deliver attractive returns.
The cash paid to acquire investments
in the year as shown on the Investment
basis Consolidated cash flow statement.
The equivalent balance under IFRS and the
reconciliation to the Investment basis is shown
in the Reconciliation of the consolidated cash
flow statement.
Page 17 for KPIs
Operating cash profit
By covering the cash cost of
running the business with cash
income, we reduce the potential
dilution of capital returns.
The cash income from the portfolio
(interest, dividends and fees) together
with fees received from external funds less
cash operating expenses and leases
payments as shown on the Investment
basis Consolidated cash flow statement.
The calculation is shown in Table 11
of the Financial review.
The equivalent balance under IFRS and the
reconciliation to the Investment basis is shown
in the Reconciliation of the consolidated cash flow
statement.
Page 17 for KPIs
Net (debt)/cash
A measure of the available cash
to invest in the business and
an indicator of the financial risk
in the Group’s balance sheet.
Cash and cash equivalents plus deposits
less loans and borrowings as shown
on the Investment basis Consolidated
statement of financial position.
The equivalent balance under IFRS and the
reconciliation to the Investment basis is shown
in the Reconciliation of the consolidated statement
of financial position.
Gearing
A measure of the financial risk
in the Group’s balance sheet.
Net debt (as defined above) as a % of the
Group’s net assets under the Investment
basis. It cannot be less than zero.
The equivalent balance under IFRS and the
reconciliation to the Investment basis is shown
in the Reconciliation of the consolidated statement
of financial position.
Performance and risk
Alternative Performance Measures (“APMs”)
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Effective risk management underpins
the successful delivery of our strategy
and longer-term sustainability of the
business. Our values and culture
are integral to our approach to risk
management.
Understanding our risk appetite
As both an investor and asset manager, 3i is in the business of taking
risks in order to seek to achieve its targeted returns for shareholders
and other investors.
The Board approves the strategic objectives that determine the level
and types of risk that 3i is prepared to accept. The Board reviews 3i’s
strategic objectives and associated risk appetite at least annually.
The Group’s risk management framework is designed to support
the delivery of the Group’s strategic objectives and the longer-term
sustainability of the business and its investment portfolio, within
the agreed risk appetite parameters.
3i’s Risk appetite statement, which is consistent with previous years,
is built on rigorous and comprehensive investment procedures
and conservative capital management. Please refer to page 81
for further details.
Values and culture
Strong values and institutional culture are integral to our approach
to risk management and are embedded in 3i’s approach to risk
governance, described in the next section, led by the Board and the
Chief Executive. To underpin this, 3i has in place a comprehensive
compliance manual, code of conduct and policy framework,
supported by a systematic programme of refresher training and
independent monitoring.
Members of the Executive Committee are responsible for ensuring
individual behaviours meet the Group’s high standards of conduct
across their respective business or functional areas. All employees
share the responsibility for upholding 3i’s strong control culture and
supporting effective risk management. Senior managers, typically
those who report to Executive Committee members, are required
to confirm their individual and business area compliance annually.
In addition, all staff are required to comply with regulatory conduct
rules, complete an annual verification questionnaire, and are
assessed on how they demonstrate 3i’s values as part of their annual
appraisal. 3i’s global policies and procedures are reinforced through
an annual e-learning programme covering topics such as financial
crime, anti-bribery and money laundering, market abuse, preventing
tax evasion, data protection, and regulatory conduct rules.
Finally, the Remuneration Committee is responsible for ensuring the
Group’s remuneration policy is aligned with the Group’s culture and
values, weighted towards variable compensation dependent
on performance, and does not encourage inappropriate or excessive
risk taking. More specifically, our investment teams, which are
responsible for investment origination and asset management, have
reward structures specifically designed to ensure alignment with
the Group’s investment objectives and risk management appetite.
Approach to risk governance
The Board is responsible for risk assessment, the risk management
process and the protection of the Group’s reputation, brand integrity
and longer-term sustainability. It considers the most significant
current and emerging risks facing the Group using a range of
quantitative data and analyses where possible. These include: vintage
controls which consider the portfolio concentration by geography
and sector; periodic reporting of financial and non-financial KPIs from
the portfolio, including leverage levels and sustainability indicators;
and liquidity reporting. Longer-term and new and emerging risks are
evaluated as part of the strategic review process and development
of the Group’s investment strategy.
Board oversight is exercised through the Audit and Compliance
Committee which focuses on: upholding standards of integrity;
financial and non-financial reporting; risk management; going
concern and resilience; and internal control. This includes monitoring
and reviewing the effectiveness of the risk management and internal
control systems. The Audit and Compliance Committee’s activities
are discussed further in its report on pages 121 to 126.
The Investment Committee oversees the investment pipeline
development and approves new investments, significant portfolio
changes and divestments. It is integral to ensuring a consistent
approach to managing the Group’s most material risks. This includes
alignment with 3i’s financial and strategic objectives and risk appetite
and ensuring that the long-term sustainability of portfolio companies
is taken into consideration.
The Board has delegated the responsibility for risk oversight to the
Chief Executive. He is assisted by the Group Risk Committee (“GRC”)
in managing this responsibility and is guided by the Board’s appetite
for risk and any specific limits set. The GRC maintains the Group risk
review, which summarises the Group’s principal risks, associated
mitigating actions and key risk indicators and identifies any changes
to the Group’s risk profile. The review also incorporates a watch list
of new and emerging risks for monitoring and risk mitigation
purposes. The risk review takes place four times a year, with the last
review in May 2025. The Chief Executive provides updates after each
meeting to the Audit and Compliance Committee.
Performance and risk
Risk management
3i Group plc | Annual report and accounts 2025
80
Pages 82-84
Read more about the Group’s risk governance framework
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Risk appetite
Our risk appetite is defined by our
strategic objectives. We invest capital in
businesses to deliver capital returns, and
portfolio and fund management cash
income to cover our costs and increase
returns to our investors. As proprietary
capital investors, we have a long-term,
responsible approach.
Investment risk
The substantial majority of the Group’s capital is invested in our
long-term hold portfolio (Action and Royal Sanders) and in
Private Equity.
Before the Group commits to a Private Equity investment,
we assess the opportunity using the following criteria:
• return objective: individually assessed and subject to a
minimum target of a 2x money multiple over four to six years;
• geographic focus: headquartered in our core markets of
Europe and North America;
• sector expertise: focus on Consumer & Private Label,
Healthcare, Industrial, Services & Software;
• responsible investment: all investments are screened against
the criteria and exclusions set out in our Responsible
Investment policy; and
• vintage: invest up to £750 million per annum in four to seven
new investments in companies with an enterprise value range
of €100 million to €500 million at investment.
If a Private Equity portfolio company exhibits particularly strong
compounding characteristics, is cash generative with an EBITDA
of c.€/$100 million, and can continue to meet a 15% return
hurdle, the Group may conclude that it is in the interest of
shareholders, and consistent with our strategic objectives to hold
an investment for a longer period of time.
Investments made by 3iN need to be consistent with 3iN’s overall
return target of 8% to 10% over the medium term and generate
a mix of capital and income returns. Other Infrastructure
investments made by the Group should be capable of delivering
capital growth and fund management fees which together
generate mid-teen returns. All Infrastructure investments are also
subject to the criteria set out in the Group’s Responsible
Investment policy.
Capital management
3i adopts a conservative approach to managing its capital
resources as follows:
• the Group aims to operate within a range of net cash
equivalent to c.2.5% of NAV and a level of net debt equivalent
to c.5% of NAV, with tolerance to operate outside of this range
on a short-term basis and up to a gearing level of 15%
dependent on investment and realisation flows. The Group
may raise debt, or use other financing from time to time, to
manage investment and realisation flows. The Group has no
appetite for structural gearing; the achievement of its returns
objectives is not reliant on gearing;
• the Group manages liquidity conservatively; maintaining an
RCF to provide additional committed liquidity and financial
flexibility, and monitoring using a framework that assesses
forecast cash flows and a broader range of factors;
• the Group accepts a degree of currency exposure risk with
respect to its investment portfolio, but aims to partially reduce
the impact of currency movements on its net asset value
through a combination of matching currency realisations with
investments and the use of its euro and US dollar foreign
exchange hedging programmes, taking into account the
associated costs and liquidity risks. These portfolio hedging
programmes had a total size of €2.0 billion and $1.2 billion
respectively during FY2025; the euro hedge was increased by
€0.4 billion in April 2025;
• in addition, the Group may hedge specific assets or exposures
where appropriate; for example, in relation to currency
exposures on Scandlines (€600 million hedging programme);
and
• we have limited appetite for the dilution of capital returns
as a result of operating and interest expenses. All our business
lines generate cash income to mitigate this risk.
Performance and risk
Risk management continued
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Role of the Investment Committee
Our Investment Committee is fundamental to the management
of investment risk. It is involved in and approves every material step
of the investment, portfolio management and realisation process.
3i’s approach to portfolio construction is built on originating
opportunities thematically and investing selectively in businesses that
benefit from sustainable long-term structural growth. Integral to this
thematic approach is the identification of new and emerging risks
and opportunities, in areas such as consumer preferences; the
environment and sustainability; technological change; and
demographic and social trends.
New investment opportunities are considered at the outset of the
investment process. Investment proposals cover the expected
benefit of operational improvements, growth initiatives, sustainability
initiatives, and M&A activity, that will be driven by a combination of
our investment professionals and the portfolio company’s
management team. They will also include a view on the likely exit
strategy and timing. All proposed investments are screened against
3i’s Responsible Investment policy.
In evaluating new and existing investments, including those in the
longer-term hold portfolio and re-investment therein, the Investment
Committee considers potential reputational risks and broader
sustainability developments and trends. The latter includes the risks
and opportunities in relation to the environmental and social aspects
of each company’s products and services, the markets in which they
operate, and the supply chain. Investment cases may include
consideration of the feasibility and cost of initiatives to reduce
the company’s environmental footprint, where material.
After investing, 3i works with portfolio companies’ management to
manage risks and invest in initiatives that support sustainable long-
term growth, whilst closely monitoring each investment case:
• our monthly portfolio monitoring reviews assess current
performance against budget, prior year and a set of traffic light
indicators and bespoke, forward-looking financial and non-financial
KPIs;
• we hold semi-annual in-depth reviews of our portfolio companies.
These focus on the longer-term performance and plan for the
investment compared to the original investment case, together
with any strategic developments, an assessment of sustainability
risks and opportunities, and market outlook; and
• where necessary, additional reviews may take place for assets
where there are more significant operational challenges or where
there have been specific external developments that may have an
impact on the portfolio or a specific sector (changing tariff regimes,
supply chain disruptions or adverse market conditions and
restrictions). As part of this process, leverage, banking covenants
and counterparty risks are closely monitored across the portfolio.
Our monitoring processes consider instances where individual
portfolio company underperformance could have adverse
reputational consequences for the Group, even though the value
impact may not be material.
The monthly portfolio monitoring reviews and the semi-annual
reviews are attended by the Investment Committee and the senior
members of the investment teams. Non-executive Directors also
have the opportunity to attend the semi-annual reviews.
Finally, we recognise the need to plan and execute a successful
exit at the optimum time, taking consideration of market conditions.
This exit risk is closely linked to the external economic environment.
Exit plans are refreshed where appropriate in the semi-annual
portfolio reviews and the divestment process is clearly defined
and overseen by the Investment Committee.
We regularly review our internal processes and investment decisions
in light of actual outcomes. This includes periodic back-testing of the
more recent Private Equity investments by comparing their
performance and forecast returns on exit against the original
investment case presented at the time of the investment.
Role of the Group Risk Committee
The quarterly Group risk review process includes an analysis of key
developments since its last review; new and emerging risks; and the
key strategic and financial metrics (such as KPIs) considered to be
indicators of potential changes in the Group’s risk profile. The GRC
uses this information to determine and review its principal risks and
the implications of any new and emerging risks.
It then evaluates the impact and likelihood of each principal risk in
the context of the Group’s strategic objectives, risk appetite and with
reference to associated measures and KPIs. The adequacy of the
mitigation plans is then assessed and, if necessary, additional actions
are agreed and reviewed at the subsequent meeting. A report
summarising the key conclusions of each GRC meeting together with
a copy of the risk review report is provided to the Audit and
Compliance Committee, which provides independent oversight of
the work of the GRC, as described on pages 121 to 126.
Performance and risk
Risk management continued
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A number of focus topics are also agreed in advance of each
meeting. In FY2025, the GRC covered the following:
• a review of the Group’s IT framework including cyber security,
systems developments, the use of artificial intelligence tools, IT
provider concentration risk, and IT resilience;
• an update on the Group’s business continuity and resilience
planning and testing, including oversight of third-party suppliers;
• a review of the Group’s stress tests to support its Going concern,
Viability and Resilience statements;
• semi-annual updates from the investment business lines on
sustainability issues and themes with respect to the Group’s
portfolio companies, including progress with emissions reporting
and the setting of near-term science-based emission reduction
targets; CSRD readiness; and the development and deployment of
a human rights risk management framework;
• an assessment of the cyber maturity of the portfolio and the actions
taken by the Group’s portfolio companies to manage cyber risk;
• semi-annual updates from 3i’s Sustainability Committee, including
TCFD reporting; progress against science-based targets;
monitoring and assessment of climate-related physical and
transition risks, and of nature-related risks in the portfolio;
• ad-hoc updates on specific external and/or portfolio
developments, including the consideration of risks from changes
in US policy, and assessing risks associated with volatility in capital
markets; and
• the proposed risk disclosures in the FY2025 Annual report
and accounts.
There were no significant changes to the GRC’s overall approach
to risk governance or its operation in FY2025. This approach is
benchmarked from time to time against a peer group of private
equity investment trusts, European investment companies, traditional
asset managers and a selection of US alternative asset managers
to ensure it remains fit for purpose.
The GRC also receives an update on the Group’s risk log which is
used to record operational risk incidents and near misses. The Board
and Executive Committee have a very limited tolerance for
operational risk events and errors. Accordingly, a relatively low
reporting threshold is applied. This involves both a qualitative and
quantitative impact assessment; any financial losses or exposures
greater than £20,000 must be reported.
The risk log is also used to record incidents at portfolio companies
which could impact 3i’s reputation as an investor or where 3i may
have regulatory reporting obligations. Examples include fraud, cyber
security, data protection, health and safety, and litigation. The
responsible 3i investment team is required to set out the risk
mitigation steps being undertaken and provide updates on progress.
Role of the Sustainability Committee
The Group’s Sustainability Committee provides input and advice
on developing the Group’s sustainability strategy; the assessment
and management of relevant sustainability risk and opportunities;
regulatory and reporting obligations; and coordination of
sustainability-related activities and initiatives.
The GRC receives semi-annual updates on the work of the
Committee as part of its risk review process. Refer to the
Sustainability section on pages 39 to 68 for further details.
Related risk management activities
3i’s risk management framework is augmented by a separate Risk
Management function (“function”) which has specific responsibilities
under the FCA’s Investment Funds sourcebook and is functionally
and hierarchically separate from the investment teams. It considers
the separate risk reports for each Alternative Investment Fund (“AIF”)
managed by the Group, including areas such as portfolio
composition, portfolio valuation, operational updates and team
changes, which are then considered by the GRC. The function meets
ahead of the GRC meetings to consider the AIF risk reports, and also
to discuss any key developments that might impact the principal risks
affecting the Group.
In practice, the Group operates a “three lines of defence” framework
to support the identification and management of risk. These are:
(1) First line – line management across our business lines and
professional services teams.
(2) Second line – teams with specific oversight and control
responsibilities – for example, Compliance, HR, Finance and IT –
and oversight and challenge by the GRC.
(3) Third line – Internal Audit, which provides independent assurance
over the operation of the Group’s risk management framework
and the internal controls designed to manage and mitigate risk.
Our responsible investment policy
www.3i.com/sustainability/sustainability-policies
Performance and risk
Risk management continued
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3i’s approach to risk management consists of a number of interrelated processes, illustrated
below, the operation of which is overseen by a combination of the Investment Committee,
Executive Committee, Group Risk Committee and Sustainability Committee.
l Responsibility of Investment Committee
l Responsibility of Group Risk Committee
l Responsibility of Sustainability Committee
Six-monthly portfolio company
reviews and monthly updates
Valuation process
and monitoring
Oversight by Group
Risk Committee
Regular Board and Audit
and Compliance
Committee updates
Board review of business
line plans and Group
strategic model
Approval of strategic
objectives
Review of organisational
capability, diversity and
succession plans
Regular monitoring
of market, economic and
geopolitical developments
Analysis of technological,
societal and demographic
changes and trends
Setting of sustainability strategy
covering responsible investment,
people and corporate citizenship
Assessment of long-term sustainability
and reputational risk profile of portfolio
companies
Oversight of sustainability regulatory
reporting requirements and
associated processes, eg TCFD
Our purpose
Attractive returns
Responsible approach
Driving sustainable growth
Investment Committee
operates investment strategy,
vintage control and asset
management
Board review of risk appetite
covering investment risk and
capital management
Setting of an appropriate conduct
and culture framework and policies
Alignment with
remuneration strategy
Treasury policy and control
framework, including oversight
of Treasury Transactions
Committee, as required
Annual Board review of Treasury
policy and strategy
Group Risk Committee
review and monitoring of risk
mitigation plans
Assessment of principal,
new and emerging risks
Development and testing
of viability and going
concern scenarios
Page 80
Further details of the risk governance structure
Performance and risk
Integrated approach to risk management
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Business and risk environment in FY2025
We define our principal risks as those that have the potential
to impact materially the delivery of our strategic objectives. During
the year, the Directors considered a robust assessment of the
principal risks and new and emerging risks facing the Group,
including those that would threaten its business model, future
performance, solvency or liquidity. Further details can be found in
the Audit and Compliance Committee report on pages 121 to 126.
This section provides an overview of the Group’s principal risks,
new and emerging risks, and the key matters considered during
the year as part of the risk assessment process.
The Group’s overall principal risk profile, summarised on pages 88
to 93, has remained relatively stable although the precise nature
of the individual risks may have evolved. The main changes agreed
by the GRC were:
• for the reasons noted below under External, “Global economic
uncertainty” and “Geopolitical and policy risks” are considered
to be higher compared to last year and are expected to remain
elevated in the short term. Geopolitical risk has been broadened
to specifically include changes to government policies, United
States trade policy in particular, given their significance and
potential impact on global markets;
• “Volatility in capital markets, foreign exchange and commodities”
risk increased as markets reacted to slowing growth forecasts, the
fear of potential recession and differentials in interest rates and
inflation between the United States and Europe;
• the “Impact of higher interest rates on debt markets and pricing
of specific asset classes” reduced over the year as interest rates
stabilised/decreased in some geographies and there being an
expectation for further rate cuts albeit at a slower pace than
previously expected;
• the risk of “Lower investment or realisation rates” increased as
despite there being some improvement in private market deal
activity, the factors mentioned above dampened potential buyer/
seller appetite and further compounded by limited liquidity in the
private market; and
• the promotion of “Cyber risks” from our watch list to principal risk,
reflecting greater digital-dependency and use of online platforms
within 3i and certain large portfolio companies, and a heightened
and increasingly artificial intelligence enabled threat landscape.
The Group’s principal risk mitigation plans, which are subject to
regular review by the GRC, have not required any notable changes
during the year.
External
External risks are the risks to our business which are usually outside
of our direct control such as political, economic, environmental,
social, regulatory and competitor risks.
Global economic uncertainty and geopolitical risks were a focal point
of discussion for the GRC over the past year. Of particular concern
were the scope and duration of conflict in Russia/Ukraine and in the
Middle East, and the potential for broader escalation; and the risk
of trade wars through the imposition of tariffs triggering retaliatory
tariffs and trade restrictions. While the impact of these on the
portfolio has been limited to date, these have the potential, inter alia,
to increase market volatility and disrupt supply chains, which could
affect the operations of some of 3i’s portfolio companies and impact
3i’s investment and realisation plans.
The main focus of the GRC has been on understanding how these
changes potentially play out across the different geographies and
sectors in which 3i’s portfolio companies operate, supply chain risks,
and the impact on deal activity. Measures and initiatives put in place
have enabled most portfolio companies to manage their
performance through various economic headwinds. This is reflected
in the continued positive momentum in the overall portfolio
performance across both business lines; in particular, investments in
consumer and private label, healthcare, industrial and infrastructure.
The Group’s resilience assessment and viability testing covers
a range of stress test scenarios including a number of severe
yet plausible external events linked back to the Group’s principal
risks. Further details can be found in the Group’s Resilience
statement on pages 127 to 129. As part of its overall resilience
planning, 3i continues to maintain a conservative approach to
managing its capital resources and costs.
Sustainability considerations are an important component
of our strategic and investment objectives and approach to risk
management. Further information on work done in relation to
Sustainability reporting and compliance obligations, including TCFD-
aligned reporting, and our approach to climate-related risk and
opportunities can be found in the Sustainability section on pages
39 to 68.
Investment
The Investment Committee is responsible for managing the Group’s
investment risks. The focus of the quarterly GRC meetings is on 3i’s
investment outcomes in the context of the Group’s risk appetite,
overall risk profile and potential risks to the achievement of its
strategic objectives.
The core areas of the Group’s investment strategy and focus remain
unchanged, although delivery of these continues to be refined in
terms of approach, resourcing and processes. The underlying views
on key long-term risks and trends remains consistent with last year.
During the year, the GRC discussed the gradual resurgence in deal
activity and, more recently, changes to market sentiment brought
about by increasing geopolitical and macro-economic uncertainty,
which had the potential to delay new investment and planned
realisations in the private capital market in 2025. A very selective and
disciplined approach to investment remains appropriate in the
current market.
The performance of Action and the associated risk of potential
underperformance and impact on the Group was discussed at the
GRC. Action’s strong cash-generative characteristics and sector-
leading growth continues to underpin the resilience of the business,
and the GRC concluded no change was required to the risk
assessment.
The performance risk assessment for the portfolio, excluding Action,
has been stable over the period, reflecting resilient performance by
the majority of the portfolio, partly offset by mixed performance by a
minority of companies in more challenged sectors.
Notwithstanding the challenging external environment described
previously, portfolio performance continues to benefit from:
a combination of the diversity and structure of the portfolio;
a disciplined approach to investment and exit planning; and
mitigating steps taken to address cost pressures and weaker
consumer demand where there is a particular exposure.
Performance and risk
Principal risks and mitigations –
aligning risk to our strategic objectives
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Our investment and portfolio monitoring processes continue
to evolve in response to new and evolving risks. 3i’s Responsible
Investment policy and minimum requirements provide our
expectations for what portfolio companies should be doing or
commit to doing, to manage sustainability risks and explore
sustainability opportunities facing their business. Our sustainability
due diligence on new investments has continued to evolve,
becoming more targeted with an in-depth assessment process,
together with enhanced standards and a clearer sustainability
maturity roadmap to support portfolio companies.
The GRC receives updates on the work of the Sustainability
Committee and progress with sustainability initiatives across
the portfolio. Good progress has been made in advancing
the sustainability maturity of the portfolio and in setting near-term
science-based emissions reduction targets across the portfolio.
Operational
3i’s operational risk profile has remained stable over the year.
Attracting and retaining key people remains a principal risk and
significant operational priority. The market for talented and qualified
candidates remains competitive, and our ability to recruit, develop
and retain key people is crucial to our continued success. Our overall
risk assessment is unchanged.
During the year, the Group experienced modest levels of voluntary
staff turnover; 7.6% in FY2025. This reflects 3i’s strong performance
and helps to underpin the longer-term resilience of the business.
Our Remuneration Committee ensures that our compensation
arrangements are in line with market practice and consistent with
sound risk management. These arrangements include carried interest
schemes for investment executives, an important long-term incentive,
which rewards cash-to-cash returns.
The effective on-boarding and integration of new hires remains
a priority and is an important part of maintaining a cohesive Group
culture and good control mindset.
Detailed succession plans are in place for each business area.
The Board completed its last formal annual review of the Group’s
organisational capability and succession plans in September 2024.
The GRC also receives updates on IT security and operational
resilience. 3i has continued to operate robust and secure IT systems
supported by key third-party service providers. There were no
significant IT performance or security issues in the period. 3i
continues to review and refresh its IT systems, device strategy, and
cyber security framework. 3i engages the services of a leading cyber
security services company, including a part-time Chief Information
Security Officer, which provides ready access to intelligence and
expert advice on new and emerging cyber security threats.
Incident management, business continuity, and disaster recovery
plans are reviewed at least annually. This includes consideration of
a broad range of severe but plausible business disruption scenarios
and incorporates an assessment of third-party supplier risks.
Fraud risk is considered on a regular basis. 3i has a robust fraud risk
assessment and anti-fraud programme in place. The latter includes
fraud prevention work by Internal Audit, awareness training and
provision of an independent reporting service or hotline accessible
by all staff. The Group’s cyber security programme also aims to
identify and mitigate the risks of third-party frauds, for example,
ransomware and phishing attacks, through the use of IT security tools,
internal and external vulnerability testing, and regular staff training.
Capital management
3i continues to maintain a conservative approach to managing its
capital resources and has operated within the limits set out in its Risk
appetite statement on page 81, and in accordance with the Treasury
policy approved by the Board. The latter includes a detailed liquidity
and currency exposure risk monitoring and reporting framework,
incorporating a range of quantitative and qualitative measures and
associated risk tolerance levels.
During the year, S&P and Moody’s upgraded the Group’s long-term
issuer credit ratings. The Group’s S&P credit rating improved from
BBB+ to A-, and the Moodys credit rating improved from Baa1 to A3,
with Stable outlook for both ratings.
Accordingly, there are currently no principal risks in relation to capital
management.
New and emerging risks
The key elements to 3i’s approach to identifying and monitoring new
and emerging risks include the following:
• a thematic approach to investment origination and portfolio
construction, which involves consideration of emerging risks
and trends that can support long-term sustainable growth in the
portfolio;
• the quarterly review by the GRC of significant developments which
could potentially impact the Group’s risk profile and the
achievement of its strategic objectives;
• maintenance of a watch list of risks which are deemed of sufficient
importance to require active monitoring by the GRC, but are not
currently regarded as risks to the achievement of the Group’s
strategic objectives; and
• monitoring of developments by 3i’s professional service teams,
covering their respective specialist areas such as tax, legal and
regulatory compliance, and sustainability.
3i’s thematic approach to investment origination and portfolio
construction is developed based on an analysis of new and emerging
risks and trends over a longer time horizon. The current themes
(pages 12 and 13) include: value-for-money and discount; energy
transition, energy security and resource scarcity; digitalisation, digital
transformation and big data; and demographic and social change.
This approach enables 3i to adapt its investment strategy in a way
which manages longer-term risks whilst taking advantage of the
upside opportunities.
Performance and risk
Principal risks and mitigations – aligning risk to our strategic objectives continued
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The Board carries out an in-depth annual strategic review which
includes an update and discussion on current and emerging risks and
the Group’s risk appetite. The outputs are linked back to the work of
the GRC and the Investment Committee, the latter being responsible
for the execution of the investment strategy, including the
assessment and management of risks over the investment lifecycle.
The outputs also form part of our medium-term viability stress testing
and long-term business resilience assessment (pages 127 to 129).
New and emerging sustainability risks are factored into the
development of 3i’s investment themes. In addition, changes in
legislation and reporting requirements are closely monitored.
Investment opportunities are screened at an early stage against 3i’s
Responsible Investment policy to filter out any which are exposed to
excessive risks. Once invested, we monitor sustainability risks closely
and use our influence to support our portfolio companies across a
range of sustainability-related areas, including improvements in risk
management processes; addressing emerging regulations and
legislation; and encouraging the development of more
environmentally and socially sustainable behaviours. 3i also has the
flexibility to sell investments that become or have the potential to
become overly exposed to sustainability risks. Further information
can be found in the Sustainability section on pages 39 to 68.
The quarterly GRC risk review considers any significant developments
which could impact the Group’s principal risks and the achievement
of its strategic objectives. The areas of risk considered include
external developments, investment outcomes, the Group’s capital
management and operational risks. External developments typically
cover geopolitical developments, the economic outlook and market
performance. The focus is on near to medium-term emerging risks
and trends. Based on this analysis, the GRC reviews the need to
update principal risks and initiate or change the risk mitigation plan.
The Group’s current principal risks and risk mitigation plan are
summarised on pages 88 to 93.
In addition to the review of principal risks, the GRC maintains a watch
list of risks which are deemed of sufficient importance to require
active monitoring by the GRC, but are not currently regarded as risks
to the achievement of the Group’s strategic objectives. This includes
new and emerging risks. The watch list sets out details of how these
risks are being mitigated and any further actions agreed by the GRC.
Risks on the watch list may be reclassified as principal risks and vice
versa based on the GRC’s assessment.
During the year, cyber risks was promoted from the watch list to
a principal risk and broadened to include the impact of artificial
intelligence technology. The other risks on the watch list are
unchanged from last year and have continued to evolve.
These include:
• external environment – UK/EU trading relationships; increased
sustainability reporting and compliance obligations; reputational
risks in relation to the private equity industry; and the potential
re-emergence of a global pandemic;
• investment outcomes – portfolio concentration; and
• operations – third-party supplier resilience.
The risk mitigation plans for risks on the watch list are reviewed
quarterly by the GRC and are broadly unchanged from last year.
Outlook
The longer-term economic outlook continues to be affected by
a number of factors including lower growth forecasts; persistent
inflation; cost-of-living pressures; interest rates being kept higher for
longer; and increasing geopolitical and trade tensions. Whilst there
have been some positive economic indicators, our outlook remains
cautious in view of the number of potential downside factors which
could impact economic growth and market volatility.
3i’s business model, its disciplined approach to investment, active
portfolio management, and diverse investment portfolio have been
resilient to the challenges of the past year. This resilience has also
been confirmed in the results of the latest stress tests carried out as
part of our viability assessment.
Our conservative approach to managing capital resources and our
exposure to Action, private label, infrastructure and healthcare, should
all offer various forms of downside protection.
3i continues to work closely with portfolio management teams to
support their respective business and contingency plans, in response
to challenging economic and market conditions. Where appropriate,
enhanced portfolio monitoring and reporting processes may be put
in place to support portfolio companies through more difficult periods
and to identify possible further actions.
We have a clear and consistent strategy and a disciplined approach
to investment whilst looking to put more capital behind those
portfolio companies we already know well. We expect competition
for the best assets in our sectors to remain intense and prices high.
Accordingly, our focus remains on identifying attractive and sensibly
priced new investments and value-accretive bolt-on acquisitions for
our portfolio companies.
Performance and risk
Principal risks and mitigations – aligning risk to our strategic objectives continued
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The disclosures on the following pages are not an exhaustive list of risks and
uncertainties faced by the Group, but rather a summary of the principal risks which are
regularly reviewed by the GRC and the Board, and have the potential to affect materially
the achievement of the Group’s strategic objectives and impact its financial performance,
reputation and brand integrity.
Movements in risk status and link to strategic objectives
Risk exposure has increased
Grow investment
portfolio earnings
Realise investments with
good cash-to-cash returns
Maintain an
operating cash profit
No significant change in risk exposure
Use our strong
balance sheet
Increase shareholder
distributions
Risk exposure has decreased
External
Principal risk
Global economic uncertainty
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• Impacts general market confidence and
risk appetite
• Higher risk of market volatility, price
shocks or a significant market
correction
• Potential for extended period of higher
inflation and interest rates
• Limits earnings growth or reduces
NAV owing to contraction of earnings
in our investments and/or changes
in multiples and discount rates used
for their valuation
• Increases liquidity or covenant risks
across the portfolio or limits ability
to refinance our investments
• Leads to reduced M&A volumes in
3i’s core markets, economic instability
and lower growth, which impacts
investment portfolio exit plans
and realisation levels
Risk management
and mitigation
• Regular portfolio company reviews
and Investment Committee focus on
investment strategy, exit processes
and refinancing strategies
• Monthly portfolio monitoring
to identify and address portfolio issues
promptly
• Monitoring of valuations and
application of the valuations policy
by the Valuations Committee
• Regular liquidity and currency
monitoring and strategic reviews
of the Group’s balance sheet
• Regular review of resourcing and key
man exposures as part of business line
reviews and the portfolio company
review process
• Overall shape and resilience of the
portfolio
FY2025 outcome
• In the longer-term portfolio, both
Action and Royal Sanders continue
to deliver strong growth
• The rest of the portfolio performed
resiliently; a small number of assets
continue to experience weaker end-
markets
• Overall value growth of £4,839 million
and Group GIR of 24% for the year
• Low Group gearing of 3% and liquidity
of £1,323 million, including our undrawn
RCF of £900 million
Performance and risk
Principal risks and mitigations – aligning risk to our strategic objectives continued
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External continued
Principal risk
Geopolitical and policy risks
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• Indirect operational impact, e.g. third-
party suppliers or supply chain
disruption
• Impact of higher energy and
commodity prices, price shocks
and supply chain issues
• Increased transportation times
and costs
• Increased number and complexity
of sanctions and tariff regimes
• Direct or indirect reputational risks,
e.g. exposures to Russia
• Impact on NAV through contraction
of Private Equity portfolio earnings
or changes in valuation multiples
• Reduced realisation potential,
impacting shareholder returns
• Reduced viability of certain business
models, and the attractiveness of
certain geographies and markets
Risk management
and mitigation
• Detailed scenario and contingency
planning at the portfolio company level
• Steps taken by portfolio companies to
manage through an extended period of
disruption
• Regular assessment of portfolio
company operations and performance
• Sanctions policy and monitoring
• Long-term approach to valuation
multiples
• Strong network of engaged advisers
along with 3i internal team’s awareness
• Monitoring of current global and local
initiatives and potential changes
FY2025 outcome
• Contingency plans in place to address
key risks and subject to review as part of
the portfolio company review process
• Continued monitoring of headwinds
faced from international conflict (and
a broader expansion), and of the
imposition of tariffs and trade
restrictions
• Supply side constraints and price
inflation continue to be closely
managed and monitored across
the portfolio
Principal risk
Volatility in capital markets, foreign exchange and commodities
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• May impact portfolio company
valuations and realisation processes
• Increases risks with exit plans and bank
financing
• Potential for large equity market fall
to impact asset valuations
• Unhedged foreign exchange rate
movements impact total return
and NAV
• Impact of higher energy and
commodity prices, price shocks
and supply chain issues
Risk management
and mitigation
• Portfolio company reviews focus
on investment strategy, exit plans
and refinancing strategies
• Long-term, through-the-cycle
approach to setting valuation multiples
• Active management of exit strategies
by Investment Committee to enable
us to adapt to market conditions
• Regular liquidity and currency
monitoring, and strategic reviews
of the Group’s balance sheet
• Foreign exchange hedging
programmes and management
of investment and realisation
currency flows
FY2025 outcome
• Strong portfolio performance,
demonstrating resilience, leading
to an increase in portfolio value
in the year
• Continuation of euro and US dollar
medium-term foreign exchange
hedging programme. These portfolio
hedging programmes had a total size
of €2.6 billion and $1.2 billion
respectively during FY2025; the euro
hedge was increased by €0.4 billion
in April 2025
• Foreign exchange exposures at the
portfolio company level monitored
and hedged where appropriate
• At 31 March 2025, 79% of net assets
denominated in euros or US dollars.
Sterling strengthened by 2% against
the euro and 2% against the US dollar
and as a result, we generated a total
foreign exchange translation loss
of £259 million (2024: £316 million loss)
net of hedging in the year
Performance and risk
Principal risks and mitigations – aligning risk to our strategic objectives continued
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External continued
Principal risk
Impact of higher interest rates on debt markets and pricing of specific assets
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• Higher risk of market volatility, price
shocks or a significant market
correction
• Limits earnings growth or reduces
NAV owing to contraction of earnings
in our investments and/or changes
in multiples and discount rates used
for their valuation
• Increases liquidity or covenant risks
across the portfolio or limits ability
to refinance our investments
• Impacts market confidence and risk
appetite more generally
Risk management
and mitigation
• Regular portfolio company reviews,
as well as Investment Committee focus
on investment strategy, exit processes
and refinancing strategies
• Monthly portfolio monitoring,
including financing arrangements,
to identify and address issues promptly
• Monitoring of valuations and
application of the valuations policy by
the Valuations Committee
• Regular liquidity, currency
and counterparty risk monitoring
and strategic reviews of the Group’s
balance sheet
FY2025 outcome
• Strong performance of Action
and resilient performance overall from
the remainder of the portfolio led to
an overall increase in portfolio valuation
and Group GIR of 24%
• Action continued to optimise its debt
profile throughout the year and
successfully raised a total of €2.1 billion
in July 2024
• Action also completed two leverage-
neutral amend-and-extend and
repricing transactions saving c€33
million in recurring interest per annum
• Low Group gearing of 3% and liquidity
of £1,323 million, including our undrawn
RCF of £900 million
• Private Equity portfolio is funded with
all-senior debt structures, with long-
dated maturity profiles. As at 31 March
2025, 91% of portfolio company debt
was repayable from 2028 to 2032
• Average leverage across the Private
Equity portfolio was 2.9x (31 March
2024: 2.7x)
Principal risk
Transaction execution challenges in current market
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• Reduced investment rates in
Private Equity and Infrastructure,
as a result of pricing challenges
or market uncertainties
• Risk of wider outcomes on core
investment case assumptions,
impacting returns
• Market uncertainty may result in some
attractive investment opportunities
• Reduced level of realisations and
refinancing
Risk management
and mitigation
• Strong central oversight and disciplined
approach to investment pipeline and
pricing
• Active management of investments
and exit strategies by Investment
Committee
• 3i’s local teams and networks facilitate
the origination of off-market
transactions
FY2025 outcome
• Invested £1,182 million, including the
£768 million reinvestment into Action
and £318 million across three new
investments
• Completed 12 bolt-on acquisitions
for the Private Equity portfolio
• Completed two realisations in the
Private Equity portfolio and realised
proceeds of £1,827 million including
£1,164 million proceeds received from
Action’s capital restructuring
Performance and risk
Principal risks and mitigations – aligning risk to our strategic objectives continued
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Investment
Principal risk
Underperformance of Action
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• Reduction in NAV and realisation
potential impacting shareholder returns
• Impact on 3i’s reputation as an investor
of proprietary capital
• Materiality of the investment increases
the potential impact and profile
of underperformance
• May set back specific strategic
initiatives
Risk management
and mitigation
• Regular monthly monitoring to review
operating performance, identify
weaknesses and opportunities early
and take action as appropriate
• Additional asset monitoring and
reporting, including 3i Chief Executive
in the role of chair and 3i Chief
Operating Officer being on the Action
board
• Sharing of any operational incidents,
such as fraud and cyber breaches, to
ensure appropriate remedial actions
and monitoring
FY2025 outcome
• Close monitoring of Action, including
frequent performance updates to the
3i Board
• Action generated a GIR of £4,551
million, or 32%, on its opening value
• Action added 352 new stores during
2024
• 3i Chief Operating Officer joined the
Action board in March 2025
• Refer to the Action case study on pages
20 to 23 for further details
Principal risk
Underperformance of portfolio companies (ex-Action)
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• Reduction in NAV and realisation
potential impacting shareholder returns
• Impacts reputation as an investor
of proprietary capital and as a manager
of 3iN and other funds
• May set back specific strategic
initiatives
• May impact long-term returns
Risk management
and mitigation
• Rigorous initial assessment of new
investment opportunities to maintain
quality of our investment pipeline
• Monthly portfolio monitoring to review
operating performance, identify
weaknesses and opportunities early
and act as appropriate
• Active management of portfolio
company Chair, CEO and CFO
appointments
• Sharing of any incidents of portfolio
fraud and cyber breaches across
investment teams to ensure
monitoring is up to date
FY2025 outcome
• Royal Sanders delivered very strong
organic and acquisitive growth
• 97% of our portfolio companies
valued on an earnings basis grew
their earnings over the last 12 months
to 31 December 2024
• Close monitoring and adaptation
of portfolio company exit plans
• Liquidity support provided to Wilson
Performance and risk
Principal risks and mitigations – aligning risk to our strategic objectives continued
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Investment continued
Principal risk
Lower investment or realisation rates
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• May impact longer-term returns
and capital management and therefore
ability to deliver strategic plan
• May impact progress with specific
strategic initiatives
• May reduce staff morale and
confidence
• Cost base may not be sustainable
• May impact Group’s reputation as an
investor of proprietary capital and as
a manager of 3iN and other funds
• Increases the importance of the role
of bolt-on acquisition opportunities
Risk management
and mitigation
• Regular monitoring of investment
and divestment pipeline
• Early involvement of Investment
Committee as new investment ideas
are identified
• Disciplined approach to sourcing
investment opportunities and pricing
• Regular review of asset allocation
• Focus on bolt-on acquisition
opportunities, which can be more
attractively priced and offer synergy
benefits
FY2025 outcome
• We invested £318 million in three
new investments in our Private Equity
portfolio, increased our investment
in Action and completed 12 bolt-on
acquisitions in Private Equity
• Investment Committee maintained
a cautious stance, declining a number
of investment proposals where price
and risk and reward failed to meet
Group requirements
• We realised proceeds of £1,837 million
including £1,164 million proceeds
received from Action’s capital
restructuring
Principal risk
Portfolio sustainability risk profile/performance
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• Poor or insufficient management
of sustainability risks or adverse
developments impact 3i’s reputation
as an investor
• Potential impact on NAV, realisation
potential and shareholder returns
• May affect 3i’s ability to meet external
reporting obligations or published
targets
Risk management
and mitigation
• Investment Committee, GRC and
Sustainability Committee involvement
with Board oversight
• Responsible Investment policy
• Structured approach to identify and
manage sustainability risks and themes
and to collect relevant data as part of
the portfolio company review process
• Early engagement with 3i
Communications team in the event
of any incidents
• Limited exposure to higher risk sectors
and geographies
• Close monitoring of trends and
developments in external reporting
• Dedicated 3i sustainability resources
and provision of training where
required
FY2025 outcome
• Further refinements in the monitoring
of sustainability risks and portfolio
performance, including development
of a human rights framework and high-
level assessment of nature-related
impacts and dependencies
• Enhancements to the annual
sustainability assessment questionnaire
for portfolio companies
• Progress on an individual and portfolio-
wide engagement with portfolio
companies covering material topics,
including CSRD, human rights and
climate
• Progress in the number of portfolio
companies having science-based
targets at 31 March 2025, seven across
Group and 3iN in comparison to one
as of the FY2023 base year
• Collected Scope 1 and 2 data from
100% of our Private Equity and
economic infrastructure portfolio
companies1
1
Excludes some legacy minority and other minority
investments where we have limited influence.
Performance and risk
Principal risks and mitigations – aligning risk to our strategic objectives continued
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Operational
Principal risk
Cyber risks
This risk was
promoted from
the watch list to
principal risk in the
period
Link to strategic
objectives
Potential impact
• Disruption to core business operations
and services (within the Group or at a
key third-party supplier impacting the
Group) or within certain large portfolio
companies
• Loss, theft, or compromise of sensitive
data
• Reputational damage leading to loss
of confidence of existing or prospective
shareholders
• Financial loss due to remediation costs
and operational downtime
• Regulatory penalties and legal
consequences
• May impact portfolio company
valuation and NAV
Risk management
and mitigation
• 24/7 threat monitoring with defined
incident response protocols
• Part time CISO provides independent,
expert input
• Regular monitoring of cyber risks and
performance via KPI framework
• Technical controls
• Penetration testing and vulnerability
scans
• Periodic cyber security training for all
staff and ethical phishing programme
• Information Security policies and
incident management processes,
which are periodically tested and
refreshed
• Annual assessment of portfolio
company cyber maturity with
remediation actions where required
FY2025 outcome
• The GRC received updates on cyber
security and penetration testing, and
business resilience including IT and
disaster recovery during the year
• Increasing number of cyber incidents
reported across the portfolio and at
Group level during the year; none
however were of a serious nature
• Improved cyber security maturity and
detective and preventative controls
• Enhancements made to business
operational resilience and in managing
third-party IT supplier risk
• 3i staff training and awareness
campaigns on cyber security risks
• CTO Forum held; continued sharing of
awareness and best practices across the
portfolio
Principal risk
Ability to recruit, develop and retain key people
Movement in risk
status in FY2025
Link to strategic
objectives
Potential impact
• Impairs ability to deliver key
performance objectives
• Potential to delay execution of strategic
plan with possible impact on
shareholder returns
Risk management
and mitigation
• Specific focus by Remuneration
Committee which approves all material
incentive arrangements to ensure they
reflect market practice
• Annual Board review of succession
planning
• Regular review of resourcing and key
man exposures as part of business line
reviews and the portfolio company
review process
• HR policies and procedures for
recruitment and vetting and ongoing
performance management
FY2025 outcome
• Organisational capability and
succession plan reviewed by the Board
in September 2024
• Successful talent recruitment and
continuous training and development
programmes throughout the year.
18 new hires in FY2025
• Limited staff voluntary turnover of 7.6%
• Good progress with recruitment
and integration of new hires
Performance and risk
Principal risks and mitigations – aligning risk to our strategic objectives continued
3i Group plc | Annual report and accounts 2025
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Section 172 statement
The Directors believe that, during the year,
they have, individually and together, acted
in a way that they consider, in good faith,
was most likely to promote the success
of the Company for the benefit of its
members as a whole, and in doing so had
regard to the factors set out below
(“section 172 factors”).
Our business model is set out on pages 14 and 15 and the Board’s
strategic objectives and key performance indicators are set out
on pages 16 and 17.
When making decisions, the Board takes into consideration the
Company’s purpose and strategic objectives, as well as the potential
long-term impact of those decisions on its various stakeholder
groups, including those listed in section 172 of the Companies Act
2006 (“section 172”). A summary of the principal section 172 factors
is set out below.
Section 172 factors
The likely consequences of any decision
in the long term
Our purpose and strategy, including our long-term responsible
investment approach, aims to drive sustainable growth in our
investment portfolio.
The interests of the Company’s employees
Our employees are critical to the success of the Company.
Our approach as a responsible employer is described more fully
in the Sustainability section.
The need to foster the Company’s
business relationships with suppliers,
customers and others
We engage with all our third-party service providers, suppliers and
customers in an open and transparent way to foster strong business
relationships to ensure both the success of the Company and its
legal and regulatory compliance.
The impact of the Company’s operations
on the community and the environment
We embed responsible business practices throughout our
organisation by promoting the right values and culture. In addition
we partner with charities which relieve poverty, promote education
and support elderly and disabled people.
The desirability of maintaining a reputation
for high standards of business conduct
Our success relies on maintaining a strong reputation and seeking
to ensure our values and culture are aligned to our purpose, our
strategy and our ways of working.
The need to act fairly towards all members
of the Company
The Board engages actively with its shareholders and takes
into account their interests when implementing our strategy.
Performance and risk
Directors’ duties under Section 172
3i Group plc | Annual report and accounts 2025
94
Read more in the
Strategic report
Read more in the
Governance report
Read more in the
Sustainability report
Read more in the
Sustainability report
Read more in the Overview and strategy
section and the Sustainability report
Read more in this section
and in the Governance report
Contents
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How stakeholder
interests have influenced
decision making
The Board takes into account stakeholder
interests and other section 172 factors
in its key business decisions. Directors are
reminded of their section 172 duties
at Board meetings.
Throughout the year and when implementing the Company’s
strategic priorities, the Board has taken account of the varied
interests of the Company’s stakeholders and the impact of key
decisions on them. The Board recognises that not all decisions will
yield positive outcomes for every stakeholder group. The Board and
management take account of these conflicts during decision making.
Examples of key decisions made by the Board this year, along with
how stakeholder interests and other section 172 factors were
considered, are detailed below. Additional information on Board
decision making can be found on pages 107 to 109.
Key decisions in the year
FY2024 second dividend and FY2025 first dividend
Background: In May 2024 the Board decided on an increased
total dividend for FY2024 and in November 2024 a first dividend
for FY2025 (in line with the Company’s dividend policy announced
in May 2018) of one half of the total dividend for the previous year.
Stakeholder considerations: In May 2024 the Board carefully
considered factors relevant to setting the FY2024 second dividend.
The Board considered that in setting the dividend it needed to
ensure the reward for shareholders was reflective of the Company’s
strong performance in FY2024, whilst taking account of the
Company’s future cash flow needs including the need to maintain
liquidity for investment as well as operational and other costs, whilst
maintaining a robust, low-geared balance sheet. Despite adverse
macro-economic conditions, the Company’s portfolio had performed
well overall with excellent performance from Action and resilient
performance across the rest of the portfolio, notwithstanding some
pockets of weakness.
Impact on the success of 3i: Being thoughtful about setting the
dividend is important as it potentially impacts a number of the
Company’s stakeholders. In particular, some 3i shareholders rely on
the consistent application of the Company’s dividend policy, which
is an important aspect of the investment case for them.
Increasing the Company’s stake in Action
Background: Action has been identified as an investment to be held
for the long term. From time to time opportunities arise for the
Company to acquire additional shares in Action from other investors.
Prior to each such acquisition, that additional new investment is
considered on its own merits to identify whether the investment
is an appropriate use of the Company’s capital.
In the year, the Company acquired additional interests in Action for a
net consideration of £768 million taking the Company’s interest in
Action from 54.8% to 57.9%. As part of these transactions, the Company
completed the final payment of the carried interest liability relating to
Action. Further details of the transactions are set out on page 25.
Stakeholder considerations: Shareholders have a direct interest in
the success of the Company’s investments. The Company’s ability
to make such investments also affects our fund investors, as the
transactions can provide a mechanism for fund investors who wish
to sell interests in Action, or acquire additional interests, to do so.
The transactions also ensured that participants in the relevant carried
interest scheme were paid in cash for their interests, which might
otherwise not have been realisable for many years.
Impact on the success of 3i: The Directors believe these further
investments in Action will prove to be profitable investments and
will promote the long-term success of the Company.
Appointment of an additional non-executive Director
Background: A key task for the Board and Nominations Committee
is keeping the size, balance and composition of the Board under
review to ensure that the Board has the necessary skills and
experience to enable the Group to deliver its current and future
strategic objectives. This includes the need to ensure orderly
succession among the non-executive Directors. Following the
retirement of Ms Banszky at the 2023 AGM, the need to appoint an
additional non-executive Director in the medium term was identified.
Further details of the process, which led to the appointment of Mr
Patel as an additional non-executive Director in February 2025, are
set out on page 115.
Stakeholder considerations: Sound governance of the Company
is a key concern for our shareholders and holders of our debt,
as it impacts the ability of the Board to promote the success
of the Company for the benefit of its members as whole.
Impact on the success of 3i: The Board is now satisfied that the
composition of the Board meets the Company’s needs.
For the purposes of the UK Companies Act 2006, the Strategic report
of 3i Group plc comprises pages 1 to 95.
By order of the Board
Simon Borrows
Chief Executive
14 May 2025
Performance and risk
Directors’ duties under Section 172 continued
3i Group plc | Annual report and accounts 2025
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What’s in this section
Chair’s governance review
97
Governance at a glance
98
Corporate governance statement
99
Governance framework
101
Board of Directors
102
Executive Committee
104
The role of the Board
106
How the Board operates
107
What the Board did in FY2025
108
Engaging with stakeholders
110
Board performance review
114
Nominations Committee report
116
Audit and Compliance Committee report
121
Resilience statement
127
Valuations Committee report
130
Directors’ remuneration report
135
Additional statutory and corporate
governance information
148
3i Group plc | Annual report and accounts 2025
96
Governance
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Our corporate governance framework
anchors the execution of 3i’s strategic
objectives.
I am pleased to present our Corporate Governance Report. This
summarises our corporate governance framework and explains how
we, as a Board, have taken decisions.
Robust and effective corporate governance is fundamental to 3i’s
operations and to the generation of consistent, long-term value for
our shareholders.
As set out in my letter on pages 2 and 3, 3i has performed well
despite ongoing macro-economic challenges and geopolitical
uncertainties. As a Board, we are confident in 3i’s ability to execute
its strategic objectives as discussed more fully in the Chief Executive’s
Statement on pages 6 to 11.
Board activities and consideration of stakeholders
The Board is conscious of its duty to consider the interests of a broad
spectrum of stakeholders and other section 172 factors. An overview
of the range of matters that the Board discussed and debated at its
meetings during the year can be found on pages 108 and 109. How
we engaged with our stakeholders is summarised on pages 110 to
113. The Company’s section 172 statement is available on page 94.
We work with 3i’s management to ensure that the Company
possesses the necessary financial and human resources to execute
its long-term strategy and promote its long-term success.
Culture and values
Consistent with previous years, the Board recognises the importance
and differentiation that culture and strong values bring to the delivery
of performance. As a Board and as Directors individually we aim to
lead by example, promoting a culture of integrity, rigour, energy,
accountability and ambition, in addition to providing constructive
challenge to management.
Board composition
Hemant Patel joined the Board on 3 February 2025. There have been
no other changes to the Board composition during the year. We
continue to maintain an effective succession plan, more details of
which are contained in my Nominations Committee report on pages
116 to 120.
Dividend
We have continued with our dividend policy to maintain or grow the
dividend year on year, subject to the strength of our balance sheet
and the outlook for investment and realisations. As a result, the Board
has recommended a second FY2025 dividend of 42.5 pence per
share, taking the total dividend for the year to 73.0 pence per year.
Subject to shareholder approval, this will be paid in July 2025.
David Hutchison
Chair
14 May 2025
Governance
Chair’s governance
review
3i Group plc | Annual report and accounts 2025
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Strong corporate governance is essential to create value for our
stakeholders and underpins the long-term success of our company.
Highlights
as at 31 March 2025
25%
Total return
on equity
Supporting management in a challenging macro-economic
climate to enable them to pursue 3i’s long-term value creation
strategy in the portfolio.
Read more in the Chief Executive‘s statement
and the Financial review
2,542p
NAV per share
An increase of 22% in the NAV in FY2025.
Read more in
Key performance indicators
73.0p
Dividend
per share
Payment of the first dividend of 30.50 pence per share in January
2025 and recommendation of the second dividend in July 2025
of 42.50 pence per share.
Read more in
Financial review
Board focus areas
as at 31 March 2025
Strategy
Financial
Portfolio companies
Read more in
Key performance indicators
Read more in
Financial review
Read more in
Business review
Purpose, culture
and values
Risk management
and internal control
Governance
Read more in
Sustainability report
Read more in
Risk Management
Read more in
Governance report
A balanced Board
as at 31 March 2025
40%
Female
representation
20%
Ethnically diverse
70%
Independent directors
Board priorities
for FY2026
Growth
To support the management
in delivering the strategic plan
Shareholders
To achieve long-term
growth for shareholders
Sustainability
Continue to oversee delivery
of the sustainability strategy
Governance
Governance at a glance
3i Group plc | Annual report and accounts 2025
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The Financial Reporting Council’s UK Corporate Governance Code 2018
(the “Code”) is the standard against which we measured ourselves in FY2025.
The Company complied with all of the provisions set out in the Code
throughout the period under review, save for provision 19 of the
Code in respect of the Chair’s tenure.
Details on how we have applied the principles set out in the Code
and how governance operates at 3i have been summarised
throughout this Governance section and elsewhere in this Annual
report, as set out below. (The Code is available to view on the
Financial Reporting Council’s website).
Our Governance framework is set out on page 101.
Corporate Governance code
Board leadership and
Company purpose
Audit, risk and
internal control
Effective Board
102-109
External Auditor and Internal Auditor
125-126
Purpose, values and culture
1, 40-57, 80, 109, 126
Fair, balanced and understandable review
124, 153
Governance framework
101
Internal financial controls and risk management
80-93, 121-129
Stakeholder engagement
110-113
Workforce policies and practices
52-55, 151-152
Division of responsibilities
Remuneration
Role of Chair
107
Linking remuneration to purpose and strategy
135-136
Independence
148
Remuneration policy review
136
External commitments and conflicts of interest
102-103, 151
Independent judgement and discretion
135-147
Board resources
97, 107
Composition, succession
and evaluation
Appointment to the Board
100, 116, 149
Board skills, experience and knowledge
102-103, 119
Annual Board evaluation
114-115
Governance
Corporate Governance statement
3i Group plc | Annual report and accounts 2025
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Explanation on Provision 19 –
Chair tenure
The Board and the Nominations Committee
have carefully considered the extended
tenure of the Chair.
As detailed in our previous Annual reports, when appointing David
Hutchison as Chair in November 2021, the Nominations Committee
and the Board were mindful of the Code’s provision regarding a
Chair’s tenure exceeding nine years, and the fact that David had then
already served as a non-executive Director for eight years. Despite
this, the Nominations Committee and the Board, when considering
the Company’s long-cycle investment business, recognised that
David’s extensive knowledge of the Company’s business and
portfolio assets – gained in part from his seven-year tenure as Chair
of the Valuations Committee – and his understanding of the Board’s
conservative balance sheet and selective investment strategies, made
him the most suitable candidate to promote the success of the
Company.
The Nominations Committee and the Board recognise the potential
risks associated with extended tenure of a chair, including the
possibility of compromised objectivity, inadequate management
accountability, and insufficient promotion of constructive challenge
among Board members. To mitigate the risks associated with
extended tenure a number of steps have been taken as detailed
below. The Nominations Committee and the Board have noted that
to date shareholders have not expressed any significant concerns
to the Company relating to the Chair’s continued appointment.
Steps taken to mitigate risks associated with extended tenure
• The Committee and the Board sought to balance this
appointment by appointing an experienced Senior Director
as Senior Independent Director. This role, filled by Lesley
Knox since October 2021, includes ensuring corporate
governance arrangements remain robust and appropriate
and leading the annual review of whether David’s continued
tenure as Chair is in the best interests of the Company.
• It was agreed that the Nominations Committee would
undertake an annual review, led by the Senior Independent
Director, of the continued appropriateness of David’s
appointment. This would be in addition to the mitigation
provided by the Board and Chair annual performance
reviews.
The first such annual review was held by the Nominations
Committee in March 2023 and further reviews were
conducted in March 2024 and March 2025 (all in the absence
of David). Each of these reviews concluded that David
continued to perform effectively as Chair, maintained
objective judgement and independence, and promoted
constructive challenge among Board members.
The Committee also noted that in a business where long-
term knowledge of the business and its assets is crucial,
David’s continued appointment was appropriate. The
Committee’s overall conclusion in March 2025 was that
David’s continued appointment as Chair for the coming year
was in the best interests of the Company and that the
balance and independence of the Board remained
appropriate.
• Since 31 March 2023, David has not been a member of the
Remuneration Committee.
• The appointment in November 2021 of Peter McKellar,
an independent non-executive Director with extensive
experience of asset management and asset valuation, as
Chair of the Valuations Committee, provided continuity and
effective governance of that Committee.
The Nominations Committee will undertake its next review in
March 2026.
Recommendation
The Board has carefully considered the Chair’s tenure and believes that it is in the best interests of 3i and its stakeholders that
David remains as Chair. The Board is therefore recommending to shareholders the re-election of David at the forthcoming
AGM on 26 June 2025.
For more information
Page 117
Governance
Corporate governance statement continued
3i Group plc | Annual report and accounts 2025
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Board
•
Approves risk appetite and strategy
•
Responsible for ensuring effective risk management and oversight processes exist
•
Oversees sustainability strategy, approach and policies
•
Assisted by four Board Committees with responsibility for specific areas
•
Delegates management to the Chief Executive
•
Assesses investment performance against objectives
Nominations
Committee
Audit and Compliance
Committee
Valuations
Committee
Remuneration
Committee
•
Responsible for ensuring that the Board
has the necessary skills, experience and
knowledge
•
Responsible for appointing a diverse
Board
•
Responsible for Board and senior
executive succession
•
Reviews and oversees financial and non-
financial reporting (including sustainability
matters), risks and internal controls, and
the relationship with the External auditor
•
Reviews and challenges management
reports
•
Receives updates from the Chief
Executive on outputs from GRC
•
Oversees tax policy and strategy
•
Specific and primary responsibility for the
valuation policy and valuations (including
underlying assumptions) of the Group’s
investment portfolio
•
Direct engagement with the External
auditor, including its specialist valuations
team
•
Ensuring a remuneration culture
weighted towards performance based
variable reward, whilst discouraging
inappropriate risk taking and taking non-
financial indicators, including
sustainability indicators, into account
•
Approves carried interest and asset
performance linked schemes
•
Ensuring Executive Directors’
remuneration is closely aligned with
shareholder returns
•
Oversees the implementation of fair
remuneration for employees
Chief Executive
•
Delegated responsibility for management of the Group
•
Delegated responsibility for investment decisions
•
Delegated responsibility for risk management
•
Delegated responsibility and day-to-day accountability for sustainability matters
Executive Committee
Investment Committee
Group Risk Committee
Sustainability Committee
•
Assists the Chief Executive in setting the
Group strategy, including sustainability
aspects
•
Monitors divisional performance
•
Facilitates information sharing between
divisions
•
Responsible for recruitment and
retention
•
Meets monthly
•
Manages the Group’s investment
portfolio and monitors its most material
risks
•
Meets when required
•
Strict oversight of each step of the
investment lifecycle
•
Approves investment, divestment and
material portfolio decisions
•
Monitors investments against original
investment case
•
Ensures investments are in line with the
Group’s investment policy and risk
appetite
•
Implements the Responsible Investment
policy
•
Chaired by the Chief Executive
•
Assists the Chief Executive with the
oversight of risk management
•
Implements the Group’s risk appetite
policy and monitors performance
•
Maintains the Group risk review which
details its principal risk exposures; a
watch list of new and emerging risks;
and appropriate mitigations and
controls
•
Two members of the GRC form the Risk
Management function as required by
FCA rules
•
Maintains oversight of sustainability
risks, and relevant sustainability
regulations
•
Oversight and review of the Responsible
Investment policy
•
Chaired by the Chief Executive
•
Advises the Chief Executive, directly
and through the Investment and Group
Risk Committees, on sustainability risks
and opportunities
•
Develops the Group’s sustainability
approach, and related policies and
procedures
•
Ensures the Group’s compliance with
relevant sustainability-related legal and
regulatory requirements, standards and
guidelines
•
Coordinates sustainability-related
activities and initiatives
•
Reviews and monitors the Group’s
sustainability performance
•
Monitors stakeholder expectations,
market developments, trends and best
practice in relation to relevant
sustainability matters
•
Chaired by the General Counsel
Conflicts Committee
•
Deals with potential conflicts as required
Treasury Transactions
Committee
•
Considers specific treasury transactions
as required
Market Abuse
Regulation Committee
•
Considers potential disclosure matters
as required
Governance
Corporate governance statement continued
Governance framework
3i Group plc | Annual report and accounts 2025
101
Company
Secretary
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Board
of Directors
at 31 March 2025
The Board promotes
a culture of strong
governance across
the business.
David Hutchison
Chair
Chair since November 2021 and non-executive
Director since 2013. David has considerable
investment and banking experience across
a range of asset classes which supports his
leadership of the Board.
Previous experience
Chief Executive of Social Finance Limited from 2009
to 2022. Until 2009 Head of UK Investment Banking
at Dresdner Kleinwort Limited and a member of its
Global Banking Operating Committee. From 2012
to 2017, a non-executive director of the Start-Up
Loans Company.
James Hatchley
Group Finance Director
Group Finance Director since June 2022 and an
Executive Director since May 2022. A member of
Executive Committee, Investment Committee, Group
Risk Committee and Sustainability Committee.
Joined 3i in 2017 and was Group Strategy Director
until June 2022.
Previous experience
Formerly Chief Operating Officer of KKR in Europe
and, before that, Co-CEO of Avoca Capital. Earlier
in his career, James was a corporate finance
professional for 20 years, principally with Greenhill &
Co. and Schroders. He qualified as a chartered
accountant in 1992. Formerly a non-executive director
of Great Ormond Street Hospital for Children NHS
Foundation Trust.
Simon Borrows
Chief Executive
Chief Executive since 2012, and an Executive Director
since he joined 3i in 2011. Chair of the Group’s Risk
Committee, Executive Committee and Investment
Committee. Chair of the Supervisory Board of Peer
Holding I B.V., the Dutch holding company for the
Group’s investment in Action.
Previous experience
Formerly Chair of Greenhill & Co International LLP,
having previously been Co-Chief Executive Officer
of Greenhill & Co, Inc. Before founding the European
operations of Greenhill & Co in 1998 he was the
Managing Director of Baring Brothers International
Limited. Formerly a non-executive director of the
British Land Company PLC and Inchcape plc.
Jasi Halai
Chief Operating Officer
Chief Operating Officer and an Executive Director
since May 2022. A Member of Executive Committee,
Investment Committee, Group Risk Committee and
Sustainability Committee. Joined 3i in 2005 and has
held a variety of posts in the business, most recently
as Group Financial Controller and Operating Officer.
A member of the Supervisory Board of Peer Holding I
B.V., the Dutch holding company for the Group’s
investment in Action and also a non-executive
director of Barratt Redrow plc.
Previous experience
Prior to joining 3i, worked for CDC Group (now British
International Investment) and at Actis following its
demerger from CDC. Jasi is a chartered management
accountant. Formerly a non-executive director of
Porvair PLC.
Governance
Board leadership and Company purpose
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Stephen Daintith
Independent non-executive Director
Non-executive Director since 2016. Chief Financial
Officer and an executive director of Ocado Group
plc. Stephen contributes directly relevant financial
and operating experience as Chair of the Audit and
Compliance Committee, drawn from a range of
consumer, digital, engineering and other international
businesses, to the Board’s decision making.
Previous experience
Formerly an executive director of Rolls-Royce
Holdings plc from 2017 to 2021 and Finance Director
of Daily Mail and General Trust plc (“DMGT”) from
2011 to 2017. Non-executive director of ZPG Plc. Prior
to joining DMGT he was Chief Operating Officer and
Chief Financial Officer of Dow Jones and prior to that
Chief Financial Officer of News International. He
originally qualified as a chartered accountant with
Price Waterhouse (now part of PwC).
Peter McKellar
Independent non-executive Director
Non-executive Director since 2021. Also Chair
of Partners Group Private Equity Limited (formerly
Princess Private Equity Holding Limited) and a non-
executive director of Investcorp Capital plc. Peter
brings to the Board significant experience and
understanding of financial services and asset
management, with a particular expertise in private
equity and infrastructure. This enables him to bring
a valuable asset management perspective to the
Board’s discussions and to those of the Valuations
Committee, which he now chairs.
Previous experience
Formerly Deputy Chair of AssetCo plc, Global Head
of Private Markets at Standard Life Aberdeen plc and a
non-executive board member of Scottish Enterprise.
Previously led Standard Life Investments’ private equity
and infrastructure business and was their Chief
Investment Officer. Prior to that, he held a variety of
finance posts in industry and corporate finance positions.
Lesley Knox
Independent non-executive Director
Non-executive Director since October 2021 and
Senior Independent Director since November 2021.
Also Senior Independent Director of Legal & General
Group plc, non-executive director of Dovecot Studios
Limited, Senior Independent Director and Chair of
Remuneration Committee of Genus Plc, and a trustee
of Grosvenor Group Limited pension fund and
National Galleries of Scotland Foundation. Lesley
brings to the Board’s discussions a wealth of
international, strategic and financial services
experience having spent over 17 years in senior roles
in financial services, including in asset management
and corporate finance.
Previous experience
Formerly held a number of senior roles in financial
services, including head of institutional asset
management at Kleinwort Benson. Also previously
served as Chair of Alliance Trust PLC, as Senior
Independent Director at Hays plc and non-executive
director of SAB Miller plc, Centrica plc and Thomas
Cook Group plc.
Hemant Patel
Independent non-executive Director
Non-executive Director since February 2025. Chief
Financial Officer and an executive director
of Whitbread PLC since March 2022. Hemant brings
to the Board good and relevant financial and
commercial experience from his different roles
in retail and consumer businesses.
Previous experience
Formerly Finance Director, UK and Germany, at
Whitbread, Finance Director of Greene King and before
that worked at Asda-Walmart for 11 years, in various
management roles including Commercial Finance
Director, Director of Own Label and Director of Strategy.
He also had several finance roles over six years at Mars,
Inc. Hemant was non-executive Director and Audit Chair
at the Department of Digital, Culture, Media and Sport
from 2020 to 2023 as well as being on the board of the
Cultural Recovery Fund. He was also a Trustee of the
Royal Armouries Museum from 2010 to 2019 and Chair
from 2018 to 2019. Hemant is a Chartered Management
Accountant.
Coline McConville
Independent non-executive Director
Non-executive Director since 2018. Also a member
of the Supervisory Board of Tui AG and a director
of EBOS Group Limited. Coline has a diverse
commercial background, having worked in a range
of sectors and also brings to the Board significant
listed board experience including chairing several
remuneration committees and previously acting as
Senior Independent Director at Fevertree. This
enables her to make valuable contributions to the
Board’s discussions and to those of the Remuneration
Committee, which she now chairs.
Previous experience
Formerly non-executive director and Chair of the ESG
Committee at King’s Cross Central General
Partnership, a non-executive director of Fevertree
Drinks plc, Travis Perkins plc, Tui Travel plc, UTV Media
plc, Wembley National Stadium Limited, Shed Media
plc, HBOS plc, Inchcape plc and Halifax plc. Prior to
that was Chief Operating Officer and Chief Executive
Officer Europe of Clear Channel International Limited
and had previously worked for McKinsey and LEK.
Alexandra Schaapveld
Independent non-executive Director
Non-executive Director since 2020. Also non-
executive director and Chair of the Audit Committee
at Société Générale S.A. Alexandra brings extensive
financial services expertise in a number of important
markets for 3i as well as considerable board
experience in a variety of sectors. These help provide
an international perspective to the Board’s decision-
making process.
Previous experience
Formerly on the boards of Bumi Armada Berhad,
Vallourec S.A., FMO N.V., Stage Entertainment N.V.,
Holland Casino N.V., VU University and VU Medical
Center and Duin & Kruidberg. Prior to that, many
years of corporate and investment banking at RBS
and ABN AMRO.
Governance
Board leadership and Company purpose continued
Board of Directors continued
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Executive
Committee
at 31 March 2025
Simon Borrows
Chief Executive
James Hatchley
Group Finance Director
Jasi Halai
Chief Operating Officer
Page 102
See profiles
Simon Borrows
Chief Executive
Jasi Halai
Chief Operating Officer
James Hatchley
Group Finance Director
Kevin Dunn
General Counsel and Company Secretary
Joined 3i in 2007 as General Counsel and Company
Secretary. Responsible for 3i’s legal, compliance,
internal audit and company secretarial functions.
A member of Executive Committee, Group Risk
Committee and ESG Committee.
Previous experience
Prior to joining 3i, was a Senior Managing Director,
running GE’s European Leveraged Finance business
after serving as European General Counsel for GE.
Prior to GE, was a partner at the law firms Travers
Smith and Latham & Watkins.
Governance
Board leadership and Company purpose continued
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Peter Wirtz
Head of Private Equity
Joined 3i in 1998 and served as 3i Germany Co-Head
between 2009 and 2019 and Co-Head of Private
Equity from 2019 to 2024. Head of Private Equity
since October 2024. A member of Executive
Committee, Investment Committee and Group Risk
Committee. Also a non-executive director of Luqom,
WaterWipes, OMS Testing and Audley Travel.
Previous experience
Prior to joining 3i, worked for Deutsche Bank and
spent four years with Procter & Gamble in various
finance functions.
Tony Lissaman
Partner and Chief Operating Officer, Private Equity
Joined 3i in 1998 and became Chief Operating
Officer, Private Equity, in 2010. A member of
Executive Committee, Investment Committee, Group
Risk Committee and the Private Equity Leadership
Team. He currently sits on the boards of Scandlines
and MPM.
Previous experience
Prior to joining 3i, worked at KPMG where he
qualified as a Chartered Accountant.
Bernardo Sottomayor
Managing Partner, Head of European Infrastructure
Joined 3i in 2015 as a Partner with responsibility for
origination and execution of new investments across
Europe. Managing Partner, Co-Head of European
Infrastructure from July 2022 to February 2025 and
Head of European Infrastructure since February 2025.
A member of Executive Committee, Investment
Committee and Group Risk Committee. Also a non-
executive director of TCR and ESP.
Previous experience
Prior to joining 3i, was a Partner at Antin Infrastructure
and his other previous infrastructure management
experience includes roles as Managing Director at
Deutsche Bank’s European infrastructure fund, Head
of M&A at Energias de Portugal and further
infrastructure M&A advisory experience with UBS
and Citigroup in London.
Julien Marie
Chief Human Resources Officer
Joined 3i in 2001 as HR Manager, was appointed HR
Director in 2004 and Chief Human Resources Officer
in 2021. A member of Executive Committee and
Group Risk Committee.
Previous experience
Prior to joining 3i, worked at Bouygues Construction
and Bouygues Telecom for six years.
Rob Collins
Managing Partner, Head of North American Infrastructure
Joined 3i in 2017 as the Managing Partner for North
American Infrastructure. A member of Executive
Committee and the NAIF Investment Committee.
Also a non-executive director of Smarte Carte,
Regional Rail and EC Waste.
Previous experience
Prior to joining 3i, led Hastings’ infrastructure
investment team in North America and Europe.
Founded the infrastructure M&A practice at Morgan
Stanley and Greenhill where he was a Managing
Director at both firms. Started his infrastructure career
at Goldman Sachs after serving as a nuclear-power
officer in the US Navy.
Governance
Board leadership and Company purpose continued
Executive Committee continued
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The role of the Board
The Board’s role is to lead the Company
in promoting its long-term success and
thereby generate value for shareholders.
The Board operates within a robust
corporate governance framework
and ensures that this framework is
embedded across the organisation.
The Board oversees the Company’s
purpose, values and strategy and satisfies
itself that these are aligned with the
Company’s culture. All Directors are
expected to demonstrate integrity and
adhere to the Company’s culture and
values.
The Board approves the Group’s strategic objectives and ensures
the necessary resources are in place for the Company to meet these
objectives through a Board approved planning and budgeting
process. The Board measures performance against those objectives
using the KPIs set out on pages 16 and 17 which are reported to the
Board in the monthly Board report.
The Board, through its Audit and Compliance Committee, assesses
and monitors behaviours and adherence to the Company’s values.
Regular reports from the Internal Audit and Group Compliance
teams consider and comment on culture within the business. The
Remuneration Committee reviews workforce remuneration and the
alignment of incentives and rewards with culture. The Board ensures
that employee policies and practices are consistent with the
Company’s culture and values and support its long-term success
during its annual review of succession planning and strategic
capability.
The Board meets formally on a regular basis for scheduled Board
meetings and on an ad hoc basis when the need arises. There is
a clearly defined schedule of matters reserved for the Board. The
Board is assisted by various Principal Board Committees which report
to it regularly. Details of their activities in the year are provided
on pages 116 to 147.
Attendance at Board and Committee meetings1
Independence
Board
Audit and
Compliance
Committee
Nominations
Committee
Remuneration
Committee
Valuations
Committee
Total meetings held1
7
6
3
7
4
Number attended:
D A M Hutchison
Independent on appointment
7(7)
–
2(3)
–
4(4)
S A Borrows
Executive Director
7(7)
–
–
–
4(4)
J G Hatchley
Executive Director
7(7)
–
–
–
4(4)
J H Halai
Executive Director
7(7)
–
–
–
–
S W Daintith
Independent
7(7)
6(6)
3(3)
–
–
L M S Knox
Independent
7(7)
–
3(3)
6(7)
2(4)
C McConville
Independent
7(7)
6(6)
3(3)
7(7)
–
P A McKellar
Independent
7(7)
–
3(3)
7(7)
4(4)
H K Patel2
Independent
1(1)
1(1)
1(1)
–
–
A Schaapveld
Independent
7(7)
6(6)
3(3)
7(7)
4(4)
1
This table shows the number of scheduled full meetings of the Board and its Committees attended by each Director who was a member thereof in the year, together with (in brackets) the number of meetings they were eligible
to attend. In addition to these meetings a number of additional meetings of the Board and its Committees were held, often at short notice, to deal with ad hoc business as it arose. Non-attendance at meetings was due to
unavoidable prior commitments or illness. As explained in this report Mr Hutchison did not attend the Nominations Committee meeting which included discussion of the Chair’s tenure and performance.
2
Mr Patel was appointed as a Director with effect from 3 February 2025.
Non-executive Directors also attended a number of other Company meetings, portfolio company reviews and Infrastructure partner reviews
to increase their understanding of the 3i business, the portfolio companies and the strength and depth of our people.
Governance
Board leadership and Company purpose continued
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How the Board
operates
The Board meets regularly and holds two meetings a year in non-UK
locations, including one in Amsterdam, providing a chance for non-
executive Directors to meet our local teams and the management of
selected portfolio companies. The January 2025 Board and
Committee meetings were held in Amsterdam where Directors met
the Action senior management team at Action’s headquarters and
visited an Action store. They also met and received presentations
from the CEO of European Bakery Group and the Private Equity team
for Royal Sanders. In March 2025, the Board and Committee
meetings were held at 3i’s Frankfurt office where Directors met 3i’s
Frankfurt team and received presentations from the CEOs of OMS
and Luqom.
The Board holds an annual Strategy Day.
The Board receives regular reports on potential conflicts of interests
involving Directors and any actual conflicts of interest identified are
managed appropriately. This may involve excluding the Director
concerned from relevant information and discussions.
There is a clear division of responsibilities between the Chair and
Chief Executive. Day-to-day management of the Group is the
responsibility of the Chief Executive. To assist him in this role, the
Chief Executive has established a number of additional management
committees, including the Investment Committee, Group Risk
Committee and Sustainability Committee, which are outlined in
our governance framework on page 101.
The Board ensures that it has the policies, processes, information,
time and resources it needs in order to function effectively and
efficiently.
Responsibilities of the Chair
• Leads the Board and is responsible for its overall effectiveness
in directing the Company.
• Leads the Board in its oversight of the Company’s purpose,
values and culture.
• Leads the Board in setting its agenda, approving strategy, monitoring
financial and operational performance, and establishing the Group’s
risk appetite.
• Organises the business of the Board, ensuring the Company’s
effectiveness, and the maintenance of an effective system of internal
controls.
• Ensures that Directors receive accurate, timely and clear information.
This includes ensuring that the non-executive Directors receive regular
reports on shareholders’ views on the Group.
• Responsible for the composition of the Board, facilitates constructive
Board relations and the effective contribution of all non-executive
Directors.
• Leads the annual Board and Board Committee evaluation process.
Responsibilities of the Chief Executive
• Direct charge of the Group on a day-to-day basis and is accountable
to the Board for the financial and operational performance of the
Group.
• Chairs the Investment Committee to review the acquisition,
management and disposal of investments.
• Leads the Executive management team to develop and implement
the Group’s strategy and manage the risk and internal control
framework.
• Reports to the Board on financial and operational performance, risk
management and progress in delivering the strategic objectives.
• Regularly engages with shareholders and other key stakeholders
on the Group’s activities and progress.
• Oversees the implementation of the Sustainability strategy.
• Oversees the Group’s values and culture.
Role of the Senior Independent Director
• The Senior Independent Director provides a sounding board for the
Chair and serves as an intermediary for the other Directors and the
shareholders.
• Leads succession planning for the Chair.
• Leads the Chair’s performance review and the annual review of the
continued appropriateness of the Chair’s appointment.
Role of non-executive Directors
• Provide constructive challenge, strategic guidance and hold
management to account.
• Scrutinise the performance of management in meeting agreed
objectives.
• Seek assurance on the integrity of the financial information and that
financial and non-financial controls and systems of risk management
are robust and defensible.
• Determine appropriate levels of remuneration for Executive Directors
and Executive Committee and together with the Chair, have a prime
role in appointing Directors and in succession planning for the Board.
• Ensure that they have sufficient time to meet their Board
responsibilities.
Governance
Division of responsibilities
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What the Board did
in FY2025
In FY2025, the Board met for seven
scheduled meetings and a strategy day
in December 2024 (see page 106).
The Chair sets the Board’s agenda. Board members and, as
appropriate, executives from the relevant business areas are invited
to present on key items allowing the Board the opportunity to debate
and challenge initiatives directly with the senior management team.
As described on page 94 when making decisions the Board has
regard to the interests of stakeholders, as well as the section 172
factors.
Examples of some important decisions taken by the Board in the year
and how, where relevant, the Board had regard to the interests of
relevant stakeholders are set out on page 95. Our key stakeholders
are set out below and discussed in more detail on pages 110 to 113.
In addition to the Board decisions referred to above, the Board also
dealt with its regular annual cycle of business, examples of which are
set out on the next page.
Our key stakeholders
Governance
Division of responsibilities continued
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FY2025 Focus areas
Matters approved
Other matters considered/outcomes
Stakeholders
Purpose, culture
and values
• Responsible Investment Policy
• Operation and effectiveness of the
Remuneration Policy both for Executive
Directors and the wider employee group
• Executive and senior management
succession planning
• Organisational capability
• Employee leadership and development
initiatives
• Diversity, equity and inclusion initiatives
• Equal Opportunities and Diversity policy
and compliance with external board
diversity recommendations
• Board evaluation
Portfolio companies
• Non-executive Director approvals for
certain investments and divestments
• Portfolio company valuations
• Presentations from the CEOs of Action,
European Bakery Group, Luqom, OMS,
and the deal team of Royal Sanders
• Visit to Action HQ and Action store
• Detailed reporting on Action and rotating
updates on portfolio companies at Board
and Valuations Committee
• Sustainability reviews of portfolio
companies
• Attendance at portfolio company reviews
and Infrastructure partner reviews
Strategy
• Group’s approach to environmental
sustainability and climate change
• Senior leadership succession and
contingency planning
• Strategy day
– 3i Group strategic financial planning
and analysis
– Private Equity strategic plan and sector
presentations
– Analysis and materials related to our
long-term hold portfolio companies
– Infrastructure strategic plan
• Private Equity and Infrastructure business
and portfolio updates
Financial
• Recommendation of the FY2024 second
dividend paid in July 2024 and payment
of the FY2025 first dividend in January
2025
• Operating budget
• Annual report, half-year report and
quarterly updates
• Approval of investment valuations
• Financial reporting from the Group Finance
Director including key financial highlights
and performance against budget
• Valuations reporting from Group Finance
Director and Chief Operating Officer
• Market overviews
• Funding and Treasury review
• Assessment of investment performance
against objectives
Risk management
and internal control
• Board risk appetite
• Risk review
• Compliance and internal controls updates
• Detailed reporting from the Group Risk
Committee including updates on the
business continuity plan, cyber security
and IT
• Going concern, Viability statement, stress
testing and Resilience statement
Governance
• Approval of the Chair’s continued tenure
• Appointment of a new non-executive
Director
• Approval of changes to Valuations
Committee terms of reference
• Updates on the Code
• Oversight of sustainability strategy and
compliance with sustainability regulation
Governance
Division of responsibilities continued
What the Board did in FY2025 continued
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Engaging with
stakeholders
Engaging and communicating with our
stakeholders is an integral part of 3i’s
business and critical to ensuring our
continued success. We engage with our
stakeholders in a variety of ways, as detailed
in this section.
Engaging with shareholders
The CEO, Group Finance Director and the Group Investor Relations
and Sustainability Strategy Director meet with institutional
shareholders and potential investors after the announcement of the
annual and interim results and throughout the year. The Chair offers
to meet large institutional shareholders once a year.
The Investor Relations and Company Secretariat teams are available
to retail shareholders to respond to their queries.
In FY2025, shareholders were principally interested in the
performance of Action and of the rest of the portfolio, capital
allocation strategy and market conditions for new investments and
realisations.
In addition to this ongoing investor engagement, the Company has
an extensive engagement programme detailed below which enables
investors to make informed decisions about their investment in the
Company:
Our FY2025 Investor Relations programme
We engage shareholders through a full programme of events. Our results presentations and capital markets seminars are webcast live
and available to all who are interested. On-demand webcasts and transcripts are also available on the Company’s website after the events.
Governance
Division of responsibilities continued
3i Group plc | Annual report and accounts 2025
110
2024
2025
June
• BNP Paribas Exane European
CEO Conference
• Annual General Meeting
April
• Barclays European
discount retail forum
September
• Private Equity capital markets
seminar
• Bank of America financials
conference
February
• Q3 performance update
May
• Annual results announcement
and presentation webcast
• Citi diversified financials
conference
July
• Q1 performance update
• Chair’s meetings with
shareholders
• RBC retail conference
November
• Half-yearly results
announcement and
presentation webcast
• JPMorgan UK Leaders
conference
• Barclays retail forum
March
• Action capital
markets seminar
• Morgan Stanley
financials conference
December
• Redburn CEO conference
January
• Consultation on
proposed Executive
Director salary changes
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Institutional investors
• One-on-one meetings with 3i’s UK and international
principal shareholders twice a year and throughout the
year as required.
• Large group investor calls are held after the publication of
the annual and half-year results and quarterly performance
updates, and after other significant developments, to
target both existing and potential institutional investors.
• The Chair offers to meet with significant institutional
shareholders once a year and met a number of large
institutional holders in July 2024. The SID and the Audit
and Compliance Committee Chair are also available as
required.
• In January 2025, the Chair of the Remuneration
Committee consulted our largest shareholders on
proposed changes to the Executive Directors’
remuneration.
• Meetings with potential shareholders on a regular basis
as part of arranged UK and international roadshows and
as required.
• Participation in conferences for institutional investors
organised by a number of international banks and
brokers.
• Engagement with analysts from investment banks by the
Group Investor Relations and Sustainability Strategy
Director.
Annual and half-year results presentations
• The annual and half-year results are presented via live
webcasts accessible to all on the 3i website. Listeners are
encouraged to submit questions during the webcasts.
Individual investors
• Can attend live webcasts of the results presentations and
capital markets seminars.
• Can engage directly with non-executive Directors,
Executive Directors, the Company Secretary and the
Group Investor Relations Director at the AGM.
• Can engage with and contact the Group Investor Relations
and Sustainability Strategy Director and the Company
Secretary, whose contact details are on the website,
to raise issues and provide feedback.
Annual General Meeting
• The AGM is held as an in person meeting, preceded
by business presentations from the Chair and Chief
Executive.
• Shareholders are encouraged to ask questions during the
meeting and have the opportunity to meet Directors
before and after the formal proceedings.
Capital market seminars
• Two capital markets seminars in FY2025, held in
September 2024 and March 2025, both held via a webcast
accessible to all on the 3i website.
• The September 2024 seminar included presentations from
the investment teams on our Private Equity investments in
the Services & Software sector, as well as on our
investment in Audley Travel.
• The March 2025 seminar focused on Action, with results
and strategy updates from the CEO and CFO of Action,
as well as an update by the 3i Chief Executive.
Website
• The 3i website (www.3i.com) provides a wealth of useful
and detailed information for all existing and potential
shareholders, who can also sign up for our email alert
service to be notified of key announcements.
• The website was refreshed in FY2025 to provide more
user-friendly content and information.
Outcome of engagement with shareholders
The extensive Investor Relations programme enables investors to
understand 3i’s performance, assists them in making their investment
decisions and provides them with an opportunity to engage with
Directors and senior management. Executive Directors routinely
update the Board on investor relations activities and on any feedback
received from analysts and shareholders. Any major issues brought
up by shareholders concerning the Group are communicated to and
discussed with the Board.
Governance
Division of responsibilities continued
Engaging with stakeholders continued
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Engaging with other stakeholders
Employees
Why? 3i is a people business. Our people are critical to the
success of the Company and we rely on having motivated
people with the appropriate expertise and skills required
to deliver our strategy.
How? Our approach as a responsible employer is described in
the Sustainability section. The Directors’ report on page 152
includes details on their engagement with our employees.
We continue to support our employees and to maintain
strong employee engagement.
Having meaningful engagement with employees
helps create a strong, supportive work culture,
which develops and retains talent, enabling 3i
to continue to deliver strong performance.
Pages 52-55
Sustainability report
Portfolio
companies
Why? 3i’s long-term, responsible approach to its investments
means that it participates in the active management of its
portfolio companies. Close engagement and a strong
governance framework enables us to help them grow and
create value.
How? Our investment teams work closely with investee
companies and their management teams. One or more
investment team professionals are usually appointed as
directors of each investee company. In addition, regular forums
across the Private Equity and Infrastructure portfolios share best
practice and experience. During the year, we held our biennial
CEO and Chair forum with a theme of the growth agenda.
Topics discussed ranged from the global macro-economic
climate and current geopolitical uncertainties, to delivering
growth through buy-and-build and the latest advancements in
Generative AI. We held a CTO Forum with 25 CTOs from across
our private equity and infrastructure portfolio. Discussions
explored the importance of IT in business strategy and
delivering a successful ERP transformation, as well as sessions
on GenAI and cybersecurity. We also held a CTO Artificial
Intelligence webinar where colleagues shared progress and
learnings on the GenAI landscape.
We are able to share best practice and connect
management teams across the portfolio.
Growing and generating value in the portfolio
companies enables 3i to generate attractive returns
for our shareholders and fund investors,
contributing towards the long-term success of 3i.
Pages 14-15
Our business model
Pages 42-51
Sustainability report
Pages 19-38
Investment activity
Fund investors
Why? Fund investors, like shareholders, want to understand
and have confidence in 3i’s strategy, performance, culture,
sustainability policies, compliance and governance. It is also
important that the Board and management understand issues
that are specific to them.
How? There is an engagement programme with fund
investors and co-investors led by the Fund Investor Relations
team with regular and ad hoc meetings, supported by
comprehensive reporting.
The Chief Executive and relevant investment professionals
participate in some of these meetings, as appropriate.
Fund investors have provided capital we have
invested in certain assets as part of our investment
management activities and which generates fee
income for 3i. They are customers to whom we owe
regulatory duties. Positive engagement with Fund
investors enhances our relationship with them and
provides them with the information they require to
maintain their investment in the relevant fund.
Page 37
Assets under management
Stakeholders
Engagement
Outcome
Governance
Division of responsibilities continued
Engaging with stakeholders continued
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Debt holders
Why? Access to debt markets provides important flexibility and
resilience to the Company’s financial structure.
How? Together with the Group Finance Director, the Group
Treasurer engages with debt providers, hedging counterparties
and rating agencies through regular reviews and updates
including the Group’s results presentations. A dedicated section
on 3i.com is maintained for debt investors.
The Company’s ability to issue further bonds where
appropriate (as with the successful issue in 2023 of
our €500 million euro bond) demonstrates the
benefits of positive engagement with debt holders.
Page 70
Financial review
Page 94
Directors’ duties under Section 172
Pages 181-182
Notes to the accounts
Government
and Regulators
Why? The Company works in a regulated environment and
can only continue to operate if it complies with relevant laws
and regulations.
How? Our Group Compliance team and local professionals
lead our relationships with national and international regulators,
including the UK FCA, the US SEC and the Luxembourg CSSF.
The Company actively participates in policy forums, engages
on regulatory matters and is a member of a number of industry
bodies, including the British Private Equity & Venture Capital
Association and Invest Europe.
We maintain relationships with other governance-related
bodies including the FRC, relevant UK government
departments, ESG rating agencies, the FTSE Women Leaders
Review, the Parker Review and proxy advisers through
participation in consultations, surveys and events.
Maintaining open and constructive dialogue and
strong relationships with relevant authorities and
governance bodies helps support the achievement
of our strategic goals within a compliant framework.
Third-party
professional
advisers and
service providers
Why? The Company relies on its extensive network of
professional advisers and service providers to help it originate,
analyse and execute new investments, to assist with portfolio
management and to support the business operations of the
Company.
How? The investment teams, Executive Directors and functional
teams lead these relationships and maintain close and regular
dialogue with our professional advisers and service providers
who include due diligence providers, operational and IT
support providers, law firms, the Registrars, the External auditor
and the Company’s corporate brokers.
The support from our advisers and service
providers contributes to 3i’s long-term success.
Communities
We embed responsible business practices throughout our
organisation by promoting our values and culture. We use our
influence with our portfolio companies to ensure that they assess
their environmental and social impacts and dependencies and,
where relevant, devise strategies to address them. We also
partner with organisations and charities that support charities
which relieve poverty, promote education and support elderly
and disabled people.
For details of the Company’s contribution to and
engagement with communities see the
Sustainability section.
Page 56
Act as a good corporate citizen
Stakeholders
Engagement
Outcome
Governance
Division of responsibilities continued
Engaging with stakeholders continued
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Board performance review
In accordance with the Code, during the year, the Board conducted its annual review of
its own performance and that of its Committees and the Chair. The review process
operates on a three-year cycle being externally facilitated at least once every three years.
During the year, the performance review was undertaken externally by Lintstock Limited.
Lintstock Limited performed no other services for the group during the year.
Board performance review process
Each Director and
member of Executive
Committee completed
a Board performance
review questionnaire and
(except in the case of the
Chair) a Chair
performance review
questionnaire. They each
had a one-on-one
discussion with Lintstock.
Responses to the Board
performance review
questionnaire were
collated by Lintstock
and a report shared with
the Chair on a non-
attributable basis.
The Lintstock Chair
review report was shared
with the Senior
Independent Director.
The Senior Independent
Director led the review
by the other Directors of
the Chair’s performance
and discussed the
outcome of the review
with him.
The report from
Lintstock was
shared and
discussed with the
Board at its March
2025 meeting.
Topics covered in the 2025 review
• Board composition;
• Board dynamics and relationships;
• Meetings, support and Committees;
• Understanding stakeholder views;
• Oversight of strategy and investments;
• External developments and risks; and
• People and succession.
Findings from the 2025 review
The overall finding was that the Board had continued to
perform strongly and had benefitted from the leadership
provided by the Chair. The review was very positive across a
broad range of issues. It confirmed a consensus between the
Board and executives that they were working well together
and were focussed on the right issues and priorities for the
year ahead. The Board agreed steps including:
• to continue promoting greater interaction between non-
executive Directors and the investment teams and to
deepen non-executive Directors’ knowledge of the
portfolio. This would include greater in person attendance
at the six-monthly portfolio asset reviews;
• to review the allocation of Board time between Action and
other parts of the business, including potential long-term
hold assets;
• to provide additional opportunities for non-executive
Directors to discuss people and organisational
development topics directly with the Chief Human
Resources Officer; and
• to provide additional opportunities for non-executive
directors to discuss investor feedback and themes with
the Group Investor Relations Director and Sustainability
Strategy Director.
Governance
Composition, succession and evaluation
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Focus areas from the 2024 performance review
Actions and steps taken
Continued oversight on the performance of Action
and other long-term-hold assets, and ensuring the Board
developed and maintained appropriate mechanisms
to satisfy itself in this regard.
The Board received regular updates on the performance
of both Action and Royal Sanders, the Company’s second
identified long-term hold asset. Non-executive Directors
attended the six monthly asset reviews and the Board and
Valuations Committee considered and approved the quarterly
valuations. In January 2025, the Board visited Action’s head
office and received presentations from the Action's CEO and
other senior executives as well as visiting an Action store. The
Board also received a presentation on Royal Sanders from the
relevant investment team.
Maintaining oversight over the rest of the
Private Equity and Infrastructure portfolio.
The Board maintained oversight over the Private Equity and
Infrastructure portfolios in various ways including regular
reports from the Chief Executive, involvement in the six-
monthly asset reviews, consideration and approval of the
quarterly valuations as well as presentations from investment
teams and from portfolio companies. In the year, the Board
received presentations from the CEOs of Action, European
Bakery Group, Luqom, OMS, and the deal team of Royal
Sanders.
Director succession planning.
Nominations Committee keeps Director succession planning under
review considering the size, balance and composition of the Board
in light of likely retirements and the needs of the Board going
forward. For further details, see the report of the Nominations
Committee on pages 116 to 120. During the year, Russell Reynolds,
an independent search firm, assisted Nominations Committee in
the search for a new non-executive Director. The process focused
on the best candidate with appropriate skills and qualifications
including being able to chair the Audit and Compliance Committee
when Stephen Daintith retires from the Board. Hemant Patel was
appointed as a Director in February 2025.
The form and process for the FY2025 board
performance review.
After discussions on the form and process for the FY2025 Board
performance review, the Board decided that as required by the UK
Corporate Governance Code the FY2025 review should be
externally facilitated and also decided that for continuity the review
should be facilitated by Lintstock Limited which had led previous
reviews.
Directors review of the performance of the Chair
In her role as Senior Independent Director, Lesley Knox led a review by the Directors of the performance of the Chair which was also
facilitated by the results of the Board performance review conducted by Lintstock Limited. Ms Knox subsequently reported back to the
Board on the review and provided feedback to the Chair.
Read more on page 116
Nominations Committee report
Governance
Composition, succession and evaluation continued
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I am pleased to present the
Nominations Committee report
for the year ended 31 March 2025.
My report explains the role of
the Committee and its
work this year.
What the Committee reviewed in FY2025
• Board and senior management succession
– Non-executive Director recruitment
– Chair tenure
– Contingency Executive Director succession plan
– Board and senior management succession plans
• Board and Chair evaluation
• Size, balance and composition of the Board
Committee membership
Meetings
David Hutchison (Chair)
2(3)
Stephen Daintith
3(3)
Lesley Knox
3(3)
Coline McConville
3(3)
Peter McKellar
3(3)
Hemant Patel
1(1)
Alexandra Schaapveld
3(3)
The column above headed “Meetings” shows the number of meetings of the
Committee attended by each member during the year, together with, in parentheses,
the number of meetings they were entitled to attend. As explained in this report Mr
Hutchison did not attend the meeting which included discussions of the Chair’s tenure
and performance.
Dear Shareholder
Role and purpose of the Committee
The Committee’s principal role is to ensure the Board has the
necessary skills and experience to enable the Group to deliver its
current and future strategic objectives. In doing this it keeps under
review the size, balance and composition of the Board and ensures
that plans are in place for orderly succession for both the Board and
senior management positions, including contingency plans for
unanticipated events. It also reviews the Company’s work on diversity,
equity and inclusion. The Committee’s discussions are
complemented by discussions at meetings of the full Board
where appropriate.
Directors
Directors’ biographical details are set out on pages 102 and 103.
All Directors are subject to re-appointment every year. Accordingly,
at the AGM to be held on 26 June 2025, all the Directors will retire
from office and, being eligible, will seek re-appointment. The Board’s
recommendation for re-appointment of Directors is set out in the
2025 Notice of AGM.
Hemant Patel was appointed to the Board as an independent non-
executive Director with effect from 3 February 2025. There were no
other changes to the membership of the Board during the year.
Throughout the year, Lesley Knox continued to serve as Senior
Independent Director. As Senior Independent Director, Lesley
provides support to me, acts as an intermediary with the other
Directors, if necessary, and oversees my appraisal and the review
of my tenure by the other Directors. Lesley is also available to the
Company’s shareholders to address any concerns they have been
unable to resolve through me, Simon Borrows or James Hatchley
or where they consider these channels to be inappropriate.
Governance
Composition, succession and evaluation continued
Nominations
Committee report
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116
David Hutchison
Committee Chair
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Appointments and appointment process
We maintain a structured and transparent procedure for identifying
the requisite skills and experience, evaluating suitable candidates,
and appointing new Directors. For non-executive Directors, the
assessment process includes an evaluation of their availability to fulfil
their roles. Recommendations for appointments require Board
approval. There was one non-executive Director appointment during
the year. Russell Reynolds, an external search consultancy, assisted in
the search process. The Committee conducted a review of its
appointment process during the year and confirmed its continued
appropriateness.
Succession planning for the Board
Our approach to succession planning seeks to ensure that Board
retirements are planned for and occur in a coordinated manner and
that the Board has an appropriate mix of skills and experience. This
mitigates risks to the Company’s strategic objectives by avoiding
gaps in key skills or a lack of continuity. The Committee believes that
length of service will not necessarily compromise the independence
or contribution of the Company’s Directors. The Nominations
Committee evaluates the appropriate balance between the retention
of the corporate memory of the Company (including detailed
knowledge of portfolio companies in which it has been invested for
many years), with maintaining a suitable rate of refreshment at any
given point in time.
The Board and Nominations Committee have carefully considered
the question of Chair tenure as detailed on page 100. In my absence
the Nominations Committee, chaired by the Senior Independent
Director, reviewed my tenure as Chair in March 2025. Further details
are set out in the Report from the Senior Independent Director on
this page and in the Corporate Governance statement on page 100.
The Board also recognises that in providing leadership, governance,
challenge and support it must, when considering the Chair tenure,
take account of matters including: the importance of Director
independence; the need to periodically refresh the Board and its
leadership; knowledge and understanding of the Company’s
investment business and its strategic objectives; as well as diversity,
continuity and retention of corporate memory. We believe that
an appropriate balance of all these factors is essential both for
the effective functioning of the Board and the delivery of the Board’s
purpose. At times, this may result in some longer-serving Directors,
including the Chair.
Report from the Senior Independent
Director on the Committee’s annual
review of Chair’s tenure
David Hutchison, who was appointed as Chair of the Board
in November 2021, has now served as a Director for more
than eleven years. This does not comply with the provisions
of the UK Corporate Governance Code (“the Code”) and
a full explanation of the background to David’s appointment
as Chair and why the Nominations Committee and the
Board believe it appropriate for the Chair to continue in
office is therefore set out on page 100.
The Board and Nominations Committee are aware of the risks
to good corporate governance which could follow from
excessive Chair tenure. As one of the measures adopted
to mitigate this risk the Nominations Committee decided
that it would review annually the continued appropriateness
of the Chair’s appointment. This review is led by the Senior
Independent Director and takes place in the absence
of the Chair.
The first such annual review, led by me, took place in March
2023 and the most recent review was conducted in March
2025. The Nominations Committee discussed the reasoning
behind the provisions of the Code limiting Chair tenure,
reviewed the circumstances of David Hutchison’s
appointment as Chair and reviewed his performance in this
role over the past year. This review was conducted in parallel
with the annual Chair evaluation which acts as a further
mitigant to the risks associated with tenure beyond nine years.
At the 2024 AGM, over 91% of shareholders who voted at the
AGM voted in favour of David Hutchison’s continued
appointment. To date, shareholders have not expressed any
significant concerns to the Company relating to David’s
continued appointment.
This year’s review concluded that David continued to
perform effectively as Chair, continued to exercise objective
judgement and continued to appropriately promote
constructive challenge amongst Board members. The
Committee noted the very favourable results from the Chair
evaluation review, in particular the exceptional support David
provides to his 3i and Board colleagues and the fact that he
strikes the right balance in terms of leading the Board in a
collegiate manner and also respecting the stewardship of the
strategy and portfolio by executive management.
The Nominations Committee also noted that in the context
of a company where long-term knowledge of the business
and its portfolio companies was of great importance, David’s
continued appointment was all the more appropriate. The
Committee concluded unanimously that David’s continued
appointment for the coming year was in the best interests
of the Company.
Lesley Knox
Senior Independent Director
14 May 2025
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Diversity and inclusion
The Board strongly supports the principle of boardroom diversity.
The Board’s aim is to appoint Directors on merit so as to have a
Board who have an appropriate mix of skills, experience and
knowledge which is diverse in terms of gender, social and ethnic
backgrounds, as well as cognitive and personal strengths. When we
engage external consultancies to assist with Director appointments,
they are instructed to put forward a diverse range of candidates for
consideration from which the Board can make appointments on merit
and against objective criteria.
The Board currently comprises ten Directors, of whom four are
women. This meets the 40% female gender diversity target set by
the FTSE Women Leaders review. The Board also meets the Parker
Review recommendation of having at least one Director from a
minority ethnic group.
During the year, the Committee reviewed the Company’s Equal
Opportunities and Diversity policy and decided that no changes to
the policy were required at this time. The Committee also reviewed
the Company’s diversity, equity and inclusion activities during the
year and considered how the Company’s Equal Opportunities and
Diversity policy had been implemented. Further details are set out in
the Sustainability report on pages 52 to 55.
The Committee reviews and monitors initiatives aimed at developing
a diverse pipeline of talent within the Company below Board level
through the succession planning process referred to above and the
appointments process. When hiring, we seek to recruit on merit from
a diverse pool of candidates.
Despite our approach the challenge nonetheless remains that there
is a limited size talent pool, particularly at senior levels, within an
extremely competitive market.
The gender balance of our employees and our senior managers
is reported in more detail in the Sustainability section on page 53.
At 31 March 2025, our employees were 60.5% male and 39.5%
female. The under-representation of women in senior management
and investment roles at 3i is an issue we share with much of the
private equity and alternative asset investment sector. Nonetheless,
3i continues to focus on increasing the number of women in these
roles, whilst recognising that significant change will take time to
achieve. As at 31 March 2025, 20% of Executive Committee plus their
direct reports who were senior managers were female. (For further
information and details on how this figure is calculated see page 53).
Details of progress and action on ethnic diversity are contained in the
Sustainability report on page 54.
The Company participates in a number of diversity, equity and
inclusion initiatives, details of which are contained in the Sustainability
report on pages 53 and 54.
Diversity of individuals on the Company’s Board and in executive management
In accordance with LR 6.6.6 R (9) of the FCA Listing Rules, the Board confirms that, as at 31 March 2025, the Company met the targets
set out in that rule in that at least 40% of the Board were women, that at least one of the specified senior positions on the Board
(the Chair, the Chief Executive, the Senior Independent Director or the Chief Financial Officer) was held by a woman and that at least
one Director was from a minority ethnic background. There have been no changes to the Board since 31 March 2025 that would
affect the Company’s ability to meet these targets.
In accordance with LR 6.6.6 R (10) of the FCA Listing Rules, the following tables set out data, as at 31 March 2025, on the ethnic
background and the gender identity or sex of the individuals on the Company’s Board and in its executive management.
Number
of Board
members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number
in executive
management
Percentage
of executive
management
Gender identity or sex
Men
6
60%
3
8
89 %
Women
4
40%
1
1
11 %
yNot specified/prefer not to say
–
–
–
–
–
Ethnic background
White British or other white (including minority-white groups)
8
80%
4
6
67 %
Mixed/Multiple ethnic groups
–
–
–
–
–
Asian/Asian British
2
20%
–
1
11 %
Black/African/Caribbean/Black British
–
–
–
–
–
Other ethnic group including Arab
–
–
–
–
–
yNot specified/prefer not to say
–
–
–
2
22 %
The tables above include data for three individuals who are included in both the Board and executive management. The Company’s approach to collecting the data used for the purposes of the above disclosures was
to use data on gender or sex from our employee records and to ask the individuals which ethnic background was applicable to them together with permission to use it for this purpose, save where individuals were
located in non-UK jurisdictions where we believe it would be inappropriate or unlawful to make such a request.
Governance
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Composition of the Board
at 14 May 2025
Tenure
l 20% >9 years
l 20% 6-9 years
l 50% 3-6 years
l 0% 1-3 years
l 10% 0-1 years
Ethnicity
l 20% Ethnically
diverse
l 80% Not
ethnically diverse
Gender diversity
l 40% Women
l 60% Men
Directors’ skills, experience and knowledge
The Directors have a range of core skills, experience and knowledge
which enable them to effectively support and appropriately challenge
management on the delivery of 3i’s strategy. These skills include the
following:
• Audit and finance
• Financial services and global markets
• Investment trusts and asset management
• Retail/Consumer/Commercial
• Remuneration
• Sustainability
• Digital
• UK plc governance
• Prior experience as Chief Executive/Chief Financial Officer/Chief
Investment Officer
Training and advice
The Company has a training policy which provides a framework within
which training for Directors is planned with the objective of ensuring
Directors understand the duties and responsibilities of being
a director of a listed company and are updated on developments
that particularly impact 3i. All Directors are required to keep
their skills up to date and maintain their familiarity with the Company
and its business.
On appointment, all non-executive Directors participate in an
extensive induction programme. They have discussions with the Chair
and the Chief Executive. This is followed by briefings on: strategy;
finance; Private Equity and Infrastructure including portfolio assets;
external funds and co-investment and legacy funds; HR,
remuneration and carry schemes; and legal, regulatory and
compliance matters including the responsibilities of Directors. The
Company provides opportunities for non-executive Directors to
obtain a thorough understanding of the Company’s business by
meeting members of the senior management team who in turn
arrange, as required, visits to investment or support teams.
In the year, Directors received presentations on Generative AI and
the economic outlook, in addition to presentations given by the
CEOs and Private Equity investment teams of a number of portfolio
companies. They also received, during the course of Board and
Committee meetings, updates on developments in relation to
regulatory matters, sustainability, risk, financial and other reporting
requirements and the UK and global tax environment. Directors have
the opportunity to suggest additional subjects for presentations
where they believe it would be helpful. All non-executive Directors
have the opportunity to access the Company’s compliance e-training
modules which are used to train the Company’s employees on
regulatory compliance matters.
The Company has procedures for Directors to take independent
legal or other professional advice in relation to the performance
of their duties. In addition, Directors have access to the advice
and services of the Company Secretary, who advises the Board,
through the Chair, on governance matters.
Governance
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Activities in the year
Board and senior
management
succession
Size, balance and composition of the Board,
and non-executive Director appointments
The Committee has continued to keep Board succession plans as
well as the size, balance and composition of the Board under review.
During the year, one appointment of a new non-executive Director
was made. The Board now comprises ten Directors, being the Chair,
three executive Directors and six independent non-executive
Directors.
The Committee remains of the view that a
nine or 10 member Board is an appropriate
size of Board for the Company and that the
Board has the right balance of skills and
experience.
Contingency Executive Director succession plan
The Committee reviewed its short-term contingency succession plans
for scenarios where any of the executive Directors was unexpectedly
unable to carry out their duties.
The Committee noted the existing
contingency arrangements for
circumstances where any of the executive
Directors suddenly became unable to carry
out their duties. No changes to these
arrangements were recommended.
Senior management succession plans
In relation to succession planning below Board level, and as part of
the Board’s work to support the development of a diverse pipeline of
talent, the Committee and the Board considered and discussed the
2024 Group Succession Planning and Strategic Capability Review,
which was presented to the Directors by the Chief Human Resources
Officer and other relevant Executive Committee members. This
annual review identifies development and succession plans for key
staff, including all members of the Executive Committee and their
direct reports, with details of short-term contingency arrangements
in case of a sudden vacancy, planned successors and identification
of those who, with further experience, could be potential longer-term
successors.
The Board and the Committee were able
to satisfy themselves as to the
appropriateness of the succession planning
process in place for senior positions within
the Group.
Board
performance
review
Details on how the annual Board performance review process was
conducted and areas covered are on pages 114 and 115. The
evaluation process for the year was externally facilitated by Lintstock
Limited.
The Committee reviewed the evaluation process which had been
followed in the year with a view to identifying whether any changes
or improvements should be made for future years.
Details on the actions taken in response to
the 2024 review and details of the outcome
of the 2025 review are set out on pages 114
and 115.
Review of
Chair tenure
The Committee keeps the continued tenure of the Chair under
regular review. This process is led by the Senior Independent
Director and is particularly important given that the Chair has served
as a Director for in excess of nine years.
Details of the review are set out on page
117 in the report from the Senior
Independent Director. The Committee
concluded that the Chair’s continued
appointment for the coming year was in
the best interests of the Company.
What was discussed
What the Committee did
Outcome
David Hutchison
Chair, Nominations Committee
14 May 2025
Governance
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I am pleased to present the Audit
and Compliance Committee report
for the year ended 31 March 2025.
My report explains the
Committee’s work this year.
What the Committee reviewed in FY2025
• Financial and non-financial reporting
• External audit
• Internal control, compliance and risk
management
• Risk review
Committee membership
Meetings
Stephen Daintith (Chair)
6(6)
Coline McConville
6(6)
Alexandra Schaapveld
6(6)
Hemant Patel1
1(1)
1
Mr Patel joined the Board on 3 February 2025.
The column above headed “Meetings” shows the number of meetings of the Committee
attended by each member during the year, together with, in parentheses, the number
of meetings they were entitled to attend. Other regular attendees at the Committee
meetings include the following: the Chair; Chief Executive; Group Finance Director; Chief
Operating Officer; Company Secretary; Director of Group Reporting and Valuations;
Head of Internal Audit; Head of Group Compliance; and the External auditor, KPMG LLP.
Dear Shareholder
We held six regular scheduled meetings this year, four of
which were coordinated with 3i’s external reporting timetable.
During the year, the Committee focused time on the Group’s
technology roadmap which encompasses our IT strategy, cyber
security, key system implementations, data strategy and architecture
and emerging technologies including artificial intelligence.
Management have successfully implemented a new treasury
management system and HR system in FY2025, and are progressing
well with a new ERP system. The Committee was also updated on the
AI initiatives across the Group and our portfolio companies.
In anticipation of the new requirements under provision 29,
applicable to financial years beginning on or after 1 January 2026, the
Committee considered management’s identification of key material
controls across financial and non-financial reporting operations and
were satisfied that the Group’s operations remain well controlled and
the Group is well positioned to satisfy the new rules and reporting
requirements under provision 29. An integral part of our control
environment is the work our Internal Audit function conduct, and
during the year, we oversaw the successful selection and transition
of a new head of Internal Audit.
The Audit Quality Review team (AQRt) of the FRC performed a review
of KPMG’s audit of the Group’s FY2024 financial statements. The
Committee reviewed and discussed the report with KPMG.
In advance of each Committee meeting, I met with the Group
Finance Director, the Chief Operating Officer and the Heads
of Compliance and Internal Audit to discuss their reports as well as
any relevant issues. I also met privately with KPMG as part of my
ongoing review of their effectiveness and, periodically, with other
members of the 3i senior management team. I continue to have
regular discussions and planning meetings with management and
KPMG on delivering an effective audit.
The rest of the report sets out in detail the Committee’s activities
in the year. It is structured as follows:
• Governance
• Report on the year
• Areas of accounting judgement and control focus
• Risk management and internal control effectiveness
• Internal audit
• External audit
I look forward to engaging with you on the work of the Committee.
Stephen Daintith
Chair, Audit and Compliance Committee
14 May 2025
Audit and Compliance committee’s terms of reference
www.3i.com/investor-relations/governance/principal-board-committees
Governance
Audit, risk and control
Audit and Compliance
Committee report
3i Group plc | Annual report and accounts 2025
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Stephen Daintith
Committee Chair
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What the Committee reviewed in FY2025
Financial and non-financial reporting
• Annual and half-year reports and quarterly performance
updates
• Key accounting judgements and estimates
• Update on the relevant thematic reviews from the FRC
• Reviewed the Annual report to ensure that it is fair,
balanced and understandable, including APMs
• Going concern, Viability and Resilience statement
• Sustainability disclosure enhancements including TCFD
reporting and science-based targets
External audit
• Confirmation of the external auditor independence
• Policy and approval for non-audit fees
• FY2025 audit plan, including significant audit risk (being
the valuation of the unquoted investment portfolio)
• Audit results report, including the results
from testing Key Audit Matters
• External auditor performance and effectiveness
Internal control, compliance
and risk management
• Review of 3i’s system of risk management and internal
control, including overseeing implementation of a new
financial reporting key internal controls system, replacing
the existing system
• Internal audit reports assessing internal control, processes,
fraud and matters relevant to financial reporting
• Review of the Viability statement and the supporting
stress test scenarios
• Update on cyber security and penetration tests
• Business resilience including IT and disaster recovery
• Annual staff verification exercise
• Audit and Assurance policy
Risk review
• Valuation reports and recommending the investment
portfolio valuation to the Board
• Review of investment themes from portfolio company
review process and portfolio performance including
sustainability issues and risks
• Regular reviews of compliance with regulatory rules and
compliance monitoring findings
• Annual tax update and reports on tax policy and strategy
• Reports from the Group Risk Committee (“GRC”) and the
risk log
• Update on litigation matters
Governance
All members of the Committee are independent non-executive
Directors. The Board believes members have the necessary range
of financial, risk, control and commercial experience required to
provide effective challenge to management. In particular, the Board
is satisfied that Stephen Daintith has recent and relevant financial
experience as outlined in the Code and the Committee as a whole
has competence relevant to the sector in which it operates.
The attendance of members at meetings is shown in the table
on page 121.
The Committee meets privately for part of its meetings and also has
regular private meetings with the External auditor, the Group Finance
Director, the Chief Operating Officer, the Head of Internal Audit
and the Head of Compliance in the absence of other members
of the management team.
Report on the year
The review work of the Committee in the past year is summarised
in the table on this page. This work included the assessment and
evaluation of the areas of significant accounting judgement, and
monitoring the effectiveness of 3i’s risk management framework
as described in more detail later in this section. In addition, the
Committee focused on a number of topics, which are set out below.
Taxation
The Committee received an annual update from the Group Tax
Director on the Group’s taxation status which covered liaison with
fiscal authorities in the UK and other jurisdictions, relevant external
developments, and material tax projects.
Cyber security and IT
The Committee also received an annual update on cyber security
and key IT projects. There were no serious cyber incidents reported
in the year and the Committee noted the work undertaken to: further
improve 3i’s cyber security maturity and detective and protective
controls; enhance business operational resilience and manage third
party IT supplier risk; and maintain staff training and awareness on
cyber security risks. The update on IT projects covered resilience and
continuity planning, and monitoring progress on key system projects,
including the replacement of the Treasury Management and HR
systems completed during the year, and of the ERP system, currently
underway.
Going concern and viability
The Directors are required to make a statement in the Annual report
and accounts as to 3i’s viability. The Committee provides advice to
the Board on the form and content of the statement, including the
underlying assumptions. In advance of the year-end the Committee
reviewed the Group’s proposed stress test scenarios to support the
going concern basis and Viability statement. At the year end, the
Committee evaluated a report from management setting out its view
of 3i’s viability and content of the proposed Viability statement.
Governance
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This report was based on the Group’s strategic plan and covered
forecasts for investments and realisations, liquidity and gearing,
including forecast outcomes of the stress tests and forecast capital
and liquidity performance against an assessment of the Group’s risk
profile. It incorporated the 31 March 2025 valuations
and consideration of a range of economic outcomes. The Committee
discussed whether the choice of the three-year period remained
appropriate and concluded that it remained the most appropriate
period and provided more certainty on the Group’s performance due
to the nature of the Group’s business and its risk appetite to invest
in Private Equity and Infrastructure investments for a period of four
to six years, whilst acknowledging the reduced reliability of
assumptions in the later period of the plan. See our Resilience
statement on page 127 for further details.
The Directors believe the Group has sufficient financial resources
and liquidity, is well placed to manage business risks in the current
economic environment, and can continue operations for a period
of at least 12 months from the date of issue of these financial
statements. The Directors have also considered key dependencies
set out within the Risk management section including investment
and operational requirements.
Taking into account the assessment of the Group’s stress testing
results and its risk appetite statement on page 80, the Committee
agreed to recommend the Viability statement and three-year viability
period which was subsequently approved by the Board.
Audit and Assurance policy
Our Audit and Assurance policy was considered by the Committee
as part of its review of the effectiveness of 3i’s risk management and
internal control system; in particular, in its assessment of the scope
and adequacy of audit and assurance activities.
Areas of accounting judgement and control focus
The Committee pays particular attention to matters it considers
to be important by virtue of their complexity, level of judgement
and potential impact on the financial statements and wider business
model. Significant areas of focus considered by the Committee are
detailed on the next page, alongside the actions taken by the
Committee (with appropriate challenge from the External auditor)
to address them.
Governance
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Areas of accounting judgement and control focus
Valuation of the
proprietary capital
investment portfolio
Area of significant attention
The most material area of judgement
and estimation in the financial statements,
and noted as a significant risk and Key Audit
Matter by the External auditor, relates to
the valuation of the unquoted investment
portfolio, which, at 31 March 2025, was
£24,663 million, or 93% of gross assets,
under the Investment basis.
In recognition of the importance of this
area, the Board has a Valuations Committee
to review the valuations policy, process
and application to individual investments.
The Valuations Committee provides
quarterly oral reports to the Audit and
Compliance Committee and the Board,
supported by the relevant minutes of the
Valuations Committee.
What the Committee reviewed and concluded
On behalf of the Board, the Committee received
and evaluated quarterly reports from the Chair of the
Valuations Committee and the External auditor, with
particular focus on the assumptions supporting the
valuation of unquoted asset investments, any
valuation uncertainties and the proposed disclosures
in the financial statements. Members of the
Committee also attend the Valuations Committee
meetings.
The detail on the key valuation considerations
and the review and challenge undertaken in the year
is included in the Valuations Committee report
on pages 130 to 134.
The Committee also reviewed and concluded that
no fair value adjustment should be made to the
investment entity subsidiaries’ NAVs and judgement
for control is appropriate for those investees and
funds consolidated within the Group.
Fair, balanced and
understandable and the
presentation of 3i’s
reports and accounts
Area of significant attention
Under the Code, the Board should establish
arrangements to ensure the Annual report
presents a fair, balanced and
understandable assessment of the
Group’s position and prospects.
The Group prepares the non-GAAP
Investment basis financial statements
to provide a disaggregated view of the
underlying portfolio alongside the IFRS
basis to aid in the understanding of the
results and performance of the underlying
portfolio.
What the Committee reviewed and concluded
The Committee reviewed the half-yearly and annual
financial statements as well as the quarterly
performance updates with management, focusing
on the integrity and clarity of disclosures and
enabling the Board to provide the fair, balanced
and understandable confirmation to shareholders
in the Annual report and accounts 2025.
A report summarising the considerations for the
Annual report and accounts 2025 was reviewed
by the Committee in advance of the year-end and
a summary of the detailed procedures undertaken
was prepared alongside the Annual report and
accounts 2025.
Governance
Audit, risk and control continued
Audit and Compliance Committee report continued
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Internal audit
The Committee continued to monitor the scope, activity,
and resources of the Group’s Internal Audit function, including
approving the internal audit plan and assessing whether its operating
model remained effective and in line with relevant professional
standards. The Committee receives quarterly updates on internal
audit activity, including the results of reviews of 3i’s investment offices
and professional services teams; updates on outstanding agreed
actions from previous reports; and any changes to the audit plan in
response to business developments or new areas of higher risk.
In the absence of an external quality assessment in FY2025, the
Committee also received an effectiveness self-assessment from
the Head of Internal Audit which is designed to assist the Committee
in its monitoring of the function.
Based on reports and other evidence seen, and meetings held over
the course of the year, the Committee concluded that the Internal
Audit function remained effective.
External audit
The Committee has responsibility for making recommendations
to the Board on the appointment of the External auditor,
determining its independence from the Group and its management
and agreeing the scope and fee for the audit.
Jonathan Mills, who has served as the lead audit partner since his
appointment in 2021, is currently completing his fifth audit in this role.
In line with rotational requirements, a new lead audit partner has
been appointed for FY2026. Accordingly, the Committee has
endorsed the appointment of Fang Fang Zhou as Jonathan Mills’
successor.
Auditor independence
The Group has a policy for setting out what non-audit services can be
purchased from the firm appointed as External auditor or a member
of the firm’s network. The aim of the policy is to support and
safeguard the objectivity and independence of the External auditor
and to comply with the FRC’s Ethical Standards for auditors. It also
ensures that where fees for approved non-audit services are greater
than a pre-determined limit, they are subject to the Committee
Chair’s prior approval.
The policy permits certain non-audit services to be procured,
following approval, when the Committee continues to see benefits
for the Group in engaging KPMG. Examples of this include work:
• that is closely related to the external audit as described in para 5.36
of the FRC’s Ethical Standards;
• where a detailed understanding of the Group is required; and
• where KPMG is able to provide a higher quality and/or better
value service than other potential providers.
The key principle of our policy is that permission to engage
the External auditor will always be refused when a threat to
independence and/or objectivity is present or perceived or without
any proper safeguards in place. In line with the FRC’s Ethical
Standards, 3i will not generally use KPMG for any non-audit services
(unless explicitly permitted) that are not closely related to KPMG’s
role as 3i’s External auditor. This includes tax and legal, consulting
and investment-related services such as due diligence.
All proposals for services with KPMG must be forwarded to the Chief
Operating Officer in the first instance and will require approval by the
Chair of the Audit and Compliance Committee above a defined limit
and provided the work is not closely related to KPMG’s role as 3i’s
External auditor. Examples of services that require additional
approval include:
• the fee exceeds £100,000; or
• the service is work other than services closely related to KPMG’s
role as 3i’s External auditor.
Smaller engagements with fees of less than £100,000 and services
that are explicitly permitted and are not considered closely related
to the audit are approved by the Chief Operating Officer on behalf
of the Committee.
KPMG has reviewed its own independence in line with these criteria
and its own ethical guideline standards. This includes the review of
due diligence processes undertaken within the Group’s investment
activities. KPMG has confirmed to the Committee that following its
review it is satisfied that it has acted in accordance with relevant
regulatory and professional requirements.
Audit and non-audit fees
The total audit fee for the year was £2.9 million (2024: £3.1 million).
Non-audit fees paid to the External auditor were £0.4 million
(2024: £0.4 million). Non-audit service fees represent 14% of the audit
fee and remain well within the cap of 70% of the average audit fee
over the previous three years. The Committee concluded that these
fees fell within its criteria for engaging KPMG and do not believe they
pose a threat to the External auditor’s independence or objectivity.
Assessing external audit effectiveness
The Committee reviews the effectiveness of KPMG through the
use of questionnaires completed by management, by considering
the extent of its contribution at Committee meetings throughout
the course of the year, and in one-to-one meetings.
The FY2025 evaluation also reviewed the quality of the audit process,
the use of KPMG’s valuation specialists to support the audit of the
portfolio valuations and the technical knowledge of the team.
The Committee concluded that the audit was effective and that
there should be a resolution to shareholders to recommend the
re-appointment of KPMG LLP at the 2025 AGM.
Risk management and internal control framework
The Committee is responsible, on behalf of the Board, for
overseeing the effectiveness of the Group’s risk management
and internal control system. The overall framework is reviewed by the
Committee in accordance with the Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting issued
by the FRC.
The GRC, Executive Committee and senior managers are required to
provide the Committee with regular updates on a range of topics to
enable the Committee to form a view on the Group’s principal risks,
risk mitigation plans and any significant new risks, themes or
developments.
Governance
Audit, risk and control continued
Audit and Compliance Committee report continued
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The GRC provides an update on the assessment of the Group’s
principal risks and new and emerging risks, together with details
of how these are being managed or mitigated in the context of the
Group’s strategic objectives and risk appetite. The reports also
include updates on key sustainability risks and developments, both in
relation to the Group and the investment portfolio. Further details
can be found in the Risk management section on pages 80 to 93.
The Committee receives a range of reports and information on the
operation of the Group’s system of internal control, including controls
over financial reporting. The Group’s external reporting is subject to
a well-established input, review and verification process, which the
Committee is briefed and consulted on.
Details of what the Committee reviewed can be found in the tables
on pages 122 and 124. A summary of the key control framework is set
out below.
Review of effectiveness
For monitoring and reporting purposes, a significant control
failure or weakness is defined as one resulting in or with potential
to result in a material misstatement in the financial statements or loss
to the business, or significant reputational damage, penalties or
sanctions.
Both the External and Internal Auditors provide the Committee with
details of their respective reporting frameworks, including materiality
limits and risk ratings. This is to ensure there is an understanding of
how the definitions are applied in evaluating the nature and severity
of any risk or internal control findings and the appropriateness
of remedial action plans.
The Committee’s review of the risk management and internal control
system takes into account the various updates and reports outlined in
this section. In addition, the Committee receives an annual risk and
internal control effectiveness review from Internal Audit and an end-
of-audit report from the External auditor. The Executive Committee,
supported by their direct reports, is also required to sign-off an
annual control attestation, the results of which are reported by
Internal Audit. The Committee also reviews the Group’s anti-fraud
programme and use of the whistle blowing facility.
The Committee performed its annual review of the system’s
effectiveness and reported its conclusions to the Board. The Board
noted that the system has been in place for the year under review
and up to the date of approval of this Annual report and accounts
2025, and that there had been no significant control failings or
weaknesses which required remedial action.
Summary of key control framework
Investment process
Investment portfolio companies
Investment portfolio management
• Due diligence process
• Investment procedures
• Investment Committee review and approval
• Sustainability assessment
• Responsible Investment policy
• 3i Board representatives
• Active management of senior appointments
• Minimum sustainability requirements
• Procedures for portfolio management
• Monthly portfolio company dashboards
and performance monitoring
• Six-monthly investment and portfolio
company reviews, including reporting against
sustainability requirements
Viability and going concern
Valuations process
Financial reporting
• Stress testing methodology and modelling
• Analysis of assets and liabilities
• Capital adequacy review process
• Group strategy and liquidity forecasting
models
• Approved Valuations policy
• Investment and portfolio company review
processes
• Central oversight by the Valuations team,
Investment Committee and Valuations
Committee
• Framework of key financial controls
and reconciliations
• Portfolio, fund and partnership accounting
processes
• Documented analyses of complex
transactions and changes in accounting
requirements and disclosures
• Operating expense budget
People and culture
Advisory relationships
Third-party service suppliers
• Values framework and HR policies
• Performance management framework
• Remuneration policies
• Conduct and compliance policies
and monitoring
• Succession planning process
• Pre-approved suppliers of investment
due diligence services
• Tendering and approval process
for other advisers, eg legal, tax
• Monitoring of performance and patronage
• Confidentiality and conflicts management
• Use of 3i’s Supplier Relationship Management
tool
• Required contractual protections, eg data
security and business continuity
• Oversight and governance frameworks
for critical suppliers
• Independent service organisation reports
Balance sheet management
Change management
IT systems and security
• Treasury policy and control framework
• Liquidity monitoring framework
• Fund transfer and release controls
• Portfolio concentration and vintage control
monitoring framework
• FX hedging programmes
• Approval process for changes to corporate
structure or new products/business areas
• Ongoing monitoring of legal and regulatory
changes
• Active participation and engagement with
government, regulators and trade bodies
• Business systems project governance and
oversight
• IT governance and policy framework
• Access and data security controls
• Back-up and disaster recovery procedures
and testing
• IT and cyber security monitoring and control
framework, and regular penetration tests
• Staff cyber security awareness training
Governance
Audit, risk and control continued
Audit and Compliance Committee report continued
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Resilience statement
Our resilience is dependent on the success
of our investment strategy, careful management
of our balance sheet and costs, and the ability
to attract and retain a capable and diverse team.
This is underpinned by a strong institutional culture
and values, robust corporate governance, and
effective risk and operational management.
Our resilience assessment draws upon a number of interdependent
components, illustrated below. Further information can be found
in the sections on the Group’s business strategy (pages 12 to 17),
Approach to risk management (pages 80 to 93) and Sustainability
(pages 39 to 68).
Resilience
assessment
People
Portfolio
Net asset value
Liquidity
Sustainability approach
Stress test scenarios
• Economic downturn
• Underperformance of Action
• Combined scenario with
widespread economic turmoil
and concentration risk
• Impact of a significant event
• Climate change
Principal risks analysis
Long-term risks
and opportunities
3i business model
Investment Committee
Investment strategy and
Responsible Investment policy
Megatrends/investment themes
Demographic and social change
Value-for-money and discount
Digitalisation, digital transformation
and big data
Energy transition, energy security
and resource scarcity
Strategy and risk
assessment
Strategic objectives
and Key performance
indicators
Short to medium-term
risk assessment
• External environment
• Investment outcomes
• Operational
Longer-term
risk assessment
• Climate/environmental
• Geopolitical
• Societal and demographic
• Technological
• Economic
Governance
Audit, risk and control continued
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Short-term resilience
In assessing our short-term resilience, we undertake regular portfolio
monitoring, including six-monthly strategic portfolio company
reviews and monthly trading updates for each portfolio company.
These reviews highlight and appraise sources of risk at a portfolio
company level and feed into the quarterly valuation process.
Regular portfolio updates are provided to the Board and Audit
and Compliance Committee.
We also carry out periodic assessments of the Group’s operational
resilience, including key people risks, IT systems and security
infrastructure, and critical third-party suppliers.
Active management of liquidity underpins our short-term resilience,
which is supported by the ready availability of short-term funding
and a conservative balance sheet policy that ensures a low level
of structural gearing at the holding company level.
The identification of material uncertainties, that could cast significant
doubt over the ability of the Group to continue as a going concern,
forms the basis of the Directors’ Going concern statement below.
Going concern statement
Going concern is assessed for a period of at least 12 months
from the date of approval of the Annual report and accounts.
The Directors are required to evaluate whether the Group has
adequate resources to continue in operational existence for at
least the next 12 months. The Directors have made an assessment
of going concern, taking into account both the Group’s current
performance and outlook using the information available up
to the date of issue of these financial statements.
In carrying out their assessment of going concern and short-term
resilience, the Directors considered a wide range of information,
including:
• details of the Group’s strategy, risk appetite, and business
and operating models;
• information on the Group’s principal risks and mitigation plans;
• a summary of the financial position considering performance; and
• current market volatility and geopolitical and economic
uncertainties.
The Group monitors its funding position and its liquidity risk
throughout the year to ensure it has access to sufficient funds
to meet forecast cash requirements.
At 31 March 2025, the Group remained well funded with liquidity
of £1,323 million (31 March 2024: £1,296 million). Liquidity comprised
cash and deposits of £423 million (31 March 2024: £396 million)
and undrawn RCF of £900 million (31 March 2024: £900 million).
The Group monitors its liquidity regularly, ensuring it is adequate
and sufficient. This is underpinned by the monitoring of investments,
realisations, foreign exchange hedging (including the liquidity impact
of the Group hedging programme), operating expenses and receipt
of portfolio cash income.
Liquidity is also central to the Group’s dividend policy to maintain
or grow the dividend year-on-year. This policy is subject to
maintaining a conservative balance sheet approach and is therefore
informed by the outlook for investment and realisation levels.
Allowing the Group to exercise discretion over the level of dividends
paid ensures that the Directors can recommend a sustainable
dividend which takes into account the need to maintain liquidity
for new investment and operating expenses.
The Directors have acknowledged their responsibilities in relation
to the financial statements for the year to 31 March 2025. After
making the assessment on going concern and short-term resilience,
the Directors considered it appropriate to prepare the financial
statements of the Company and the Group on a going concern basis.
The Group has sufficient financial resources and liquidity and is well
positioned to manage business risks in the current economic
environment and can continue operations for a period of at least
12 months from the date of this report. The Directors have concluded
that there are no material uncertainties or risks that could cast
significant doubt over the short-term resilience of the Group
or its ability to continue as a going concern over the duration
of that period based on investment and operational requirements.
Medium-term resilience
The assessment of medium-term resilience, which includes
the modelling of stress tests and reverse stress tests, considers
the viability and performance of the Group in the event of specific
stressed scenarios which are assumed to occur over a five-year
horizon in line with the Group’s strategic planning process.
The stress testing focuses upon the principal risks, but also
considers those new and emerging risks which are considered to be
of sufficient importance to require active monitoring by the GRC;
these include, for example, the risk of underperformance in specific
assets in the portfolio and the impact of climate change. The
medium-term resilience of the Group is examined through analysing
the impact of these scenarios on key metrics such as net asset value
and liquidity.
In each stress test scenario, the Group remains viable. The medium-
term resilience of 3i is further supported by the availability of
controllable management actions that can mitigate the impact
of certain stress events. These actions include, for example,
the flexing of investment and dividend levels for liquidity purposes.
Viability statement
The stress testing as detailed above forms the basis of the Viability
statement. 3i conducts its strategic planning over a five-year period;
the Viability statement is based on the first three years, which reflects
our long-term hold investments in Action and Royal Sanders, and the
Group’s risk appetite to invest in Private Equity and Infrastructure
investments for a period of four to six years and, therefore, provides
more certainty over the forecasting assumptions used. The Directors
assess 3i’s viability and medium-term resilience over a three-year
period from the date that the Annual report and accounts is
approved. 3i’s strategic plan and associated principal risks, as set out
on pages 85 to 93, are the foundation of the Directors’ assessment.
The assessment is overseen by the Chief Operating Officer and Group
Finance Director and is subject to challenge by the GRC, review by the
Audit and Compliance Committee and approval by the Board.
Governance
Audit, risk and control continued
Resilience statement continued
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The Group’s strategic plan projects the performance, net asset value
and liquidity of 3i over a five-year period and is presented at the
Directors’ annual strategy meeting in December and updated during
the year as appropriate. At the strategy meeting, the Directors
consider the strategy and opportunities for, and threats to, our long-
term hold assets, Private Equity and Infrastructure and the Group
as a whole. The outcome of those discussions is included in the next
iteration of the strategic plan which is then used to support the
assessment of viability and medium-term resilience. The current
iteration of the strategic plan reflects the current macro-economic
headwinds and geopolitical uncertainty.
The Group’s viability testing considers multiple severe, yet plausible,
individual and combined stress scenarios. These scenarios include a
range of estimated impacts, primarily based on providing additional
support to portfolio companies as a result of a downturn and
delaying the Group’s ability to realise and make new investments.
A key judgement applied is the extent of the impact of certain market
and economic developments, including the outlook on interest rates,
inflation and economic growth. The scenarios tested are as follows:
• widespread economic turmoil – considers the impact of
a recession, triggered by persistent inflation, a marked slowdown in
global economic growth, and weak consumer demand;
• underperformance of Action – considers the impact if 3i’s largest
asset, Action, was to suffer an extreme downturn in performance;
• combined scenario with widespread economic turmoil and
concentration risk – considers both scenarios occurring at the
same time;
• impact of a significant event – considers the impact of a loss in
value of certain portfolio companies following a material event
such as significant operational underperformance, covenant
breaches, fraud, a cyber security breach or other sustainability
issues; and
• climate change – considers the impact of climate change on
3i’s portfolio, driven by changes in consumer behaviour,
regulations, and other physical and business risks.
The assessment projects the amount of capital the Group needs
in the business to cover its risks, including financial and operational
risks, under such stress scenarios. The results of each of the stress test
scenarios indicate that the Group is able to meet its obligations as
they fall due for the viability period over three years from the date
of approval of these financial statements by, in certain cases, making
use of controllable management actions. In all these scenarios the
Directors expect the Group to be able to absorb the impact on NAV,
whilst the liquidity and solvency of the Group is protected.
Mitigating actions within management control include reducing new
investment levels, dividend levels and drawing on the existing RCF.
The analysis shows that, while there may be a significant impact on
the Group’s reported performance in the short term under a number
of these scenarios, the resilience and quality of the balance sheet is
such that solvency is maintained, and the business remains viable.
As part of the assessment of viability and medium-term resilience,
the Group also undertakes reverse stress testing to identify the
circumstances under which the Group’s business model would no
longer remain viable. These circumstances include a prolonged delay
in the projected realisation date of investments, at the same time as
continued investment by the Group at a level not supported by the
liquidity forecast. In the absence of any mitigating management
actions, these reverse stress tests determine the point at which the
Group would lack the liquidity to remain viable. Overall, the reverse
stress tests are sufficiently improbable as to provide a low risk
of impact to the Group’s viability and medium-term resilience.
In practice, in the event of a market downturn and a significant
delay in realisations, mitigating actions within management control
would be exercised to provide sufficient liquidity.
Taking the inputs from the strategic planning process and its stress
scenarios, the Directors reviewed an assessment of the potential
effects of 3i’s principal risks on its current portfolio and forecast
investment and realisation activity, and the consequent impact
on 3i’s capital and liquidity.
Based on this assessment, the Directors have a reasonable
expectation that the Company and the Group will be able to
continue in operation and meet all their liabilities as they fall due
up to at least the end of the three-year period of the assessment.
Long-term resilience
The long-term resilience of our business is underpinned
by our capabilities as a leading investor in Private Equity
and Infrastructure assets, including our long-term hold assets, and
our effective risk management of the core elements of our business
model (pages 14 and 15). This includes our long-term responsible
approach to investment, conservative balance sheet strategy and
an effective team built on a consistent set of shared values.
Fundamental to our long-term resilience is our investment strategy.
We invest capital in businesses to deliver capital returns and portfolio
and fund management cash income to cover our costs, and increase
returns to our investors. Our long-term investment horizon is possible
because we have a permanent capital base and are not driven
by fundraising cycles. We adopt a sector and thematic approach
to origination and portfolio construction which in turn supports long-
term sustainable growth in the portfolio.
Crucially, this investment approach can be adapted in response
to new and emerging risks and challenges including climate change,
societal and demographic trends and technological changes. It also
informs decision taking on portfolio realisations enabling
the composition of the investment portfolio to evolve over time.
The analysis and management of our principal risks is focused on
the short to medium term, and used as a basis to develop a range
of stress test scenarios. Although these are modelled over a five-year
horizon, the resilience shown by the Group, and its ability to recover
from these stressed situations, supports the assessment of our
resilience over a longer term. The availability and effectiveness
of management actions employed in the stress testing scenarios
demonstrates the flexibility with which we can respond to new
and emerging risks.
Governance
Audit, risk and control continued
Resilience statement continued
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I am pleased to present the
Valuations Committee report
for the year ended 31 March 2025.
My report explains the role of the
Committee, as well as the work
we reviewed this year.
Committee membership
Meetings
Peter McKellar (Chair)
4(4)
Simon Borrows
4(4)
James Hatchley
4(4)
David Hutchison
4(4)
Lesley Knox
2(4)
Alexandra Schaapveld
4(4)
The column above headed “Meetings” shows the number of meetings of the Committee
attended by each member during the year, together with, in parentheses, the number
of meetings they were entitled to attend. Other regular attendees at the Committee
include the following: Audit and Compliance Committee Chair; Chief Operating Officer;
Group General Counsel; Managing Partners of Private Equity; Director of Group Reporting
and Valuations; and the External Auditor, KPMG LLP.
Dear Shareholder
The Valuations Committee plays a key role in providing the Board with
assurance that the valuation methodology and process are robust and
independently challenged. During the year, we met four times as part of the
Group’s external reporting timetable. We reviewed and challenged the
assumptions behind management’s proposed asset valuations and reported
to the Audit and Compliance Committee and the Board.
Throughout FY2025, we have maintained our usual rigour and challenge of
earnings and multiples across the portfolio. Our long-term hold assets, Action
and Royal Sanders, have delivered very strong performance, as well as a
number of other larger assets across our portfolios. As the most significant
asset by value for the Group, we continue our focus on the valuation of
Action, for which the valuation methodology used, an earnings basis, is in line
with the vast majority of our other Private Equity portfolio companies. Further
details on the Action valuation can be found on page 133.
We also spent a considerable amount of time in the year on assets facing
market-specific challenges. In these instances, where assets are at a low point
in their respective market cycles, we have discussed with management the
approach to determining the maintainability of earnings, quality of
normalisations and, where applicable, triangulation against multiple data
points to determine a fair value range. We have also spent time considering
the valuation trajectory of those assets that are in a sales process, and, for
those assets which have successfully been sold, conducted the relevant
backtesting analysis.
At the time of conducting our valuation process at 31 March 2025, equity
markets experienced heightened uncertainty as a result of the anticipated
and resulting US tariff announcements. Following the announcement, our
teams were quickly able to determine that only a small number of our
portfolio companies would likely be directly impacted, and where impacts
were identified, we would expect these to be largely mitigated. Our
valuation approach, much like the approach we have taken during other
times of heightened volatility, for example the pandemic and Russia's
invasion of Ukraine, is to maintain our longer-term view on our portfolio and
valuation multiples, and consider a wide range of data points, including, but
not limited to, the peer group current averages, long-term through the cycle
averages, recent comparable transactions and exit guidance. Our selection
of multiple movements in the year reflected this analysis.
We welcome the FCA’s 2024 review of Private Market Valuations, published
on 5 March 2025. We were selected to participate in Phase 1 of the review,
which was a questionnaire. We provided detailed responses to this
questionnaire covering how we operate our valuation process and the
policies, procedures and governance that underpin it. This was submitted
in August 2024. We were not involved in Phase 2 which consisted of an in-
depth review by the FCA of governance and processes at certain firms. Our
existing valuation policy, process and governance are aligned to the FCA’s
guidance, and we remain committed to ongoing transparency in our
valuation practices for shareholders, regulators, and other stakeholders.
Governance
Audit, risk and control continued
Valuations
Committee report
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130
Peter McKellar
Committee Chair
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Our valuation process is well-controlled, rigorous, and robust, guided
by a Group Valuation Policy aligned with the IPEV principles.
Independent challenge by both management and this Committee
is integral to our process, particularly in key areas of themes and
judgement, such as earnings maintainability, appropriate multiples,
and discount rates. We apply the same discipline across all asset
classes, including in our role as manager to 3iN. Recent transactions
continue to validate our valuation approach, with premiums on exit
primarily driven by competitive tension in the exit process. We
complete backtesting of realisations to help inform on our process.
Our principal focus year on year is the Group’s unquoted investments
in Private Equity and Infrastructure, as a high level of judgement is
required to value this portfolio of assets. This portfolio accounts for
96% of 3i’s investment portfolio. The valuation of the Group’s largest
Infrastructure investment, namely the quoted holding in 3iN,
represents 3% of 3i’s investment portfolio, and the valuation is based
on the share price of 3iN at the relevant balance sheet date.
Valuations Committee’s terms of reference
www.3i.com/investor-relations/governance/principal-board-committees
At each Committee meeting, we received a detailed report from the
Group Finance Director and Chief Operating Officer recommending
the proposed valuation of the Group’s investment portfolio. This
report highlights the main drivers of value movement, analysed
between performance (movement in earnings and net debt), multiple
movements and other factors. At each meeting, we also reviewed
selected assets for detailed discussion; examples of such assets
covered during the year included Action, SaniSure, ten23 health
and Wilson.
I met the Group Finance Director and Chief Operating Officer in
advance of each meeting to discuss the key valuation assumptions
and to review management’s paper before circulation. I also met
the External auditor, KPMG, privately to discuss the results of its
quarterly reviews. These reviews challenged management’s approach
to valuations, the selection of comparable multiples and the
relevance of earnings adjustments. Additionally, KPMG selected
a sample of 11 assets, equivalent to 87% of the 31 March 2025
unquoted portfolio by value, across the half-year and full-year ends,
for an in-depth review by its specialist valuations team to help to
derive an independent valuation range. In March 2025, KPMG and
I discussed their approach to the year-end audit and their sample
of assets selected.
In advance of the half-year and full-year ends, management hold
portfolio company review (“PCR”) meetings with the respective
investment teams. Non-executive Directors, including myself, the
Chair and members of the Committee, attended a significant
proportion of the meetings held in September 2024 and March 2025.
Our valuation methodology and process remain consistent. The
valuation inputs for the Group’s portfolio companies are reviewed on
a case-by-case basis and considered against business plans, budgets,
shorter and longer-term views on trading, and sector performance.
Management considers various data points to support the fair value
of investments, including estimates of run-rate and forecast earnings
and the maintainability of these, in addition to historic earnings.
The judgements applied and resulting valuations were discussed
with the Committee and the External auditor throughout the year.
We embed an assessment of sustainability factors on our portfolio
companies throughout our investment lifecycle. These assessments
form part of our normal portfolio management process, and as part
of our PCR process, which helps inform investment decisions,
mitigation of risk and value creation opportunities. As part of
our case-by-case review of our portfolio companies, the risks and
opportunities from climate change and other sustainability factors
are one of the considerations in the overall discussion on fair value.
The rest of this report sets out in more detail what the Committee
did during the year.
Peter McKellar
Chair, Valuations Committee
14 May 2025
Governance
Audit, risk and control continued
Valuations Committee report continued
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The Committee focused on the following issues in FY2025:
Earnings and
multiple
assumptions
Area of significant attention
Of the total portfolio by value, 90% is valued using a
multiple of earnings at 31 March 2025. The majority of
assets are valued using their last-twelve-months (“LTM”)
earnings up to the prior quarter of the valuation date.
When required, earnings of the portfolio company may
be adjusted to what is considered “maintainable”. We
also apply a liquidity discount to the enterprise value
determined according to factors such as our alignment
with management and other shareholders and our
investment rights in the company. The liquidity discounts
are generally set at 5% of the enterprise value of the
company. In some cases, such as instances where we
hold a minority stake, the discount rate can be higher.
There is also a significant degree of judgement in
selecting the set of comparable quoted companies and
transactions which are used as a key data point in
determining the appropriate multiple to calculate an
enterprise value. Multiples are selected by reference to
the market valuation of quoted comparable companies,
long-term averages of comparable companies, M&A
transactions and input, in certain cases, from corporate
finance advisers. We also take into account growth
profile, geographic location, business mix, degree of
diversification, and leverage/refinancing risk. The
multiple implied by the quoted comparables may be
adjusted if, in certain cases, the longer-term view (cycle
or exit plan) supports the use of a different multiple. This
continues to be an important exercise given the market
volatility we have seen as a result of the macro-economic
environment. We continue to consider the impact of IFRS
16 and ASC 842 on the quoted comparable companies
for those assets that report under local GAAP.
Private Equity assets are typically valued using a multiple
of earnings. However, alternative valuation
methodologies, such as a DCF valuation or a sum-of-the-
parts, may be considered as an alternative benchmark for
potential value or as a cross-check relative to the
earnings-based valuation.
In the year, the Committee placed a key focus on:
• the budgets and projections for each portfolio
company versus performance;
• the maintainability of earnings across LTM, forecast
and run-rate earnings;
• the quality of earnings and the impact of one-off
related normalisation adjustments;
• portfolio company leverage and covenant monitoring;
and
• our long-term, through-the-cycle, view on multiples
against the average of the quoted comparable
peer sets.
What the Committee reviewed
and concluded
Earnings data is received monthly from Private
Equity portfolio companies and monitored
closely by management. Actual earnings may
then be adjusted in management’s proposed
valuations, for example, to reflect a full year’s
trading of an acquired business, removing profit
from discontinued activities, any forecast
uncertainty or to exclude exceptional transaction
costs. Material adjustments are highlighted to
the Committee in the quarterly report for review
and approval.
At 31 March 2025, seven portfolio company
valuation multiples, including Action, were
valued above their peer set averages but remain
well within the peer set range. Notable changes
in multiples, which commonly result from
significant bolt-on acquisitions, a change
in performance or a shift in market sentiment
in that sector, are presented to and reviewed
by the Committee at each meeting.
Governance
Audit, risk and control continued
Valuations Committee report continued
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The Committee focused on the following issues in FY2025:
Action
Area of significant attention
Action forms 70% of the total portfolio by value. Valued
on a multiple of earnings basis, Action is the largest
investment for the Group and, therefore, its valuation
is a key area of focus.
Action’s run-rate earnings grew significantly in the
12 months to the end of Action’s P3 2025 (which ended
on 30 March 2025), driven by new store openings and
increased transaction volumes. Following a successful
refinancing and capital restructuring , Action returned
£1,164 million of proceeds to 3i, in addition to £433
million of cash dividends further to its strong cash
generation. 3i reinvested £768 million of these proceeds,
increasing its equity interest in Action from 54.8% to
57.9%.
Action was valued using its run-rate earnings for the
12 months to P3 2025 of €2,328 million and a run-rate
multiple of 18.5x (31 March 2024: 18.5x) after applying
a liquidity discount of 5%.
When considering the multiple for Action we paid
particular attention to the following areas:
• the appropriateness of the comparable peers from
both a forward and backward-looking perspective; and
• the strength of Action’s performance across its key
performance indicators compared to its peers.
Management also cross-checked the earnings-based
valuation against a DCF model.
What the Committee reviewed
and concluded
The Committee noted Action’s impressive
performance in the year, including the
momentum in its trading, its like-for-like sales
growth and consistency in its performance.
The Committee reviewed the work done
by management on the comparable peer set
and Action’s relative performance across its
key performance indicators, as well as cross-
checking to a DCF model.
The Committee agreed with management’s
approach of valuing Action on the basis of
a multiple of earnings, but noted that the
DCF model provides a useful reference point.
The Committee reviewed the run-rate
adjustments and earnings normalisations
to ensure a consistent valuation
methodology was applied.
Assets valued
using a DCF basis
Area of significant attention
For assets valued using a DCF basis, which represent
4% of the total portfolio by value, the key valuation
judgements relate to longer-term assumptions that drive
the underlying business plan and cash flows and
decisions on the appropriate discount rates and terminal
value.
Amwaste, EC Waste, Regional Rail, Scandlines and
Smarte Carte are the significant investments valued using
a DCF valuation basis. A DCF model also forms the most
significant input into the valuation of ten23 health, which
is valued on a sum-of-the-parts basis.
What the Committee reviewed
and concluded
Material assumptions for the DCF valuations
are reviewed by the Committee. Sensitivity to
assumptions is also noted. Any material changes
are reviewed by the Committee at each
meeting.
Governance
Audit, risk and control continued
Valuations Committee report continued
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The Committee focused on the following issues in FY2025:
Imminent sale
assets
Area of significant attention
At any point in time, it is likely that a number of potential
exit processes from the portfolio are underway.
Judgement is applied by management as to the likely
eventual exit proceeds and certainty of completion. This
means that in some cases an asset may not be moved to
an imminent sale basis until very shortly before
completion; in other cases, the move may occur on
signing, even if the time to completion is a period of
some months. However, as a general rule an asset moves
to an imminent sale basis only when an exit process is
materially complete and the remaining risks are
estimated to be small, given the completion risk around
unquoted equity transactions.
In FY2025, nexeye and WP were held on an imminent
sale basis. Both sales were subsequently completed
during the year. Management conducted backtesting
analysis on both disposals.
What the Committee reviewed
and concluded
Active sales processes are reviewed by the
Committee, including details such as the
timeline to potential completion, the number
and make-up of bidders for investments, due
diligence and execution risks, and regulatory or
competition clearance issues. Management
proposes a treatment for each asset in a sales
process, which the Committee reviews at each
meeting.
Review process
As part of its challenge and review process, the Committee:
• considered the management information provided to support
the Committee’s review of the valuations, including management’s
responses to any challenges raised by Committee members or the
External auditor;
• sought assurance from the External auditor as to whether and how
they had considered the appropriateness of valuations and the
underlying assumptions made;
• reviewed the consistency of the views of management and
the External auditor and their valuation specialists; and
• reviewed and challenged the differential between carrying values
and those implied by the multiples of comparable quoted
companies and transactions.
The Committee was satisfied that the application of the valuation
policy and process was appropriate during the period under review,
and recommended the portfolio valuation to the Audit and
Compliance Committee and the Board at each quarter end
for approval by the Board.
In addition, the Committee is responsible for keeping the Group’s
valuation policy under review and recommending any changes to
the policy to the Audit and Compliance Committee and the Board.
The policy is reviewed at least annually, with the last update in
January 2025.
More information on our valuation methodology, including
definitions and rationale, is included in Note 13 – Fair values of
assets and liabilities starting on page 176 and in the Portfolio
valuation – an explanation section on page 211.
External audit
As part of the half year review and year-end audit, KPMG’s specialist
valuations team reviews a selection of investments to support its
overall audit opinion on the financial statements as a whole.
Governance
Audit, risk and control continued
Valuations Committee report continued
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3i has delivered another strong set
of results in FY2025 continuing our
track record of consistently
delivering impressive shareholder
returns. This performance is
reflected in the remuneration
outcomes as set out in this report.
Committee membership
Meetings
Coline McConville
7(7)
Alexandra Schaapveld
7(7)
Lesley Knox
6(7)
Peter McKellar
7(7)
The column above headed “Meetings” shows the number of meetings of the Committee
attended by each member during the year, together with, in parentheses, the number
of meetings they were entitled to attend. Ms Knox provided comments on the topics
to be discussed at the Committee that she was unable to attend.
The Chief Executive, the Company Chair, the Remuneration Director and the General
Counsel & Company Secretary attend Committee meetings by invitation, other than
when their personal remuneration is being discussed.
Dear Shareholder
This letter summarises the key Executive Director remuneration issues
considered by the Remuneration Committee in the year and the
decisions we made.
FY2025 performance
3i delivered another strong set of results in FY2025 with a total return
on opening shareholders’ funds of 25% (2024: 23%). The global
economy remained challenging, shaped by geopolitical tensions
and muted growth across major markets. Our value-for-money and
private label businesses remained focused on the customer and
delivered strong performance.
Action was the key driver of returns, supported by strong earnings
growth, cash generation and continued strategic momentum. This
result was particularly impressive, as the business operated against
a backdrop of muted economic growth across many of its European
markets. We increased our exposure to Action during the year and
completed the final associated carried interest payments, ensuring
undiluted shareholder benefit going forward.
The M&A environment stabilised through 2024 as inflation and
interest rates levelled out. However, investor sentiment remained
cautious and we took a selective and disciplined approach to capital
deployment, focusing on reinvestments in high-performing portfolio
companies, making three new investments totalling £318 million
(WaterWipes, Constellation and OMS Prüfservice) and 12 bolt-on
acquisitions across our Private Equity portfolio in sectors we know well.
Strong growth was seen in several other portfolio companies, notably
Royal Sanders, another one of our long-term hold assets, which
continued its organic and acquisitive expansion. Our industrial and
healthcare portfolios also performed well, while services and software
assets showed resilience despite cautious IT spending.
In Infrastructure, 3iN delivered a strong realisation at a 3.6x money
multiple, completed two large refinancing transactions and invested
further in two existing assets. Meanwhile, our North American
Infrastructure Fund added three bolt-on acquisitions.
Total realised proceeds and income across our portfolios reached
£2.4 billion, including £1.6 billion from Action through refinancing,
share redemption exercise and dividends. Two significant Private
Equity realisations achieved multiples of 2x or higher, including one
materially above its March 2024 valuation.
Shareholders have benefitted from this continued strong
performance. Our total shareholder return over the year was 31%
and, over a three-year period, our total shareholder return was over
210%, the third highest over that period in the FTSE 350.
Governance
Remuneration
Directors’
remuneration report
3i Group plc | Annual report and accounts 2025
135
Coline McConville
Committee Chair
Contents
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FY2025 bonus scorecard
As noted in last year’s letter, the Committee has reviewed the current
scorecard to ensure that the scorecard was appropriately structured
to reflect the Group's strategic priorities, was aligned with the shape
of the Group's underlying portfolio and the delivery of sustainable
performance over the cycle.
Whilst the overall construct of the scorecard was considered
appropriate the Committee made the following changes:
• re-weighting the quantitative element of the scorecard (measuring
returns from Action, Private Equity (ex. Action) and Infrastructure) to
better reflect the relative size of each of the businesses;
• added an additional metric which measures 3i’s total return; and
• simplified and reduced the weighting on the Qualitative section
of the scorecard with Sustainability, Strategy & People measures.
With these changes, the quantitative element of the scorecard was
weighted at 85% (FY24 70%), ensuring that reward for our Executive
Directors continues to be based on output-based metrics linked to
return for investors.
The FY2025 outcomes against this scorecard are shown in the
Implementation Report, and delivered a result of 88% of maximum.
The Committee is satisfied that this new scorecard assesses
management’s performance appropriately in the context of 3i’s
performance and determined that no adjustments were required.
2022 LTIP outcomes
The 2022 LTIP award was based on two equally weighted performance
conditions: absolute and relative TSR against the FTSE 350. You will
see in this report that based on performance over the three-year
period, the 2022 LTIP achieved 100% vesting with absolute TSR growth
of 46.3% per annum and relative TSR well above the upper decile of
the peer group. The Committee considered that the value of awards
vesting reflected performance and therefore made no adjustment.
Remuneration Policy
As set out in my cover letter in the 2024 Directors’ Remuneration
Report, during the past six months the Committee has reviewed the
Remuneration Policy and considered whether it (i) remains fit for
purpose; and (ii) appropriately reflects both the size and complexity
of the Group’s operations and the calibre of executives we have in
place. Overall, the Committee continues to consider that 3i’s current
remuneration framework remains fit for purpose.
While the Committee felt it should review the incentive opportunity
levels for our executive team, which have not kept pace with the
growth of 3i since May 2012 (when Mr Borrows was appointed as
Chief Executive and the new strategy announced), the Committee
decided that it would be undertaken as part of the Remuneration
Policy update and vote, scheduled for the 2026 AGM. However,
the Committee considered that a more urgent review of executive
director base salaries was required.
3i’s NAV per share has increased from £2.79 (31 March 2012) to
£25.42 (31 March 2025) plus £4.315 cumulative dividends, which has
moved the Company from outside the FTSE 100 to within the FTSE
30 as at 31 March 2025. Over this time, our executive remuneration
arrangements have fallen behind those of other UK listed businesses
(general industry and asset managers) and are positioned materially
behind alternative asset management peers, which are generally
privately held. Reflecting this, the Committee is proposing to make
changes to base salaries for the upcoming year.
The uniqueness of the Group relative to the UK markets makes
remuneration benchmarking more challenging, and therefore the
Committee has looked at a number of different reference points -
FTSE 50 companies, FTSE listed asset management firms and Private
Equity firms. Our benchmarking included comparing the CEO and
the Group Finance Director’s current and proposed salaries and total
maximum compensation against the FTSE 50 and against a
comparator peer group of eight other UK listed asset managers1.
There is limited public data for the COO role, given the lack of such
roles at other listed companies, but the Committee reviewed
benchmark data and the overall positioning is consistent for all three
Executive Directors. It should be noted that, unlike our private equity
competitors, none of our executive directors participate in carried
interest or similar incentive plans. The benchmarking is summarised
as below (maximum compensation is base salary plus the maximum
bonus and LTIP that can be awarded annually).
Based on the Group’s performance and the supporting market data,
we are proposing that the base salary for each of the three Executive
Directors is adjusted by £70,000 (rounded) with effect from 1 July
2025. The base salary for our executive directors will be as follows:
• Chief Executive: £822,000 (current: £752,000) +9.3%
• Group Finance Director: £600,000 (current: £530,000) +13.2%
• Chief Operating Officer: £470,000 (current: £400,000) +17.5%
FTSE 50
UK Listed Asset
Managers
3i Group’s ranking by
market capitalisation
22nd
1st
Chief Executive
Current Salary (£752k)
Below lower quartile
(LQ) (£1.1m)
6th (of 9)
Proposed Salary (£822k)
Below LQ (£1.1m)
5th
Current maximum
compensation (£6.7m)
Below Median (£9.3m)
2nd
Proposed maximum
compensation (£7.4m)
Below Median (£9.3m)
2nd
Group Finance Director
Current Salary (£530k)
Below LQ (£720k)
6th
Proposed Salary (£600k)
Below LQ (£720k)
4th
Current maximum
compensation (£3.2m)
Below LQ (£3.8m)
4th
Proposed maximum
compensation (£3.7m)
Below LQ (£3.8m)
3rd
1
Schroders, ICG, Hargreaves Lansdown, St James’ Place, Bridgepoint Group, M&G, MAN Group, Aberdeen
While the Committee is conscious that the proportional increase
differs by Executive Director (reflecting their current base salary) and
is materially greater than the general staff base salary increase (4%),
the Committee felt it is merited by the strong performance delivered
by each of the Executive Directors, the complexities of their roles and
in order to reduce the market gap that currently exists.
I hope that you will find this report a clear account of the way in which
the Committee has implemented the remuneration policy during
the year and I look forward to your support for our Annual report
on remuneration at the upcoming AGM.
Coline McConville
Chair, Remuneration Committee
14 May 2025
Governance
Remuneration continued
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During FY2025, we operated under the remuneration policy approved at the 2023 AGM, which can be found on our website at www.3i.com.
Director remuneration for the year (audited)
Single total figure of remuneration for each Director
FY2025
FY2024
£’000
Salary/
fees
Benefits Pension
Total
fixed
pay
Annual
bonus
LTIP
Total
variable
pay
Total
Salary/
fees Benefits Pension
Total
fixed
pay
Annual
bonus
LTIP
Total
variable
pay
Total
S A Borrows
744
19
23 786 2,646 8,476 11,122 11,908 713
17
21 751 2,031 6,640 8,671 9,422
J G Hatchley
524
18
55 597 1,166 3,735 4,901 5,498 503
17
53 573 895 336 1,231 1,804
J H Halai
391
20
50 461 791 2,325 3,116 3,577 357
19
46 422 577 226
803 1,225
D A M Hutchison 370
–
– 370
–
–
–
370 335
–
– 335
–
–
–
335
C J Banszky
–
–
–
–
–
–
–
–
24
–
–
24
–
–
–
24
S W Daintith
99
–
–
99
–
–
–
99
89
–
–
89
–
–
–
89
L M S Knox
114
–
– 114
–
–
–
114
96
–
–
96
–
–
–
96
C McConville
109
–
– 109
–
–
–
109
98
–
–
98
–
–
–
98
P A McKellar
109
–
– 109
–
–
–
109
98
–
–
98
–
–
–
98
H Patel
11
–
–
11
–
–
–
11
–
–
–
–
–
–
–
–
A Schaapveld
104
–
– 104
–
–
–
104
92
–
–
92
–
–
–
92
• Benefits for Executive Directors include a car allowance, provision of health insurance and, for Ms Halai, the value of the Share Incentive Plan
matching share awards.
• The amounts shown as pension are salary supplements in lieu of pension contributions. These supplements were in line with pension
contributions for the Group’s employees generally (12% of pensionable salary).
• Annual bonus awards made in respect of the year are delivered as 60% 3i Group plc shares deferred over four years, and the remaining 40%
as a cash payment in May 2025. All annual bonus awards are subject to the malus/clawback policy. Those shares deferred over four years
are released in four equal annual instalments commencing June 2026 and all share awards carry the right to receive dividends and other
distributions.
• In addition to the table above, dividends or dividend equivalents on unvested deferred share awards were paid during the year
(Mr Borrows: £121k, Mr Hatchley: £42k and Ms Halai: £21k).
• The values shown in the FY2025 LTIP column represent the performance shares vesting from the 2022 LTIP, together with the value
of accrued dividends on those shares. The shares have been valued using the three-month average closing share price to 31 March 2025
(3,839.75 pence). The 2022 LTIP value attributable to share price growth since the awards were granted is £5,321k, £2,345k and £1,459k for
Mr Borrows, Mr Hatchley and Ms Halai respectively. Further detail is provided on page 139. The values shown in the FY2024 LTIP column
represent the shares that vested from the 2021 LTIP last year, together with the value of accrued dividends on those shares. It should be
noted that the awards that vested to Mr Hatchley and Ms Halai last year were awards made prior to them being appointed to the Board.
This value has been restated using the prevailing share price at the time of vesting (2,999 pence for Mr Borrows and 2,931.3 pence for
Mr Hatchley and Ms Halai), being the third anniversary of grant.
• The fees shown for the non-executive Directors include fees used to purchase shares in the Company.
• Non-executive Directors receive reimbursement for their reasonable expenses for attending Board meetings. The Group meets
the associated tax cost.
• Ms Halai retained Directors’ fees of £83k from Barratt Developments plc.
Governance
The Annual report on remuneration (Implementation report)
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FY2025 performance
Quantitative performance measures (85% of total. FY2025 payout 73%)
Area of strategic focus
Weighting
Metric
Threshold
Maximum
Performance
Pay-out
Portfolio returns (Action)
36.0% Gross investment return
(% of opening portfolio value)
16%
21%
32%
100%
Portfolio returns (excl. Action)
14.0% Gross investment return
(% of opening portfolio value)
10%
15%
10.3%
24%
Portfolio returns (Infrastructure)
5.0% Gross investment return
(% of opening portfolio value)
8%
10%
9.4%
76%
Total Returns
30.0% Total return (% of opening
shareholders' funds)
13%
17%
25.0%
100%
•
The threshold and maximum return targets are set in line with 3iN’s public return objectives.
Qualitative performance measures (15% of total. FY2025 payout 15%)
Sustainability
5.0%
Sustainability
targets across
the portfolio
and 3i Group
We made further refinements in the monitoring of sustainability risks and portfolio
performance, including development of a human rights framework and high-level
assessment of nature-related impacts and dependencies. We enhanced the annual
sustainability assessment questionnaire for portfolio companies and made progress
with engagement with portfolio companies covering material topics, including CSRD,
human rights and climate. We increased the number of portfolio companies which
have science-based targets at 31 March 2025, with seven in comparison to one as of
the FY2023 base year. We collected Scope 1 and 2 data from 100% of our Private
Equity and economic infrastructure portfolio companies (excludes some legacy
minority and other minority investments where we have limited influence).
Strategy & People
10.0%
Development
of the strategic
vision of the
Group and
progress
of corporate
projects
In July 2024 Action successfully completed a refinancing event. At the same time, it
undertook a pro-rata share redemption returning £1,164 million in gross proceeds to
the Group. 3i took the opportunity to increase its ownership in Action, reinvesting £768
million and increasing our gross equity stake from 54.8% to 57.9%. Additionally, we
completed the final payment of the associated carried interest liability, ensuring that
the full economic benefit of Action’s performance is now passed through to
shareholders with no dilution.
The Private Equity team has successfully implemented a sector-led approach with the
new sector heads appointed and managing their cross-border teams.
In very difficult market and macro conditions for realisations, our investment teams
were able to complete three cash realisations in the year (nexeye, Weener Plastics and
Valorem) at or above 2.0x sterling money multiples.
We continue to take part in various human resources initiatives both internally and
across the industry, including sponsorship of Level 20, offering internships as part of
GAIN (Girls Are INvestors) and 10,000 Black Interns programmes.
Area of strategic focus
Weighting
Metric
Comments
Executive Director annual bonus outcomes
In light of the performance detailed above, and following an assessment taking into account the shareholder, employee and wider
stakeholder experience, further detail of which is provided in the Remuneration Committee Chair’s statement, the Committee awarded
bonuses to the Executive Directors of 88% of maximum. Bonuses are delivered as 40% paid in cash immediately and 60% deferred into
the Company’s shares, vesting in four equal annual instalments. Annual bonus awards are subject to the malus/clawback policy.
Governance
The Annual report on remuneration (Implementation report) continued
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Share awards vesting in FY2025 subject to performance conditions
2022 Long-term incentive award (audited)
The Long-term incentive awards granted in June 2022 were subject to performance conditions based on absolute and relative total
shareholder return over the three financial years to 31 March 2025. The table below shows the achievement against these conditions
and the resulting proportion of the awards which will vest in June 2025.
Weighting
Threshold
Maximum
Actual
Total
Total shareholder return measure
%
Performance
% vesting
Performance
% vesting
Performance
% vesting
% vesting
Absolute total shareholder return
50%
10% pa
20%
18% pa
100%
46% pa
100%
100%
Relative total shareholder return
(as measured against the FTSE
350 Index)
50%
Median
25%
Upper
quartile
100%
Above
Upper
quartile
100%
The table below shows the grants made to the Executive Directors in 2022, at a share price of 1,315.5 pence, and the resulting number
of shares that will vest due to the achievement against the performance targets as set out above. The value of the shares vesting has been
included in the single figure table using the three-month average closing share price to 31 March 2025 of 3,839.75 pence.
Reflecting on performance delivered over the performance period (in terms of operational performance of the business and returns delivered
to our shareholders), further detail of which is provided in the Remuneration Committee Chair’s statement, the Committee considered the
formulaic out-turn to be an appropriate reflection of performance and therefore did not exercise any discretion or downwards adjustment
in relation to the award.
Basis of award at grant
Face value
at grant £'000
Number of
shares awarded
at 1,315.5p
per share
% vesting
Number of
shares vesting
Value of
shares vesting
at 3,839.75p
per share £'000
S A Borrows
Face value award of 4 times base salary of £693k
2,773
210,792
100%
210,792
8,094
J Hatchley
Face value award of 2.5 times base salary of £489k
1,222
92,892
100%
92,892
3,567
J Halai
Face value award of 2.25 times base salary of £338k
760
57,810
100%
57,810
2,220
The proportion of the award vesting is subject to a further holding period, and shares will be released on the fifth anniversary of grant together
with the value of dividends that would have been received during the period from grant to the release date.
Change in the remuneration of the Directors compared to other employees
The table below shows the percentage change in remuneration paid to each Director and employees as a whole for the past four
performance years.
FY2025
FY2024
FY2023
FY2022
FY2021
Salary/
Fees Benefits
Bonus
Salary/
Fees
Benefits
Bonus
Salary/
Fees
Benefits
Bonus
Salary/
Fees
Benefits
Bonus
Salary/
Fees
Benefits
Bonus
S A Borrows
4%
11%
30%
4%
12%
(14%)
4%
–%
(10%)
3%
–%
9%
–%
–%
149%
J G Hatchley
4%
4%
30%
17%
19%
(3%)
J H Halai
10%
8%
37%
20%
38%
1%
D A M Hutchison
10%
3%
74%
85%
9%
S W Daintith
11%
6%
4%
–%
–%
L M S Knox
19%
2%
114%
C McConville
11%
2%
3%
3%
3%
P A McKellar
11%
2%
33%
H Patel
A Schaapveld
13%
10%
4%
(5%)
467%
Employees
7%
8%
7 %
7%
27%
(5%)
13%
2%
6%
7%
9%
32%
2%
2%
76%
D A M Hutchison was appointed Chair in November 2021. L M S Knox and P A McKellar were both appointed during FY2022 and A Schaapveld during FY2020. The change in the fees shown above is due to part-year payments.
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Details of share awards granted in the year
LTIP
Performance share awards were granted to the Executive Directors during the year as shown in the table below.
Description of award
A performance share award, which releases shares, subject to satisfying the performance
conditions, on the fifth anniversary of award.
Face value
Chief Executive – 400% of salary, being 103,626 shares.
Group Finance Director – 250% of salary, being 45,666 shares.
Chief Operating Officer – 225% of salary, being 30,997 shares.
The share price used to make the award was the average mid-market closing price over
the five working days starting with the day of the announcement of the 2024 annual results
(2,901.2 pence). We continue to apply our long-held consistent policy of measuring
performance using the three-month average closing share price to 31 March and granting
awards using the five-day average closing price (starting on the day of the announcement
of the annual results).
Performance period
1 April 2024 to 31 March 2027.
Performance targets
50% of the award is based on absolute TSR measured over the performance period,
and vests:
• 0% vesting below 10% pa TSR;
• 20% vesting at 10% pa TSR;
• straight-line vesting between 10% and 18% pa TSR; and
• 100% vesting at 18% pa TSR.
50% of the award is based on relative TSR measured against the FTSE 350 Index over
the performance period, and vests:
• 0% vesting for below median performance against the index;
• 25% vesting for median performance against the index;
• 100% vesting for upper quartile performance against the index; and
• straight-line vesting between median and upper quartile performance.
Remuneration Committee discretion
The Committee can reduce any award which would otherwise vest if there are unauthorised
breaches of the Group’s liquidity and gearing policies or where significant adjustment is
required to ensure the outcome is a fair reflection of the performance of the Company and
the individual.
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Deferred bonuses awarded in FY2025
All Directors are considered to be Identified Staff and, for awards made during FY2025, 60% of the annual bonus was delivered in 3i Group plc
shares deferred over four years (and which vest one quarter per annum over those four years). The remaining 40% was delivered as a cash
bonus in May 2024. The following awards were made on 3 June 2024 in respect of FY2024 performance:
Face value at grant
Number of shares awarded
at 2,901.2p per share
Vesting
S A Borrows
£1,219k
42,006
Four equal instalments annually from 1 June 2025
J G Hatchley
£537k
18,511
Four equal instalments annually from 1 June 2025
J H Halai
£346k
11,936
Four equal instalments annually from 1 June 2025
The face value of the awards were reported in the FY2024 single figure of remuneration. The share price used to calculate face value was the
average of the mid-market closing prices over the five working days starting with the date of the announcement of the Company’s results for
the year ended 31 March 2024 (9 May 2024 to 15 May 2024), which was 2,901.2 pence. These awards are not subject to further performance
conditions but are subject to our malus and clawback policy.
Share Incentive Plan
During the year, Ms Halai participated in the HMRC-approved Share Incentive Plan which allowed employees to invest up to £150 per month
from pre-tax salary in ordinary shares (“partnership shares”). For each partnership share, the Company grants two free ordinary shares
(“matching shares”) which are forfeited if the participant resigns within three years of grant. Dividends are reinvested in further ordinary shares
(“dividend shares”).
Ms Halai purchased 54 partnership shares, and received 108 matching shares and 463 dividend shares at prices ranging between 2,865 pence
and 4,054 pence per share, with an average price of 3,377 pence.
Hedging of share awards
As a matter of policy the Group ensures that it holds the maximum potential number of shares granted under the LTIP and Deferred Share
Plan from the date of grant. Shares are purchased by the Employee Benefit Trust in the market as and when required to ensure that coverage
is maintained.
Pension arrangements (audited)
The Executive Directors receive pension benefits on the same percentage basis (12%) of their pensionable salaries as other employees
of the Company. During the year, they received salary supplements in lieu of pension of £23k (Mr Borrows), £55k (Mr Hatchley) and £41k
(Ms Halai) respectively. Mr Borrows’ pensionable salary is subject to the 3i earnings cap (FY2025: £217,241).
Prior to 2011, Executive Directors were eligible for membership of the 3i Group Pension Plan, a defined benefit contributory scheme. Pension
accrual ceased for all members with effect from 5 April 2011. Salary linkage was removed in February 2023 and replaced with a time-limited
cash allowance, which the Chief Operating Officer receives (£9k), in line with other, similarly affected staff.
Payments to past Directors (audited)
No payments to past Directors were made in the year.
Payments for loss of office (audited)
No payments to Directors for loss of office were made in the year.
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Statement of Directors’ shareholding and share interests (audited)
The Company’s share ownership and retention policy requires Executive Directors to build up over time and thereafter maintain a
shareholding in the Company’s shares equivalent to at least 3.0 times gross salary in the case of the Chief Executive and 2.0 times gross salary
for the Group Finance Director and Chief Operating Officer. In addition, shareholding targets have been introduced for other members of the
Executive Committee at 1.5 times their gross salaries and for partners in the Group’s businesses at 1.0 times their gross salaries. Since 2018,
non-executive Directors and the Chair are required to build up over time and thereafter maintain a shareholding in the Company’s shares
equivalent to at least the same as their respective annual base fees (cash and shares).
Executive Directors are expected to maintain a shareholding in the Company for two years post-employment, at the lower of their
shareholding at the time they leave employment and the applicable levels set out above.
Details of Directors’ interests (including interests of their connected persons) in the Company’s shares as at 31 March 2025 are shown
in the table below. The closing share price on 31 March 2025 was 3,616 pence.
Owned outright
Deferred shares
Subject to
performance
Shareholding
requirement
Current
shareholding
(% salary)
S A Borrows
16,657,061
933,383
258,810
300%
85,873
J G Hatchley
329,124
157,281
114,052
200%
4,097
J H Halai
102,350
101,973
75,095
200%
2,528
Shares owned
outright
Shareholding
requirement
Current
shareholding
(% base fee)
D A M Hutchison
64,784
100%
633
S W Daintith
21,444
100%
1,055
L M S Knox
3,149
100%
155
C McConville
11,006
100%
541
P A McKellar
103,572
100%
5,095
A Schaapveld
17,696
100%
871
•
The share interests shown for Ms Halai include shares held in the 3i Group Share Incentive Plan. The owned outright column includes partnership and dividend shares under the SIP. The deferred shares column includes matching
shares under the SIP.
•
The number of shares shown includes the 2022 Performance Share award. The performance against the performance targets results in 100% of the shares being released as described on page 139.
•
Directors are restricted from hedging their exposure to the 3i share price.
•
From 1 April 2025 to 15 May 2025, Ms Halai became interested in a further 3 shares overall outright (SIP Partnership Shares) and a further 6 deferred shares (SIP Matching Shares). There were no other changes to Directors’ share
interests in that period.
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Performance graph – TSR graph
This graph compares the Company’s total shareholder return for the 10 financial years to 31 March 2025 with the total shareholder return
of the FTSE 350 Index. The FTSE 350 Index is considered to be an appropriate comparator as it reflects the variety of the Company’s portfolio
of international investments and the diverse currencies in which those investments are denominated.
3i Total shareholder return vs FTSE 350 total return over the 10 years to 31 March 2025
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
0
250
500
750
1000
l 3i Group
l FTSE 350
Rebased at 100 at 31 March 2015
Chief Executive’s single figure remuneration history (£’000)
666
678
681
695
721
751
786
472
383
953
1,045
943
812
1,058
1,887
575
1,429
1,568
1,414
1,219
1,588
2,334
2,192
1,749
2,550
2,587
2,589
2,773
2,518
296
498
812
3,841
4,051
5,703
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
l Fixed remuneration
l Cash bonus
l Deferred Share Award
l Value of LTIP vesting at grant price
l Additional LTIP value due to share price growth and dividends
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Performance table
Table of historic Chief Executive data
Year
Chief Executive
Single figure of total
remuneration £’000
Percentage of
maximum
annual bonus paid
Percentage
of maximum
LTIP vesting
FY2025
S A Borrows
11,908
88.0%
100%
FY2024
S A Borrows
9,422
70.6%
100%
FY2023
S A Borrows
9,506
85.0%
100%
FY2022
S A Borrows
6,215
98.0%
100%
FY2021
S A Borrows
5,310
92.0%
71%
FY2020
S A Borrows
4,124
37.0%
91%
FY2019
S A Borrows
7,877
92.5%
100%
FY2018
S A Borrows
6,847
92.5%
100%
FY2017
S A Borrows
7,544
95.0%
100%
FY2016
S A Borrows
5,821
92.5%
98%
Relative importance of spend on pay
FY2025
FY2024
Change %
Remuneration of all employees
£104m
£102m
2%
Dividends paid to shareholders
£625m
£541m
16%
Statement of implementation of the remuneration policy in the coming year
The table below sets out how the Committee intends to operate the remuneration policy in FY2026. As mentioned in the Chair’s letter, whilst
our policy has delivered appropriate outcomes since the Chief Executive implemented the new strategy in 2012, the Company has changed
significantly since then in terms of portfolio structure and overall size (by NAV and market capitalisation). Therefore, over the coming year
the Committee will conduct a thorough review of this policy to ensure that it remains aligned with the Company’s strategy and will continue
to incentivise and reward management in the medium to long term. If changes to our policy are required we will consult with our largest
shareholders, and present any new policy to shareholders to approve at the 2026 AGM.
Base salary
Base salaries for most employees will be increased by 4%. As set out in the Chair’s letter, the base salaries for the
current Executive Directors, from 1 July 2025, will be as follows:
• Chief Executive: £822,000 (9.3%)
• Group Finance Director: £600,000 (13.2%)
• Chief Operating Officer: £470,000 (17.5%)
Pension
No changes to the current arrangements are proposed for FY2026 and a pension contribution or salary supplement
will be as follows:
• Chief Executive: 12% of benefit salary (subject to a 3i earnings cap. FY2026: £223,097)
• Group Finance Director: 12% of base salary
• Chief Operating Officer: 12% of base salary
Prior to 2011, Executive Directors were eligible for membership of the 3i Group Pension Plan, a defined benefit
contributory scheme. Pension accrual ceased for all members with effect from 5 April 2011. Salary linkage was
removed in February 2023 and replaced with a time-limited cash allowance, which the Chief Operating Officer
receives, in line with other, similarly affected staff.
Policy element
Implementation of policy during FY2026
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Annual bonus
The maximum annual bonus opportunities for FY2026 will remain unchanged, in line with the remuneration policy,
as follows:
• Chief Executive: 400% of salary
• Group Finance Director: 250% of salary
• Chief Operating Officer: 225% of salary
The Committee has agreed that the scorecard for the year will be driven 85% by quantitative financial targets around
portfolio returns and similar metrics, with the balance measured against Sustainability, Strategy and People goals.
The scorecard is agreed at the beginning of the financial year and the weightings of each measure reflects the
weighting of our portfolio. The Committee continues to set stretching targets to ensure Executive Directors strive
to maximise returns for shareholders
The Committee considers that the specific targets and expectations contained within the FY2026 scorecard
are commercially sensitive and therefore will not be disclosed in advance. We will report to shareholders next year
on performance and the resulting bonus out-turns.
At least 50% of any bonus award will be deferred into shares vesting in equal instalments over four years.
Awards are subject to the Company’s malus and clawback policy.
Benefits
No changes to the current arrangements are proposed for FY2026.
Benefits will continue to include a car allowance, provision of health insurance and any Share Incentive Plan matching
share awards.
Long-term
Incentive Plan
Awards under the Long-term Incentive Plan in FY2026 will remain unchanged and be made as follows:
• Chief Executive: 400% of salary
• Group Finance Director: 250% of salary
• Chief Operating Officer: 225% of salary
Performance will be measured over a three-year period and will be determined by the Remuneration Committee.
Performance measures remain unchanged from the previous year and will be as follows:
50% of the award is based on absolute TSR measured over the performance period, and vests:
• 0% vesting below 10% pa TSR;
• 20% vesting at 10% pa TSR;
• straight-line vesting between 10% and 18% pa TSR; and
• 100% vesting at 18% pa TSR.
50% of the award is based on relative TSR measured against the FTSE 350 Index over the performance period,
and vests:
• 0% for below median performance against the index;
• 25% for median performance against the index;
• 100% for upper quartile performance against the index; and
• straight-line vesting between median and upper quartile performance.
Total shareholder returns are calculated based on the average closing share price over the first three months
of the calendar year.
Awards are subject to the Company’s malus and clawback policy.
To the extent that shares vest, awards are subject to a holding period whereby they are released on or around
(but not earlier than) fifth anniversary of grant.
The Chief Executive, Group Finance Director and Chief Operating Officer do not participate in carried interest plans
or similar arrangements.
Policy element
Implementation of policy during FY2026
Governance
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Shareholding
requirements
Shareholding requirements will be as follows:
• Chief Executive: 300% of salary
• Group Finance Director: 200% of salary
• Chief Operating Officer: 200% of salary
• Non-executive Directors (including the Company Chair): 100% of base fee (cash and shares)
• Executive Directors will be expected to maintain a shareholding in the Company for two years post-employment,
at the lower of their shareholding at the time they leave employment and of the levels set out above. Deferred
bonus awards and shares to be released under the Long-term Incentive Plan may be reduced or withheld if the
post-employment shareholding targets for the Executive Directors are not met.
Non-executive
Director fees
The base fees for the non-executive Directors have increased by the same percentage (4%) as salaries for employees.
The Chair, Senior Independent Director, Committee Chair and Committee membership fees have been benchmarked
against other FTSE100 organisations and have been increased accordingly. The increase for the Chair reflects the
responsibilities and time commitments of the role. The fee remains below the lower quartile against the FTSE 50.
Overall, fees remain moderately positioned relative to similar FTSE100 companies. Fees for FY2026 will be:
Chair fee:
£320,000 plus £90,000 in 3i shares
Non-executive Directors:
Board membership base fee:
£58,750 plus £17,650 in 3i shares
Senior Independent Director fee:
£20,000
Committee Chair:
£25,000
Committee member:
£10,000
Committee fees are payable in respect of the Audit and Compliance Committee, Remuneration Committee
and Valuations Committee.
Malus and
clawback policy
Long-term incentive awards and deferred bonus share awards made during the year to Executive Directors may be
forfeited or reduced in exceptional circumstances, on such basis as the Committee considers to be fair, reasonable
and proportionate, taking into account an individual’s role and responsibilities. Such exceptional circumstances
include:
(1) a material misstatement in the financial statements of the Company or Group or any Member of the Group; or
(2) where an individual has caused, wholly or in part, a material loss for the Group as a result of:
(i) reckless, negligent or wilful actions or omissions; or
(ii) inappropriate values or behaviour;
(3) an error in assessing any applicable Performance Conditions or the number of shares;
(4) the assessment of any applicable Performance Conditions and/or the number of shares to be released being
based on inaccurate or misleading information;
(5) misconduct on the part of the individual concerned;
(6) a Member of the Group is censured by a regulatory body or suffers a significant detrimental impact on its
reputation, provided that the Committee determines that the individual was responsible for, or had management
oversight over, the actions, omissions or behaviour that gave rise to that censure or detrimental impact; or
(7) the Company (or entities representing a material proportion of the Group) becomes insolvent or otherwise suffers
a corporate failure so that ordinary shares in the Company cease to have material value, provided that the
individual is responsible (in whole or in part) for that insolvency or failure.
In exceptional circumstances (and on such basis as the Committee considers fair, reasonable and proportionate taking
into account an individual’s role and responsibilities), the Group may recover amounts that have been paid or released
from awards (including cash bonus awards), as long as a written request for the recovery of such sums is made in the
two-year period from the date of payment or release and in circumstances where either (a) there has been a material
misstatement of Group financial statements or (b) the Group suffers a material loss. In arriving at its decision,
the Committee will take into consideration such evidence as it may reasonably consider relevant including as to
the impact of the affected individual’s conduct, values or behaviours on the material misstatement or material loss,
as the case may be.
Policy element
Implementation of policy during FY2026
Governance
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Remuneration Committee advisers
The Committee appointed Deloitte LLP as advisers in 2013 and during the year they provided the Committee with external, independent
advice.
Deloitte LLP are members of the Remuneration Consultants Group and, as such, voluntarily operate under the code of conduct in relation to
executive remuneration consulting in the UK. During the year, Deloitte LLP also provided 3i with certain tax advisory services. The Committee
has reviewed the advice provided during the year and is satisfied that it has been objective and independent. The total fees for advice during
the year were £84,000 (excluding VAT) (2024 £50,250 (excluding VAT)).
Result of voting at the 2024 AGM
At the 2024 AGM, shareholders approved the Remuneration report that was published in the 2024 Annual report and accounts. At the 2023
AGM, shareholders approved the Directors’ remuneration policy. The results for both of these votes are shown below:
Resolution
Votes for
Votes against
Total votes cast
Votes withheld
Approval of the Directors’ remuneration report at the 2024 AGM
754,025,105
28,637,438
782,662,543
153,692
96.34%
3.66%
Approval of the Directors’ remuneration policy at the 2023 AGM
717,765,664
37,374,379
755,140,043
7,253,538
95.05%
4.95%
Audit
The tables in this report (including the Notes thereto) on pages 135 to 147 marked as “audited” have been audited by KPMG.
By order of the Board
Coline McConville
Chair, Remuneration Committee
14 May 2025
Governance
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This section of the Directors’ report contains the
corporate governance statement required by FCA
Disclosure Guidance and Transparency Rule 7.2.
Corporate governance
The Corporate Governance Code to which the Company is subject
in relation to FY2025 is the UK Corporate Governance Code 2018
(the “Code”), which was published by the FRC in July 2018 and is
available on the FRC website. (The revised UK Corporate Governance
Code 2024 which was published in January 2024 will apply to the
Company in relation to FY2026).
Details on the Company’s compliance with the Code and an
explanation as to why the Company has not complied throughout
the year with provision 19 of the Code in respect of Chair tenure are
set out in the Corporate Governance statement on pages 99 and 100
and in the report on the Nominations Committee’s review of Chair
tenure on page 117.
The Group’s internal control and risk management systems, including
those in relation to the financial reporting process, are described
in the Risk management section on pages 80 to 93.
Directors: independence and time commitments
Directors’ biographical details are set out on pages 102 and 103.
The Board currently comprises the Chair, six non-executive Directors
and three Executive Directors. Mr D A M Hutchison (Chair), Mr S A
Borrows, Mr J G Hatchley, Ms J H Halai, Mr S W Daintith, Ms L M S
Knox, Mr P A McKellar, Ms C L McConville and Ms A Schaapveld all
served as Directors throughout the year under review. Mr H K Patel
served as a Director from 3 February 2025.
The Board regularly considers the independence of non-executive
Directors. The Board considers all of the Company’s non-executive
Directors to be independent for the purposes of the Code. The Chair
was independent on appointment as Chair. Consideration was also
given to time commitments when Directors seek to take on any
additional external appointments and on any Director’s appointment.
Investment policy
The UK Listing Authority’s Listing Rules require 3i, as a closed-
ended investment fund, to publish an investment policy.
Shareholder approval is required for material changes to this policy.
Non-material changes can be made by the Board. The current
policy is set out below. No changes have been made to the policy
since it was published in the Company’s 2018 Report and Accounts.
• 3i is an investment company which aims to provide its
shareholders with quoted access to private equity and
infrastructure returns. Currently, its main focus is on making
quoted and unquoted equity and/or debt investments in
businesses and funds in Europe, Asia and the Americas.
The geographies, economic sectors, funds and asset classes
in which 3i invests continue to evolve as opportunities are
identified. Proposed investments are assessed individually and
all significant investments require approval from the Group’s
Investment Committee. Overall investment targets are subject
to periodic reviews and the investment portfolio is also reviewed
to monitor exposure to specific geographies, economic sectors
and asset classes.
• 3i seeks to diversify risk through significant dispersion of
investments by geography, economic sector, asset class and size
as well as through the maturity profile of its investment portfolio.
• Although 3i does not set maximum exposure limits for asset
allocations, it does have a maximum exposure limit that, save
as mentioned below, no investment will be made unless its cost1
does not exceed 15% of the investment portfolio value as shown
in the last published valuation. A further investment may be
made in an existing portfolio business provided the aggregate
cost of that investment and of all other unrealised investments
in that portfolio business does not exceed 15% of the investment
portfolio value as shown in the last published valuation. A higher
limit of 30% will apply to the Company’s investment in 3i
Infrastructure plc. For the avoidance of doubt, 3i may retain
an investment, even if its carrying value is greater than 15%
or 30% (as the case may be) of the portfolio value at the time
of an updated valuation.
• Investments are generally funded with a mixture of debt
and shareholders’ funds with a view to maximising returns
to shareholders, whilst maintaining a strong capital base.
3i’s gearing depends not only on its level of debt, but also
on the impact of market movements and other factors on
the value of its investments. The Board takes this into account
when, as required, it sets a precise maximum level of gearing.
The Board has therefore set the maximum level of gearing at
150% and has set no minimum level of gearing. If the gearing
ratio should exceed the 150% maximum limit, the Board
will take steps to reduce the gearing ratio to below that limit
as soon as practicable thereafter. 3i is committed to achieving
balance sheet efficiency.
1
Where 3i makes an investment in an existing portfolio business as part of a restructuring or reorganisation of its investment in that existing portfolio business (which restructuring or reorganisation may involve, without
limitation, 3i disposing of all or part of its existing investment in the relevant portfolio business and reinvesting all or part of the proceeds into a different entity which acquires or holds the relevant portfolio business or a
substantial part thereof), the cost of that investment, for the purposes of determining the maximum exposure limit under this policy, shall, to the extent that the investment does not increase 3i’s exposure to the relevant
portfolio business, be deemed to be the cost of 3i’s existing investment in the relevant portfolio business (or, in the case of a partial reinvestment, the pro-rated cost of 3i’s existing investment in the relevant portfolio
business) immediately prior to the restructuring or reorganisation. If 3i’s investment includes a further investment, such that 3i increases its overall exposure to the relevant portfolio business as part of the restructuring
or reorganisation, the cost of any such further investment at the date of such investment shall be added to the cost of the investment in the existing portfolio business as determined pursuant to the previous sentence.
Governance
Additional statutory and corporate governance information
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Appointment and re-election of Directors
Subject to the Company’s Articles of Association, the Companies
Act and satisfactory performance evaluation, non-executive
Directors are appointed for an initial three-year term. Before the
third and sixth anniversaries of first appointment, the Director
discusses with the Board whether it is appropriate for a further
three-year term to be served.
Under the Company’s Articles of Association, the minimum number
of Directors is two and the maximum is 20, unless otherwise
determined by the Company by ordinary resolution. Directors are
appointed by ordinary resolution of shareholders or by the Board.
The Company’s Articles of Association provide for all Directors to
retire from office at every Annual General Meeting of the Company
although they may offer themselves for re-appointment by the
shareholders.
Shareholders can remove any Director by special resolution and
appoint another person to be a Director in their place by ordinary
resolution. Shareholders can also remove any Director by ordinary
resolution of which special notice has been given.
Subject to the Company’s Articles of Association, retiring Directors
are eligible for re-appointment. The office of Director is vacated
if the Director resigns, becomes bankrupt or is prohibited by law
from being a Director or where the Board so resolves following
the Director suffering from ill health or being absent from Board
meetings for 12 months without the Board’s permission.
The Board’s responsibilities and processes
The composition of the Board and its Committees, as well as
the Board’s key responsibilities and the way in which it and its
Committees work, are described on pages 97 to 147. The Board
is responsible to shareholders for the overall management of the
Group and may exercise all the powers of the Company subject
to the provisions of relevant statutes, the Company’s Articles of
Association and any directions given by special resolution of the
shareholders. The Articles of Association empower the Board
to offer, allot, grant options over or otherwise deal with or dispose
of the Company’s shares as the Board may decide.
The Companies Act 2006 authorises the Company to make market
purchases of its own shares if the purchase has first been authorised
by a resolution of the Company.
At the AGM in June 2024, shareholders renewed the Board’s
authority to allot ordinary shares and to repurchase ordinary shares
on behalf of the Company subject to certain limits. Details of the
authorities which the Board will be seeking at the 2025 AGM are
set out in the 2025 Notice of AGM.
The Board’s diversity policies in relation to Directors are described
in the Nominations Committee report on page 118 and such policies
in relation to employees are described on pages 151 and 152.
Matters reserved for the Board
The Board has approved a formal schedule of matters reserved
to it and its duly authorised Committees for decision. These include
matters such as the Group’s overall strategy, strategic plan and
annual operating budget; approval of the Company’s financial
statements and changes to accounting policies or practices;
changes to the capital structure or regulated status of the
Company; major capital projects or changes to business
operations; investments and divestments above certain limits;
policy on borrowing, gearing, hedging and treasury matters;
and adequacy of internal control systems.
Rights and restrictions attaching to shares
A summary of the rights and restrictions attaching to shares as at
31 March 2025 is set out below.
The Company’s Articles of Association may be amended by special
resolution of the shareholders in a general meeting. Holders of
ordinary shares enjoy the rights set out in the Articles of Association
of the Company and under the laws of England and Wales. Any share
may be issued with or have attached to it such rights and restrictions
as the Company by ordinary resolution or, failing such resolution,
the Board may decide.
Holders of ordinary shares are entitled to attend, speak and vote
at general meetings and to appoint proxies and, in the case of
corporations, corporate representatives to attend, speak and vote
at such meetings on their behalf. To attend and vote at a general
meeting a shareholder must be entered on the register of members
at such time (not being earlier than 48 hours before the meeting)
as stated in the Notice of general meeting. On a poll, holders
of ordinary shares are entitled to one vote for each share held.
Holders of ordinary shares are entitled to receive the Company’s
Annual report and accounts, to receive such dividends and other
distributions as may lawfully be paid or declared on such shares
and, on any liquidation of the Company, to share in the surplus assets
of the Company after satisfaction of the entitlements of the holders
of any shares with preferred rights as may then be in issue.
There are no restrictions on the transfer of fully paid shares in the
Company, save that the Board may decline to register: a transfer
of uncertificated shares in the circumstances set out in the
Uncertificated Securities Regulations 2001; a transfer to more than
four joint holders; a transfer of certificated shares which is not in
respect of only one class of share; a transfer which is not
accompanied by the certificate for the shares to which it relates;
a transfer which is not duly stamped in circumstances where a duly
stamped instrument is required; or a transfer where in accordance
with section 794 of the Companies Act 2006 a notice (under section
793 of that Act) has been served by the Company on a shareholder
who has then failed to give the information required within the
specified time.
In the latter circumstances, the Company may make the relevant
shares subject to certain restrictions (including in respect of the ability
to exercise voting rights, to transfer the shares validly and, except in
the case of a liquidation, to receive the payment of sums due from
the Company).
Governance
Additional statutory and corporate governance information continued
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There are no shares carrying special rights with regard to control
of the Company. There are no restrictions placed on voting rights
of fully paid shares, save where in accordance with Article 12 of
the Company’s Articles of Association a restriction notice has been
served by the Company in respect of shares for failure to comply with
statutory notices or where a transfer notice (as described below) has
been served in respect of shares and has not yet been complied with.
Where shares are held on behalf of former or current employees
under employee share schemes, those participants can give
instructions to the holder of such shares as to how votes attached
to such shares should be exercised.
In the circumstances specified in Article 38 of the Company’s Articles
of Association, the Company may serve a transfer notice on holders
of shares. The relevant circumstances relate to: (a) potential tax
disadvantage to the Company, (b) the number of “United States
Residents” who own or hold shares being 75 or more, or (c) the
Company being required to be registered as an investment company
under relevant US legislation. The notice would require the transfer
of relevant shares and, pending such transfer, the rights and
privileges attaching to those shares would be suspended.
The Company is not aware of any agreements between holders
of its securities that may restrict the transfer of shares or exercise
of voting rights.
Share capital and debentures
The issued ordinary share capital of the Company as at 1 April 2024
was 973,366 ,445 ordinary shares and at 31 March 2025 was
973,398,978 ordinary shares of 73 19∕22 pence each. It increased
over the year by 32,533 ordinary shares on the issue of shares
to the Trustee of the 3i Group Share Incentive Plan.
At the AGM on 27 June 2024 the Directors were authorised to
repurchase up to 97,000,000 ordinary shares in the Company
(representing approximately 10% of the Company’s issued ordinary
share capital as at 6 May 2024) until the Company’s AGM in 2025 or
26 September 2025, if earlier. This authority was not exercised in the
year. Details of the authorities which the Board will be seeking at the
2025 AGM are set out in the 2025 Notice of AGM.
As at 31 March 2025, the Company had sterling and euro fixed rate
notes in issue as detailed in Note 16 to the accounts.
The Articles of Association also specifically empower the Board
to exercise the Company’s powers to borrow money and to
mortgage or charge the Company’s assets and any uncalled
capital and to issue debentures and other securities.
Portfolio management and voting policy
In relation to unquoted investments, the Group’s approach is to seek
to add value to the businesses in which the Group invests through
the Group’s extensive experience, resources and contacts and
through active engagement with the Boards of those companies.
In relation to quoted investments, the Group’s policy is to exercise
voting rights on all matters affecting its interests.
Tax and investment company status
The Company is an investment company under section 833 of
the Companies Act 2006. HM Revenue & Customs has approved
the Company as an Investment Trust under section 1158 of the
Corporation Tax Act 2010 and the Company directs its affairs
to enable it to continue to remain so approved.
Where appropriate, the Company looks to the provisions included
within the Association of Investment Companies SORP.
Major interests in ordinary shares
The table below shows notifications of major voting interests in
the Company’s ordinary share capital (notifiable in accordance with
Chapter 5 of the FCA’s Disclosure Guidance and Transparency Rules
or section 793 Companies Act 2006) that had been received
by the Company as at 31 March 2025 and 15 April 2025.
As at
31 March
2025
% of
issued
share
capital
As at
15 April
2025
% of
issued
share
capital
BlackRock, Inc
103,161,680 10.60 104,039,896 10.69
The Capital Group
Companies, Inc
61,665,728
6.34 67,683,107
6.95
Fidelity Management &
Research Company
58,282,778
5.99 58,728,243
6.03
WCM Investment
Management, LLC
47,295,459
4.86 47,350,398
4.86
Vanguard Group, Inc
45,922,480
4.72 45,922,480
4.72
3i Investments plc
3i Investments plc is authorised by the FCA to, among other things,
manage Alternative Investment Funds (“AIFs”). It is currently the
Alternative Investment Fund Manager (“AIFM”) of seven AIFs,
including the Company and 3i Infrastructure plc. In compliance
with regulatory requirements, 3i Investments plc has ensured that
a depository has been appointed for each AIF. This is Citibank
UK Limited.
The Annual report and accounts meet certain investor disclosure
requirements as set out in FUND 3.2.2R, 3.2.3R, 3.2.5R and 3.2.6R
of the FCA’s Investment Funds sourcebook (“FUND Disclosures”)
for the Company as a standalone entity. The Company’s profit for
the year is stated in its Company statement of changes in equity
on page 157 and its financial position is shown on page 156.
The Company performs substantially all of its investment-related
activities through its subsidiaries and therefore the Group’s
Consolidated statement of comprehensive income is considered
to be more useful to investors than a Company statement.
Furthermore, in some instances the relevant FUND Disclosures
have been made in relation to the Group on a consolidated basis
rather than in respect of the Company on a solo basis. This is because
the Company operates through its Group subsidiaries and therefore
reporting on the Group’s activities provides more relevant
information on the Company and its position. There have been
no material changes to the disclosures required to be made
under FUND 3.2.2R in the past year.
Governance
Additional statutory and corporate governance information continued
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Although certain FUND Disclosures are made in this Annual report,
full disclosures are summarised on the 3i website at www.3i.com.
This will be updated as required and changes noted in future
Annual reports.
For the purposes of the FUND Disclosures set out in FUND 3.3.5(R)
(5) and (6), the total amount of remuneration paid by the AIFM to its
staff for the year to 31 March 2025 was £241 million, of which
£48 million was fixed remuneration and £193 million was variable
remuneration. The total number of beneficiaries is 216.
The aggregate total remuneration paid to AIFM Remuneration
Code Staff for the year to 31 March 2025 was £81 million, of which
£47 million was paid to senior management and £34 million was paid
to other AIFM Remuneration Code Staff. A summary of the
remuneration policy of 3i can be found on the Company’s website.
Dividends
A first FY2025 dividend of 30.5 pence per ordinary share in respect
of the year to 31 March 2025 was paid on 10 January 2025.
The Directors recommend a second FY2025 dividend of 42.5 pence
per ordinary share be paid in respect of the year to 31 March 2025
to shareholders on the Register at the close of business
on 20 June 2025.
The trustee of The 3i Group Employee Trust and the trustee
of the 2010 Carry Trust have each waived (subject to certain minor
exceptions) dividends declared on shares in the Company held
by those trusts and the trustee of The 3i Group Share Incentive
Plan has waived dividends on unallocated shares in the Company
held by it.
Directors’ conflicts of interests, external
appointments and indemnities
Directors have a statutory duty to avoid conflicts of interest with the
Company. The Company’s Articles of Association enable Directors
to approve conflicts of interest and include other conflict of interest
provisions. The Company has implemented processes to identify
potential and actual conflicts of interest. Such conflicts are then
considered for approval by the Board, subject, if necessary,
to appropriate conditions.
The Board has adopted a policy on Directors’ other appointments
under which additional external appointments should not be
undertaken without prior approval of the Board. Executive Directors
should not take on more than one non-executive directorship in
a FTSE 100 company or other significant appointment.
As permitted by the Company’s Articles of Association during the
year and as at the date of this Directors’ report, there were in place
Qualifying Third-Party Indemnity Provisions (as defined under
relevant legislation) for the benefit of the Company’s Directors
and Qualifying Pension Scheme Indemnity Provisions for the benefit
of the directors of one associated company, Gardens Pension
Trustees Limited.
Directors’ employment contracts
Mr S A Borrows, Ms J H Halai and Mr J G Hatchley each have
employment contracts with the Group with notice periods
of 12 months where notice is given by the Group and six months
where notice is given by the Director. Save for these notice periods
their employment contracts have no unexpired terms. None of
the other Directors has a service contract with the Company.
Employment
The employment policy of the Group is one of equal opportunity
in the selection, training, career development and promotion of
employees, regardless of age, gender, sexual orientation, ethnic
origin, religion and whether disabled or otherwise. Further details
on equal opportunities and diversity are included in the Sustainability
report on pages 52 to 55 and in the Nominations Committee report
on page 118.
3i treats applicants and employees with disabilities fairly and provides
facilities, equipment and training to assist disabled employees to do
their jobs. Arrangements are made as necessary to ensure support
to job applicants who happen to be disabled and who respond
to requests to inform the Company of any requirements. Should an
employee become disabled during their employment, efforts would
be made to retain them in their current employment or to explore the
opportunities for their retraining or redeployment within 3i. Financial
support is also provided by 3i to support disabled employees who
are unable to work, as appropriate to local market conditions.
3i’s principal means of keeping in touch with the views of its
employees is through employee appraisals, informal consultations,
team briefings and employee conferences. Managers throughout 3i
have a continuing responsibility to keep their staff informed of
developments and to communicate financial results and other
matters of interest. This is achieved by structured communication
including regular meetings of employees. Members of the Board
have regular formal and informal interaction with a significant number
of 3i employees, including through office visits and one-to-one
meetings.
3i is an equal opportunities employer and has clear grievance and
disciplinary procedures in place. 3i also has an employee assistance
programme which provides a confidential, free and independent
counselling service and is available to all UK employees and their
families in the UK.
3i’s employment policies are designed to provide a competitive
reward package which will attract and retain high-quality staff, whilst
ensuring that the relevant costs remain at an appropriate level.
3i’s remuneration policy is influenced by 3i’s financial and other
performance conditions and market practices in the countries in
which it operates. All employees receive a base salary and are also
eligible to be considered for a performance-related annual variable
incentive award. For those members of staff receiving higher levels
of annual variable incentive awards, a proportion of such awards is
delivered in 3i shares, vesting over a number of years. Remuneration
policy is reviewed by the 3i Group plc Remuneration Committee,
comprising 3i Group plc non-executive Directors.
Where appropriate, employees are eligible to participate in 3i share
schemes to encourage employees’ involvement in 3i’s performance.
Investment executives in the Private Equity business line may also
participate in carried interest schemes, which allow executives to
share directly in future profits on investments. Similarly, investment
executives in the Infrastructure business line may participate in asset-
linked and/or fee-linked incentive arrangements. Employees
participate in local state or company pension schemes as
appropriate to local market conditions.
Governance
Additional statutory and corporate governance information continued
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Employees are able to raise in confidence with the Company any
matters of concern. Issues can be raised with line management, the
Internal Audit team and the Human Resources team as appropriate.
Employees can also raise matters with an externally run confidential
telephone reporting line and can do so anonymously if they wish.
Matters raised are investigated and followed up as appropriate.
The Board monitors any matters reported to the externally run
telephone reporting line, through an annual report to Audit and
Compliance Committee from Internal Audit.
Workforce engagement
The Company has a Staff Engagement strategy which has been
adopted by the Board as the most appropriate way for the Company
to comply with the relevant requirements of the Code. This is in
preference to adopting one of the three workforce engagement
examples specifically mentioned in the UK Corporate Governance
Code. The Board believes this strategy is appropriate and
proportionate in the context of an office-based workforce, with in the
region of 250 employees worldwide, all of whom engage regularly
with members of senior management. Senior management and
members of the Board meet formally and informally with staff in a
variety of contexts, including office visits, investment reviews, Board
and Committee presentations and Board dinners with investment
teams. A general open door policy (whether physically or virtually)
adopted by senior management encourages interaction with staff.
The Human Resources team are a point of contact for all members
of staff and they, as well as line managers, report issues requiring
management attention to senior management as they occur. The
Internal Audit and Group Compliance teams consider employee
matters including culture, compliance with the Company’s values
and staff turnover in their reports to senior management. The formal
annual appraisal process provides a further opportunity for
engagement.
During the year, the Board visited 3i’s Amsterdam and Frankfurt
offices and met formally and informally with the teams based there.
Directors receive updates on employee matters in presentations from
the business line heads, as well as from the Chief Human Resources
Officer, in the annual Board consideration of the Group Succession
Planning and Strategic Capability Review. Committee Chairs held a
number of private and other meetings with function heads during the
year. Non-executive Directors also meet with a wide range of
members of the investment teams at the twice-yearly PCR meetings.
Diversity and inclusion policy
Details of the Company’s approach to diversity and inclusion are set
out under the heading Employment on page 151, in the Sustainability
section on pages 52 to 55 and in the Nominations Committee report
on page 118.
Political donations
In line with Group policy, during the year to 31 March 2025,
no donations were made to political parties or organisations,
or independent election candidates, and no political expenditure
was incurred, (31 March 2024: none).
Share reunification programme
The Board approved a programme to reunify shareholders with their
dormant shareholdings. A tracing programme was conducted by the
Registrar during 2023 and 2024 to attempt to contact dormant
shareholders. Where this was not possible and in accordance with the
Company’s Articles of Association, the relevant shares were sold and
the proceeds returned to 3i. The shareholder or their personal
representatives have six years from the date of sale in which to claim
the proceeds of sale. Unclaimed dividends associated with the shares
sold were also returned to 3i and shareholders or their personal
representatives have 12 years from when the dividend was declared
or became due in which to make a claim. Dividends which have been
unclaimed for 12 years are forfeited, unless the Board decides
otherwise. The Board agreed that a sum equal to the majority of the
funds returned to 3i in this programme would be used for charitable
purposes, with the balance kept to meet claims.
Significant agreements
As at 31 March 2025, the Company was party to one agreement
subject to a renegotiation period on a change of control of the
Company following a takeover bid. This agreement is a £900 million
multi-currency Revolving Credit Facility Agreement dated 13 March
2020 and as amended from time to time between the Company,
Barclays Bank PLC and a number of other banks. The Company is
required to promptly notify Barclays Bank PLC, as agent bank, of
a change of control. This opens a 20-day negotiation period to
determine if each lender is willing to continue participating in the
facility. For any lender with whom no agreement is reached, amounts
outstanding to that lender would be repayable and their
commitment cancelled, with no less than 10 business days’ notice
after the end of the negotiation period.
Internal control and risk management systems
A description of the Group’s internal control and risk management
systems in relation to the financial reporting process is set out in the
Risk management section on pages 80 to 93.
Going concern
The Directors have acknowledged their responsibilities in relation
to the financial statements for the year to 31 March 2025.
After making enquiries, the Directors considered it appropriate
to prepare the financial statements of the Company, and the Group,
on a going concern basis. The Viability statement is included
on pages 128 and 129.
Audit information
Pursuant to section 418(2) of the Companies Act 2006, each
of the Directors confirms that:
• so far as they are aware, there is no relevant audit information
of which the Company’s Auditor is unaware; and
• they have taken all steps they ought to have taken to make
themselves aware of any relevant audit information and to establish
that the Company’s Auditor is aware of such information.
Appointment of Auditor
In accordance with section 489 of the Companies Act 2006,
a resolution proposing the reappointment of KPMG LLP as the
Company’s Auditor will be put to members at the forthcoming AGM.
Governance
Additional statutory and corporate governance information continued
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Information required by Listing Rule 6.6.4
Information required by Listing Rule 6.6.4 not included in this section
of the Directors’ report may be found as set out below:
Topic
Location
Capitalised interest
Portfolio income on page 71
Share allotments
Note 19 on page 183
Website
3i’s website provides a brief description of 3i’s history, current operations,
strategy and portfolio, as well as articles, interviews and videos to
showcase specific themes and investments. It also includes an archive of
over 10 years of news and historical financial information on the Group
and details of forthcoming events for shareholders and analysts.
Information included in the Strategic report
In accordance with section 414 C (11) of the Companies Act 2006,
the following information otherwise required to be set out in the
Directors’ report has been included in the Strategic report: risk
management objectives and policies; post-balance sheet events;
likely future developments in the business; engagement with
suppliers, customers and others; employee involvement; and
greenhouse gas emissions. The Directors’ Viability statement
is also shown in the Resilience statement on pages 127 to 129.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual report
and the Group and parent Company financial statements for each
financial year in accordance with applicable United Kingdom law
and regulations. They are required to prepare the Group financial
statements in accordance with UK adopted international accounting
standards and applicable law and have elected to prepare the parent
Company financial statements on the same basis.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and parent Company and of their
profit or loss for that period. In preparing each of the Group and
parent Company financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable, relevant
and reliable;
• state whether they have been prepared in accordance with UK-
adopted international accounting standards and applicable law;
• assess the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related
to going concern; and
• use the going concern basis of accounting unless they either
intend to liquidate the Group, or the parent Company, or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the parent Company and enable them to ensure
that its financial statements comply with the Companies Act 2006.
They are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error, and
have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic report, Directors’ report,
Directors’ remuneration report and Corporate governance statement
that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company’s
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Responsibility statement of the Directors in respect
of the Annual financial report
The Directors confirm that to the best of their knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation
taken as a whole; and
• the Strategic report includes a fair review of the development
and performance of the business and the position of the Company
and the undertakings included in the consolidation taken
as a whole, together with a description of the principal risks
and uncertainties that they face.
The Directors consider this Annual report and accounts, taken
as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
The Directors of the Company and their functions are listed on pages
102 and 103.
3i Group plc is registered in England with company number 1142830.
Directors’ report
For the purposes of the UK Companies Act 2006, the Directors’
report of 3i Group plc comprises the Governance section on pages
96 to 153 other than the Directors’ remuneration report on pages 135
to 147.
The Strategic report, Directors’ report and Directors’ remuneration
report have been drawn up and presented in accordance with and in
reliance upon English company law and the liabilities of the Directors
in connection with those reports shall be subject to the limitations
and restrictions provided by that law.
By order of the Board
K J Dunn
Company Secretary
14 May 2025
Registered office:
1 Knightsbridge
London SW1X 7LX
Governance
Additional statutory and corporate governance information continued
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What’s in this section
Consolidated statement of comprehensive income
155
Consolidated statement of financial position
156
Consolidated statement of changes in equity
157
Consolidated cash flow statement
158
Company statement of financial position
159
Company statement of changes in equity
160
Company cash flow statement
161
Material accounting policies
162
Notes to the accounts
166
KPMG LLP’s independent auditor’s report
199
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154
Audited financial
statements
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Notes
2025
£m
2024
£m
Realised profits over value on the disposal of investments
2
5
1
Unrealised profits on the revaluation of investments
3
3,812
2,742
Fair value movements on investment entity subsidiaries
12
953
861
Portfolio income
Dividends
413
363
Interest income from investment portfolio
29
29
Fees receivable
4
13
3
Foreign exchange on investments
(245)
(238)
Movement in the fair value of derivatives
17
82
116
Gross investment return
5,062
3,877
Fees receivable from external funds
4
64
72
Operating expenses
5
(149)
(146)
Interest receivable
15
9
Interest payable
(65)
(61)
Exchange movements
77
52
Income from investment entity subsidiaries
21
21
Other (expense)/income
(1)
3
Operating profit before carried interest
5,024
3,827
Carried interest
Carried interest and performance fees receivable
29
62
Carried interest and performance fees payable
14
(14)
(51)
Operating profit before tax
5,039
3,838
Tax charge
8
(1)
(2)
Profit for the year
5,038
3,836
Other comprehensive income that may be reclassified to the income statement
Exchange differences on translation of foreign operations
7
(4)
Other comprehensive income that will not be reclassified to the income statement
Re-measurements of defined benefit plans
25
4
7
Other comprehensive income for the year
11
3
Total comprehensive income for the year
5,049
3,839
Earnings per share
Basic (pence)
9
522.0
397.9
Diluted (pence)
9
520.6
396.7
The Notes to the accounts section forms an integral part of these financial statements.
Audited financial statements
Consolidated statement of comprehensive income
for the year to 31 March
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Assets
Non-current assets
Investments
Quoted investments
11,13
856
879
Unquoted investments
11,13
17,500
14,193
Investments in investment entity subsidiaries
12,13
6,916
5,804
Investment portfolio
25,272
20,876
Carried interest and performance fees receivable
–
3
Other non-current assets
15
27
28
Intangible assets
2
4
Retirement benefit surplus
25
63
61
Property, plant and equipment
18
4
Right of use asset
41
49
Derivative financial instruments
17
46
83
Total non-current assets
25,469
21,108
Current assets
Carried interest and performance fees receivable
33
45
Other current assets
15
49
47
Current income taxes
2
1
Derivative financial instruments
17
91
82
Cash and cash equivalents
412
358
Total current assets
587
533
Total assets
26,056
21,641
Liabilities
Non-current liabilities
Trade and other payables
18
(6)
(5)
Carried interest and performance fees payable
14
(29)
(30)
Loans and borrowings
16
(1,194)
(1,202)
Derivative financial instruments
17
(4)
–
Retirement benefit deficit
25
(17)
(21)
Lease liability
(42)
(45)
Deferred income taxes
8
(1)
(1)
Provisions
(2)
(2)
Total non-current liabilities
(1,295)
(1,306)
Current liabilities
Trade and other payables
18
(133)
(134)
Carried interest and performance fees payable
14
(12)
(24)
Lease liability
(3)
(4)
Current income taxes
(1)
(3)
Provisions
(1)
–
Total current liabilities
(150)
(165)
Total liabilities
(1,445)
(1,471)
Net assets
24,611
20,170
Equity
Issued capital
19
719
719
Share premium
792
791
Capital redemption reserve
43
43
Share-based payment reserve
26
35
42
Translation reserve
1
(6)
Capital reserve
21,257
17,154
Revenue reserve
1,845
1,519
Own shares
20
(81)
(92)
Total equity
24,611
20,170
Notes
2025
£m
2024
£m
The Notes to the accounts section forms an integral part of these financial statements.
David Hutchison
Chair
14 May 2025
Audited financial statements
Consolidated statement of financial position
as at 31 March
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2025
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Share-
based
payment
reserve
£m
Translation
reserve
£m
Capital
reserve1
£m
Revenue
reserve1
£m
Own
shares
£m
Total
equity
£m
Total equity at the start of the year
719
791
43
42
(6)
17,154
1,519
(92)
20,170
Profit for the year
–
–
–
–
–
4,535
503
–
5,038
Exchange differences on translation of foreign
operations
–
–
–
–
7
–
–
–
7
Re-measurements of defined benefit plans
–
–
–
–
–
4
–
–
4
Total comprehensive income for the year
–
–
–
–
7
4,539
503
–
5,049
Share-based payments
–
–
–
16
–
–
–
–
16
Release on exercise/forfeiture of share awards
–
–
–
(23)
–
–
23
–
–
Exercise of share awards
–
–
–
–
–
(11)
–
11
–
Ordinary dividends
–
–
–
–
–
(425)
(200)
–
(625)
Issue of ordinary shares
–
1
–
–
–
–
–
–
1
Total equity at the end of the year
719
792
43
35
1
21,257
1,845
(81)
24,611
1
Refer to Note 19 for the nature of the capital and revenue reserves.
2024
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Share-
based
payment
reserve
£m
Translation
reserve
£m
Capital
reserve1
£m
Revenue
reserve1
£m
Own
shares
£m
Total
equity
£m
Total equity at the start of the year
719
790
43
31
(2)
14,044
1,327
(108)
16,844
Profit for the year
–
–
–
–
–
3,309
527
–
3,836
Exchange differences on translation of foreign
operations
–
–
–
–
(4)
–
–
–
(4)
Re-measurements of defined benefit plans
–
–
–
–
–
7
–
–
7
Total comprehensive income for the year
–
–
–
–
(4)
3,316
527
–
3,839
Share-based payments
–
–
–
27
–
–
–
–
27
Release on exercise/forfeiture of share awards
–
–
–
(16)
–
–
16
–
–
Exercise of share awards
–
–
–
–
–
(16)
–
16
–
Ordinary dividends
–
–
–
–
–
(190)
(351)
–
(541)
Issue of ordinary shares
–
1
–
–
–
–
–
–
1
Total equity at the end of the year
719
791
43
42
(6)
17,154
1,519
(92)
20,170
1
Refer to Note 19 for the nature of the capital and revenue reserves.
The Notes to the accounts section forms an integral part of these financial statements.
Audited financial statements
Consolidated statement of changes in equity
for the year to 31 March
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Notes
2025
£m
2024
£m
Cash flow from operating activities
Purchase of investments
(150)
(506)
Proceeds from investments
1,107
543
Amounts paid to investment entity subsidiaries
12
(1,537)
(674)
Amounts received from investment entity subsidiaries
12
865
580
Net cash flow from derivatives
113
69
Portfolio interest received
6
5
Portfolio dividends received
420
366
Portfolio fees received
7
12
Fees received from external funds
65
74
Carried interest and performance fees received
44
58
Carried interest and performance fees paid
14
(23)
(53)
Operating expenses paid
(122)
(121)
Co-investment loans (paid)/received
(35)
5
Tax paid
(3)
(3)
Other cash income
1
2
Other cash expenses
(10)
–
Interest received
15
9
Net cash flow from operating activities
763
366
Cash flow from financing activities
Issue of shares
1
1
Dividends paid
10
(625)
(541)
Proceeds from long-term borrowing
16
–
422
Lease payments
16
(6)
(6)
Interest paid
(60)
(40)
Net cash flow from financing activities
(690)
(164)
Cash flow from investing activities
Purchases of property, plant and equipment
(16)
(3)
Net cash flow from investing activities
(16)
(3)
Change in cash and cash equivalents
57
199
Cash and cash equivalents at the start of the year
358
162
Effect of exchange rate fluctuations
(3)
(3)
Cash and cash equivalents at the end of the year
412
358
The Notes to the accounts section forms an integral part of these financial statements.
Audited financial statements
Consolidated cash flow statement
for the year to 31 March
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Assets
Non-current assets
Investments
Quoted investments
11,13
856
879
Unquoted investments
11,13
17,500
14,193
Investment portfolio
18,356
15,072
Carried interest and performance fees receivable
–
5
Interests in Group entities
22
6,642
5,877
Other non-current assets
15
15
16
Derivative financial instruments
17
46
83
Total non-current assets
25,059
21,053
Current assets
Carried interest and performance fees receivable
6
71
Other current assets
15
3
9
Derivative financial instruments
17
91
82
Cash and cash equivalents
381
328
Total current assets
481
490
Total assets
25,540
21,543
Liabilities
Non-current liabilities
Loans and borrowings
16
(1,194)
(1,202)
Derivative financial instruments
17
(4)
–
Total non-current liabilities
(1,198)
(1,202)
Current liabilities
Trade and other payables
18
(75)
(760)
Total current liabilities
(75)
(760)
Total liabilities
(1,273)
(1,962)
Net assets
24,267
19,581
Equity
Issued capital
19
719
719
Share premium
792
791
Capital redemption reserve
43
43
Share-based payment reserve
26
35
42
Capital reserve
21,947
17,685
Revenue reserve
812
393
Own shares
20
(81)
(92)
Total equity
24,267
19,581
Notes
2025
£m
2024
£m
The Company profit for the year to 31 March 2025 is £5,294 million (2024: £3,844 million).
The Notes to the accounts section forms an integral part of these financial statements.
David Hutchison
Chair
14 May 2025
Audited financial statements
Company statement of financial position
as at 31 March
3i Group plc | Annual report and accounts 2025
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2025
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Share-
based
payment
reserve
£m
Capital
reserve1
£m
Revenue
reserve1
£m
Own
shares
£m
Total
equity
£m
Total equity at the start of the year
719
791
43
42
17,685
393
(92)
19,581
Profit for the year
–
–
–
–
4,698
596
–
5,294
Total comprehensive income for the year
–
–
–
–
4,698
596
–
5,294
Share-based payments
–
–
–
16
–
–
–
16
Release on exercise/forfeiture of share awards
–
–
–
(23)
–
23
–
–
Exercise of share awards
–
–
–
–
(11)
–
11
–
Ordinary dividends
–
–
–
–
(425)
(200)
–
(625)
Issue of ordinary shares
–
1
–
–
–
–
–
1
Total equity at the end of the year
719
792
43
35
21,947
812
(81)
24,267
1
Refer to Note 19 for the nature of the capital and revenue reserves.
2024
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Share-
based
payment
reserve
£m
Capital
reserve1
£m
Revenue
reserve1
£m
Own
shares
£m
Total
equity
£m
Total equity at the start of the year
719
790
43
31
14,563
212
(108)
16,250
Profit for the year
–
–
–
–
3,328
516
–
3,844
Total comprehensive income for the year
–
–
–
–
3,328
516
–
3,844
Share-based payments
–
–
–
27
–
–
–
27
Release on exercise/forfeiture of share awards
–
–
–
(16)
–
16
–
–
Exercise of share awards
–
–
–
–
(16)
–
16
–
Ordinary dividends
–
–
–
–
(190)
(351)
–
(541)
Issue of ordinary shares
–
1
–
–
–
–
–
1
Total equity at the end of the year
719
791
43
42
17,685
393
(92)
19,581
1
Refer to Note 19 for the nature of the capital and revenue reserves.
The Notes to the accounts section forms an integral part of these financial statements.
Audited financial statements
Company statement of changes in equity
for the year to 31 March
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Notes
2025
£m
2024
£m
Cash flow from operating activities
Purchase of investments
(150)
(506)
Proceeds from investments
1,107
543
Amounts paid to subsidiaries
(1,941)
(1,013)
Amounts received from subsidiaries
1,039
788
Dividends from subsidiaries
142
50
Net cash flow from derivatives
113
69
Portfolio interest received
6
5
Portfolio dividends received
420
366
Portfolio fees paid
(1)
(2)
Carried interest and performance fees received
25
46
Co-investment loans (paid)/received
(34)
5
Interest received
14
8
Other cash income
–
2
Net cash flow from operating activities
740
361
Cash flow from financing activities
Issue of shares
1
1
Dividends paid
10
(625)
(541)
Proceeds from long-term borrowing
16
–
422
Interest paid
(60)
(40)
Net cash flow from financing activities
(684)
(158)
Change in cash and cash equivalents
56
203
Cash and cash equivalents at the start of the year
328
128
Effect of exchange rate fluctuations
(3)
(3)
Cash and cash equivalents at the end of the year
381
328
The Notes to the accounts section forms an integral part of these financial statements.
Audited financial statements
Company cash flow statement
for the year to 31 March
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Reporting entity
3i Group plc (the “Company”) is a public limited company incorporated and domiciled in England and Wales. The consolidated financial
statements (“the Group accounts”) for the year to 31 March 2025 comprise the financial statements of the Company and its consolidated
subsidiaries (collectively, “the Group”).
The Group accounts have been prepared and approved by the Directors in accordance with section 395 of the Companies Act 2006
and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. The Company has taken advantage of the
exemption in section 408 of the Companies Act 2006 not to present its Company statement of comprehensive income and related Notes.
A Basis of preparation
The Group and Company accounts have been prepared and approved by the Directors in accordance with UK-adopted international
accounting standards. The financial statements are presented to the nearest million sterling (£m), the functional currency of the Company.
The Group and Company did not implement the requirements of any new standards in issue for the year ended 31 March 2025.
The IASB introduced a new IFRS Accounting Standard, IFRS 18 to replace IAS 1 Presentation of Financial Statements. This new standard
establishes detailed requirements for classifying and aggregating income and expenses in the income statement, as well as disclosure
obligations for management defined performance measures. The standard applies for annual reporting periods beginning on or after
1 January 2027; however, it has not yet been endorsed for use in the UK.
Going concern
These financial statements have been prepared on a going concern basis as disclosed in the Directors’ report. The Directors have made
an assessment of going concern for a period of at least 12 months from the date of approval of the accounts, taking into account the Group’s
current performance, financial position and the principal and emerging risks facing the business.
The Directors’ assessment of going concern, which takes into account the business model on pages 14 and 15 and the Group’s liquidity
of £1,323 million, indicates that the Group and parent company will have sufficient funds to continue as a going concern, for at least the next
12 months from the date of approval of the accounts. As detailed within the Financial review on pages 70 to 74 on the Investment basis the
Group covers its cash operating expenses of £129 million at 31 March 2025, with cash income generated by our Private Equity and
Infrastructure businesses and Scandlines of £598 million at 31 March 2025. The Group’s liquidity comprises cash and deposits of £423 million
(31 March 2024: £396 million) and an undrawn multi-currency facility of £900 million (31 March 2024: £900 million), which has no financial
covenants.
As a proprietary investor, the Group has a long-term, responsible investment approach, and is not subject to external pressure to realise
investments before optimum value can be achieved. The Board has the ability to take certain actions to help support the Group in adverse
circumstances. Mitigating actions within management control during extended periods of low liquidity include, for example, drawing on the
existing RCF or temporarily reducing new investment levels. The Group manages liquidity with the aim of ensuring it is adequate and
sufficient, by regular monitoring of investments, realisations, operating expenses and portfolio cash income and there have been no post
balance sheet changes that would be materially detrimental to liquidity. The Directors are of the opinion that the Group’s cash flow forecast
is sufficient to support the Group given the current market, economic conditions and outlook.
Having performed the assessment on going concern, the Directors considered it appropriate to prepare the financial statements
of the Company and Group on a going concern basis, and have concluded that the Group has sufficient financial resources, is well placed
to manage business risks in the current economic environment, and can continue operations for a period of at least 12 months from the
date of issue of these financial statements.
Audited financial statements
Material accounting policies
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B Basis of consolidation
In accordance with IFRS 10, the Company meets the criteria as an investment entity and therefore is required to recognise subsidiaries that
also qualify as investment entities at fair value through profit or loss. It does not consolidate the investment entities it controls. Subsidiaries
that provide investment-related services, such as advisory, management or employment services, are not accounted for at fair value through
profit and loss and continue to be consolidated unless those subsidiaries qualify as investment entities, in which case they are recognised at
fair value. Subsidiaries are entities controlled by the Group. Control, as defined by IFRS 10, is achieved when the Group has all of the following:
• power over the relevant activities of the investee;
• exposure, or rights, to variable returns from its involvement with the investee; and
• the ability to affect those returns through its power over the investee.
The Group is required to determine the degree of control or influence the Group exercises and the form of any control to ensure that
the financial treatment is accurate.
Subsidiaries are fully consolidated from the date on which the Group effectively obtains control. All intragroup balances and transactions
with subsidiaries are eliminated upon consolidation. Subsidiaries are de-consolidated from the date that control ceases.
The Group comprises several different types of subsidiaries. For a new subsidiary, the Group assesses whether it qualifies as an investment
entity under IFRS 10, based on the function the entity performs within the Group. For existing subsidiaries, the Group annually reassesses the
function performed by each type of subsidiary to determine if the treatment under IFRS 10 exception from consolidation is still appropriate.
The types of subsidiaries and their treatment under IFRS 10 are as follows:
General Partners (“GPs”) – Consolidated
General Partners provide investment management services and do not hold any direct investments in portfolio assets. These entities are not
investment entities.
Investment managers/advisers – Consolidated
These entities provide investment-related services through the provision of investment management or advice. They do not hold any direct
investments in portfolio assets. These entities are not investment entities.
Holding companies of investment managers/advisers – Consolidated
These entities provide investment-related services through their subsidiaries. Typically they do not hold any direct investment in portfolio
assets and these entities are not investment entities.
Limited partnerships and other intermediate investment holding structures – Fair valued
The Group makes investments in portfolio assets through its ultimate parent company, as well as through other limited partnerships and
corporate subsidiaries, which the Group has created to align the interests of the investment teams with the performance of the assets, through
the use of various carried interest schemes. The purpose of these limited partnerships and corporate holding vehicles, many of which also
provide investment-related services, is to invest for investment income and capital appreciation. These partnerships and corporate
subsidiaries meet the definition of an investment entity and are accounted for at fair value through profit and loss.
Portfolio investments – Fair valued
Under IFRS 10, the test for accounting subsidiaries takes wider factors of control as well as actual equity ownership into account. In accordance
with the investment entity exception, these entities have been held at fair value with movements in fair value being recognised in profit or loss.
Associates – Fair valued
Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies.
Investments that are held as part of the Group’s investment portfolio are carried in the Consolidated statement of financial position
at fair value even though the Group may have significant influence over those companies.
Further detail on our application of IFRS 10 can be found in the Reconciliation of Investment basis to IFRS section.
Audited financial statements
Material accounting policies continued
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C Critical accounting judgements and estimates
The reported results of the Group are sensitive to the accounting policies, assumptions and estimates that underpin the preparation
of its financial statements. UK company law and IFRS require the Directors, in preparing the Group’s financial statements, to select suitable
accounting policies, apply them consistently and make judgements and estimates that are reasonable and prudent. The Group’s estimates
and assumptions are based on historical experience and expectation of future events and are reviewed periodically. The actual outcome
may be materially different from that anticipated.
(a) Critical judgements
In the course of preparing the financial statements, one judgement has been made in the process of applying the Group’s accounting
policies, other than those involving estimations, that has had a significant effect on the amounts recognised in the financial statements
as follows:
I. Assessment as an investment entity
The Board has concluded that the Company continues to meet the definition of an investment entity, as its strategic objective of investing
in portfolio investments and providing investment management services to investors for the purpose of generating returns in the form
of investment income and capital appreciation remains unchanged.
(b) Critical estimates
In addition to these significant judgements, the Directors have made one estimate, which they deem to have a significant risk of resulting
in a material adjustment to the amounts recognised in the financial statements within the next financial year. The detail of this estimate
is as follows:
I. Fair valuation of the investment portfolio
The investment portfolio, a material group of assets of the Group, is held at fair value. Details of valuation methodologies used and
the associated sensitivities are disclosed in Note 13 Fair values of assets and liabilities in this document. Given the importance of this area,
the Board has a separate Valuations Committee to review the valuations policies, process and application to individual investments.
A report on the activities of the Valuations Committee (including a review of the assumptions made) is included in the Valuations Committee
report on pages 130 to 134.
In the comparative year carried interest payable was a critical estimate. Following the payment of £521 million of carried interest this year
and the sensitivity being immaterial, carried interest payable is no longer considered a critical estimate for the year to 31 March 2025.
Audited financial statements
Material accounting policies continued
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D Other accounting policies
(a) Gross investment return
Gross investment return is equivalent to “revenue” for the purposes of IAS 1. It represents the overall increase in net assets from
the investment portfolio net of deal-related costs and includes foreign exchange movements in respect of the investment portfolio.
The substantial majority is investment income and outside the scope of IFRS 15. It is analysed into the following components with
the relevant standard shown where appropriate:
i. Realised profits or losses over value on the disposal of investments are the difference between the fair value of the consideration
received in accordance with IFRS 13 less any directly attributable costs, on the sale of equity and the repayment of interest income from
the investment portfolio, and its carrying value at the start of the accounting period, converted into sterling using the exchange rates
in force at the date of disposal. See Note 2 for more details.
ii. Unrealised profits or losses on the revaluation of investments are the movement in the fair value of investments in accordance with IFRS 13
between the start and end of the accounting period converted into sterling using the exchange rates in force at the date of fair value
assessment. See Note 3 for more details.
iii.Fair value movements on investment entity subsidiaries are the movements in the fair value of Group subsidiaries which are classified
as investment entities under IFRS 10. The Group makes investments in portfolio assets through these entities which are usually limited
partnerships or corporate subsidiaries. See Note 12 for more details.
iv.Portfolio income is that portion of income that is directly related to the return from individual investments. It is recognised to the extent
that it is probable that there will be economic benefit and the income can be reliably measured. The following specific recognition criteria
must be met before the income is recognised:
• Dividends from equity investments are recognised in profit or loss when the shareholders’ rights to receive payment is established;
• Interest income from the investment portfolio is recognised as it accrues. When the fair value of an investment is assessed to be below
the principal value of a loan, the Group recognises a provision against any interest accrued from the date of the assessment going
forward until the investment is assessed to have recovered in value; and
• The accounting policy for fee income is included in Note 4.
v. Foreign exchange on investments arises on investments made in currencies that are different from the functional currency of the Company,
being sterling. Investments are translated at the exchange rate ruling at the date of the transaction in accordance with IAS 21. At each
subsequent reporting date, investments are translated to sterling at the exchange rate ruling at that date.
vi.Movement in the fair value of derivatives relates to the change in fair value of forward foreign exchange contracts which have been used
to minimise foreign currency risk in the investment portfolio. See Note 17 for more details.
(b) Foreign currency translation
For the Company and those subsidiaries and associates whose balance sheets are denominated in sterling, which is the Company’s functional
and presentational currency, monetary assets and liabilities and non-monetary assets held at fair value denominated in foreign currencies are
translated into sterling at the closing rates of exchange at the balance sheet date. Foreign currency transactions are translated into sterling at
the average rates of exchange over the year and exchange differences arising are taken to profit or loss.
The statements of financial position of subsidiaries, which are not held at fair value, denominated in foreign currencies are translated into
sterling at the closing rates. The statements of comprehensive income for these subsidiaries and associates are translated at the average rates
and exchange differences arising are taken to other comprehensive income. Such exchange differences are reclassified to profit or loss in the
period in which the subsidiary or associate is disposed of.
(c) Treasury assets and liabilities
Short-term treasury assets, and short and long-term treasury liabilities are used in order to manage cash flows.
Cash and cash equivalents comprise cash at bank and amounts held in money market funds which are readily convertible into cash and there
is an insignificant risk of changes in value. Financial assets and liabilities are recognised in the balance sheet when the relevant Group entity
becomes a party to the contractual provisions of the instrument. Derecognition occurs when rights to cash flows from a financial asset expire,
or when a liability is extinguished.
Audited financial statements
Material accounting policies continued
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1 Segmental analysis
Operating segments are the components of the Group whose results are regularly reviewed by the Group’s chief operating decision maker
to make decisions about resources to be allocated to the segment and assess its performance.
The Chief Executive, who is considered to be the chief operating decision maker, managed the Group on the basis of business divisions
determined with reference to market focus, geographic focus, investment funding model and the Group’s management hierarchy.
A description of the activities, including returns generated by these divisions and the allocation of resources, is given in the Strategic report.
For the geographical segmental split, revenue information is based on the locations of the assets held. To aid the readers’ understanding
we have split out Action, Private Equity’s largest asset, into a separate column. Action is not regarded as a reported segment as the chief
operating decision maker reviews performance, makes decisions and allocates resources to the Private Equity segment, which includes Action.
The segmental information that follows is presented on the basis used by the Chief Executive to monitor the performance of the Group.
The reported segments are Private Equity, Infrastructure and Scandlines.
The segmental analysis is prepared on the Investment basis. The Investment basis is an APM and we believe it provides a more
understandable view of performance. For more information on the Investment basis and a reconciliation between the Investment basis
and IFRS, see pages 75 to 78.
Realised profits over value on the disposal of investments
50
–
1
–
51
Unrealised profits on the revaluation of investments
4,803
4,324
17
19
4,839
Portfolio income
Dividends
450
433
37
22
509
Interest income from investment portfolio
69
–
12
–
81
Fees receivable
14
5
(4)
–
10
Foreign exchange on investments
(340)
(255)
(11)
(10)
(361)
Movement in the fair value of derivatives
67
44
–
15
82
Gross investment return
5,113
4,551
52
46
5,211
Fees receivable from external funds
3
61
–
64
Operating expenses
(98)
(49)
(3)
(150)
Interest receivable
18
Interest payable
(65)
Exchange movements
20
Operating profit before carried interest
5,098
Carried interest
Carried interest and performance fees receivable
–
29
–
29
Carried interest and performance fees payable
(70)
(11)
–
(81)
Operating profit before tax
5,046
Tax charge
(1)
Profit for the year
5,045
Other comprehensive income
Re-measurements of defined benefit plans
4
Total return
5,049
Realisations1
1,827
1,164
10
–
1,837
Cash investment
(1,177)
(768)
(4)
(1)
(1,182)
Net divestment/(investment)
650
396
6
(1)
655
Balance sheet
Opening portfolio value at 1 April 2024
19,629
14,158
1,488
519
21,636
Investment2
1,318
768
4
1
1,323
Value disposed
(1,777)
(1,164)
(9)
–
(1,786)
Unrealised value movement
4,803
4,324
17
19
4,839
Foreign exchange and other movements
(415)
(255)
(8)
(10)
(433)
Closing portfolio value at 31 March 2025
23,558
17,831
1,492
529
25,579
Investment basis
Year to 31 March 2025
Private
Equity
£m
Of which
Action
£m
Infrastructure
£m
Scandlines
£m
Total3
£m
1
Realised proceeds may differ from cash proceeds due to timing of cash receipts. During the year, Private Equity recognised £1,827 million of realised proceeds, of which £1 million related to withholding tax. In addition, £5 million
of cash proceeds were received, which had been recognised as realised proceeds in FY2024.
2
Includes capitalised interest.
3
The total is the sum of Private Equity, Infrastructure and Scandlines, “Of which Action” is part of Private Equity.
Interest receivable, interest payable, exchange movements, the tax charge and re-measurements of defined benefit plans are not managed
by segment by the chief operating decision maker and therefore have not been allocated to a specific segment.
Audited financial statements
Notes to the accounts
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Investment basis
Year to 31 March 2024
Private
Equity
£m
Of which
Action
£m
Infrastructure
£m
Scandlines
£m
Total4
£m
Realised losses over value on the disposal of investments
–
–
(4)
–
(4)
Unrealised profits/(losses) on the revaluation of investments
3,874
3,609
72
(20)
3,926
Portfolio income
Dividends
439
377
35
25
499
Interest income from investment portfolio
80
–
11
–
91
Fees receivable
7
6
(6)
–
1
Foreign exchange on investments
(437)
(332)
(9)
(15)
(461)
Movement in the fair value of derivatives
96
58
–
20
116
Gross investment return
4,059
3,718
99
10
4,168
Fees receivable from external funds
4
68
–
72
Operating expenses
(92)
(52)
(3)
(147)
Interest receivable
13
Interest payable
(61)
Exchange movements
29
Other income
3
Operating profit before carried interest
4,077
Carried interest
Carried interest and performance fees receivable
–
62
–
62
Carried interest and performance fees payable
(262)
(43)
–
(305)
Operating profit before tax
3,834
Tax charge
(2)
Profit for the year
3,832
Other comprehensive income
Re-measurements of defined benefit plans
7
Total return
3,839
Realisations1
866
762
22
–
888
Cash investment2
(556)
(455)
(36)
(1)
(593)
Net divestment/(investment)
310
307
(14)
(1)
295
Balance sheet
Opening portfolio value at 1 April 2023
16,425
11,188
1,409
554
18,388
Investment3
683
455
36
1
720
Value disposed
(866)
(762)
(26)
–
(892)
Unrealised value movement
3,874
3,609
72
(20)
3,926
Foreign exchange and other movements
(487)
(332)
(3)
(16)
(506)
Closing portfolio value at 31 March 2024
19,629
14,158
1,488
519
21,636
1
Realised proceeds may differ from cash proceeds due to timing of cash receipts. During the year, Private Equity recognised £866 million of realised proceeds, of which £5 million relates to withholding tax.
2
Cash investment per the segmental analysis is different to cash investment per the cash flow due to a £10 million investment in Private Equity which was recognised in FY2023 and paid in FY2024.
3
Includes capitalised interest.
4
The total is the sum of Private Equity, Infrastructure and Scandlines, “Of which Action” is part of Private Equity.
Interest receivable, interest payable, exchange movements, other income, the tax charge and re-measurements of defined benefit plans
are not managed by segment by the chief operating decision maker and therefore have not been allocated to a specific segment.
Audited financial statements
Notes to the accounts continued
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1 Segmental analysis continued
Investment basis
Year to 31 March 2025
Europe
£m
North
America
£m
Other
£m
Total
£m
Realised profits over value on the disposal of investments
50
1
–
51
Unrealised profits/(losses) on the revaluation of investments
4,853
(11)
(3)
4,839
Portfolio income
588
13
(1)
600
Foreign exchange on investments
(316)
(44)
(1)
(361)
Movement in fair value of derivatives
65
17
–
82
Gross investment return
5,240
(24)
(5)
5,211
Realisations
1,826
11
–
1,837
Cash investment
(1,118)
(64)
–
(1,182)
Net divestment/(investment)
708
(53)
–
655
Balance sheet
Closing portfolio value at 31 March 2025
23,431
2,126
22
25,579
Investment basis
Year to 31 March 2024
Europe
£m
North
America
£m
Other
£m
Total
£m
Realised losses over value on the disposal of investments
(1)
(3)
–
(4)
Unrealised profits on the revaluation of investments
3,919
7
–
3,926
Portfolio income
579
12
–
591
Foreign exchange on investments
(416)
(44)
(1)
(461)
Movement in fair value of derivatives
88
28
–
116
Gross investment return
4,169
–
(1)
4,168
Realisations
865
22
1
888
Cash investment
(532)
(61)
–
(593)
Net divestment/(investment)
333
(39)
1
295
Balance sheet
Closing portfolio value at 31 March 2024
19,485
2,124
27
21,636
2 Realised profits over value on the disposal of investments
2025
Unquoted
investments
Total
£m
Realisations
1,107
1,107
Valuation of disposed investments
(1,102)
(1,102)
5
5
Of which:
– profits recognised on realisations
6
6
– losses recognised on realisations
(1)
(1)
5
5
2024
Unquoted
investments
Total
£m
Realisations
543
543
Valuation of disposed investments
(542)
(542)
1
1
Of which:
– profits recognised on realisations
1
1
1
1
Audited financial statements
Notes to the accounts continued
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3 Unrealised profits on the revaluation of investments
2025
Unquoted
investments
£m
2025
Quoted
investments
£m
Total
£m
Movement in the fair value of investments
3,835
(23)
3,812
Of which:
– unrealised profits
3,881
–
3,881
– unrealised losses
(46)
(23)
(69)
3,835
(23)
3,812
2024
Unquoted
investments
£m
2024
Quoted
investments
£m
Total
£m
Movement in the fair value of investments
2,704
38
2,742
Of which:
– unrealised profits
2,896
38
2,934
– unrealised losses
(192)
–
(192)
2,704
38
2,742
4 Revenue
Accounting policy:
The following items from the Consolidated statement of comprehensive income fall within the scope of IFRS 15:
Fees receivable are earned for providing services to 3i’s portfolio companies, which predominantly fall into one of two categories:
1 Negotiation and other transaction fees are earned for providing services relating to a specific transaction, such as when a portfolio
company is bought, sold or refinanced. These fees are generally of a fixed nature and the revenue is recognised in full at the point
of transaction completion.
2 Monitoring and other ongoing service fees are earned for providing a range of services to a portfolio company over a period of time.
These fees are generally of a fixed nature and the revenue is recognised evenly over the period, in line with the services provided.
Fees receivable from external funds are earned for providing management and advisory services to a variety of fund partnerships and other
entities. Fees are typically calculated as a percentage of the cost or value of the assets managed during the year and are paid quarterly,
based on the assets under management at that date. The revenue is recognised evenly over the period, in line with the services provided.
Carried interest and performance fees receivable are earned from funds which the Group manages on behalf of third parties. These profits
are earned when the funds meet certain performance conditions and are paid by the fund when these conditions have been met on a cash
basis.
Items from the Consolidated statement of comprehensive income which fall within the scope of IFRS 15 are included in the table below:
Year to 31 March 2025
Private
Equity
£m
Infrastructure
£m
Total
£m
Total revenue by geography1
Europe
17
85
102
North America
2
2
4
Total
19
87
106
Revenue by type
Fees receivable2
16
(3)
13
Fees receivable from external funds
3
61
64
Carried interest and performance fees receivable3
–
29
29
Total
19
87
106
1
For fees receivable from external funds and carried interest and performance fees receivable the geography is based on the domicile of the fund.
2
Fees receivable and carried interest receivable above are different to the Investment basis figures included in Note 1. This is due to the fact that Note 1 is disclosed on the Investment basis and the table above is shown on the IFRS
basis. For an explanation of the Investment basis and a reconciliation between Investment basis and IFRS basis see pages 75 to 78.
Audited financial statements
Notes to the accounts continued
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4 Revenue continued
Year to 31 March 2024
Private
Equity
£m
Infrastructure
£m
Total
£m
Total revenue by geography1
Europe
11
120
131
North America
2
4
6
Total
13
124
137
Revenue by type
Fees receivable2
9
(6)
3
Fees receivable from external funds
4
68
72
Carried interest and performance fees receivable3
–
62
62
Total
13
124
137
1
For fees receivable from external funds and carried interest and performance fees receivable the geography is based on the domicile of the fund.
2
Fees receivable and carried interest receivable above are different to the Investment basis figures included in Note 1. This is due to the fact that Note 1 is disclosed on the Investment basis and the table above is shown on the IFRS
basis. For an explanation of the Investment basis and a reconciliation between Investment basis and IFRS basis see pages 75 to 78.
Consolidated statement of financial position
As at 31 March 2025, other current assets in the Consolidated statement of financial position include balances relating to fees receivable
from portfolio and fees receivable from external funds of £8 million and nil respectively (31 March 2024: £5 million and £1 million respectively).
These are different to the balances included in the Investment basis Consolidated statement of financial position.
For an explanation of the Investment basis and a reconciliation between Investment basis and IFRS basis see pages 75 to 78.
5 Operating expenses
Operating expenses of £149 million (2024: £146 million) recognised in the IFRS Consolidated statement of comprehensive income,
include the following amounts:
2025
£m
2024
£m
Depreciation of property, plant and equipment
2
2
Depreciation of right of use assets
9
5
Amortisation of intangible assets
1
1
Audit fees (Note 7)
3
3
Staff costs (Note 6)
104
102
Redundancy costs
2
2
Including expenses incurred in the entities accounted for as investment entity subsidiaries of £1 million (2024: £1 million), the Group’s total
operating expenses on the Investment basis for the year were £150 million (2024: £147 million).
6 Staff costs
The table below is prepared in accordance with Companies Act requirements, which is consistent with both the IFRS and the Investment basis.
2025
£m
2024
£m
Wages and salaries
71
74
Social security costs
17
15
Share-based payment costs (Note 26)
12
9
Pension costs
4
4
Total staff costs
104
102
The average number of employees during the year was 226 (2024: 246), of which 146 (2024: 158) were employed in the UK.
Audited financial statements
Notes to the accounts continued
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6 Staff costs continued
Wages and salaries shown above include salaries paid in the year, as well as bonuses and portfolio incentive schemes relating to the year
ended 31 March 2025. These costs are included in operating expenses. The table below analyses these costs between fixed and variable
elements.
2025
£m
2024
£m
Fixed staff costs
48
48
Variable staff costs1
56
54
Total staff costs
104
102
1
Includes cash bonuses and equity and cash-settled share awards.
For more detail on staff costs for Directors refer to the disclosures labelled as audited included in the Directors’ remuneration report on pages
135 to 147.
7 Information regarding the Group’s Auditor
During the year, the Group received the following services from its External auditor, KPMG LLP. The table below is prepared in accordance
with Companies Act requirements, which is consistent with both the IFRS and the Investment basis.
2025
£m
2024
£m
Audit services
Statutory audit – Company
1.8
1.8
– UK subsidiaries
0.7
0.8
– Overseas subsidiaries
0.4
0.5
Total audit services
2.9
3.1
Non-audit services
Other assurance services
0.4
0.4
Total audit and non-audit services
3.3
3.5
8 Tax
Accounting policy:
Tax represents the sum of the tax currently payable, withholding taxes suffered and deferred tax. Tax is charged or credited in the
Consolidated statement of comprehensive income, except where it relates to items charged or credited directly to equity, in which
case the tax is also dealt with in equity. The tax currently payable is based on the taxable profit for the year. This may differ from the profit
included in the Consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible.
The affairs of the Group’s parent company are directed so as to allow it to meet the requisite conditions to continue to operate as an
approved investment trust company for UK tax purposes. An approved investment trust company is a UK investment company which
is required to meet certain conditions set out in the UK tax rules to obtain and maintain its tax status. This approval allows certain
investment profits of the Company, broadly its capital profits, to be exempt from tax, including Pillar 2 top-up tax, in the UK.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered. The deferred tax assets and liabilities have
been calculated using the corporation tax rate in the UK of 25% (2024: 25%).
IFRIC 23 has been applied to the recognition and measurement of uncertain tax provisions held at the year end. There were no material
uncertain tax positions arising during the year or at the year end.
The Group is within the scope of the OECD Pillar 2 model rules. The United Kingdom, the jurisdiction in which the ultimate parent
company of the Group is tax resident, has enacted the Pillar 2 legislation. Under the Pillar 2 legislation, the Group is liable to pay a top-up
tax for the difference between its GloBE effective tax rate per jurisdiction and the 15% minimum rate. The Group’s key business operations
are not based in low tax jurisdictions and the application of the Pillar 2 rules is not anticipated to have a material impact on the Group.
Audited financial statements
Notes to the accounts continued
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8 Tax continued
2025
£m
2024
£m
Current taxes
Current year:
UK
1
3
Overseas
1
1
Prior year:
UK
(1)
(1)
Overseas
–
(1)
Deferred taxes
Current year
–
–
Total tax charge in the Consolidated statement of comprehensive income
1
2
Reconciliation of tax in the Consolidated statement of comprehensive income
The tax charge for the year is different to the standard rate of corporation tax in the UK, currently 25% (2024: 25%), and the differences are
explained below:
2025
£m
2024
£m
Profit before tax
5,039
3,838
Profit before tax multiplied by rate of corporation tax in the UK of 25% (2024: 25%)
1,260
960
Effects of:
Non-taxable capital profits due to UK-approved investment trust company status
(1,139)
(838)
Non-taxable dividend income
(122)
(120)
(1)
2
Other differences between accounting and tax profits:
Permanent differences – non-deductible items
2
2
Temporary differences on which deferred tax is not recognised
(6)
2
Overseas countries’ taxes
1
1
Tax losses carried forward/(utilised) on which deferred tax not recognised
6
(3)
Prior year tax credits
(1)
(2)
Total income tax charge in the Consolidated statement of comprehensive income
1
2
Including a net tax charge of nil (2024: nil) in investment entity subsidiaries, the Group recognised a total tax charge of £1 million (2024:
£2 million) under the Investment basis.
Deferred income taxes
2025
£m
2024
£m
Opening deferred income tax asset/(liability)
Tax losses
1
1
Income in accounts taxable in the future
(2)
(2)
(1)
(1)
Recognised through Consolidated statement of comprehensive income
Tax losses recognised
–
–
Income in accounts taxable in the future
–
–
–
–
Closing deferred income tax asset/(liability)
Tax losses
1
1
Income in accounts taxable in the future
(2)
(2)
(1)
(1)
Audited financial statements
Notes to the accounts continued
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8 Tax continued
At 31 March 2025, the Group had carried forward tax losses of £1,382 million (31 March 2024: £1,371 million), capital losses of £77 million
(31 March 2024: £87 million) and other deductible temporary differences of £82 million (31 March 2024: £86 million). With the additional
restrictions on utilising brought forward losses introduced from 1 April 2017, and the uncertainty that the Group will generate sufficient
or relevant taxable profits not covered by the Investment Trust exemption in the foreseeable future to utilise these amounts, no deferred tax
asset has been recognised in respect of these losses. Deferred tax assets and liabilities have been calculated using the corporation tax rate
in the UK of 25% (2024: 25%).
In addition, the Group has long-standing carried forward tax losses of £181 million (31 March 2024: £186 million) and other deductible
temporary differences of £2 million (31 March 2024: £3 million) in overseas territories, being Germany, US, France and Luxembourg, disclosed
and agreed with local tax authorities, for which no deferred asset has been recognised.
9 Per share information
The calculation of basic net assets per share is based on the net assets and the number of shares in issue at the year end. When calculating
the diluted net assets per share, the number of shares in issue is adjusted for the effect of all dilutive share awards. Dilutive share awards
are equity awards with performance conditions attached, see Note 26 Share-based payments for further details.
2025
2024
Net assets per share (£)
Basic
25.49
20.92
Diluted
25.42
20.85
Net assets (£m)
Net assets attributable to equity holders of the Company
24,611
20,170
2025
2024
Number of shares in issue
Ordinary shares
973,398,978
973,366,445
Own shares
(7,979,305)
(8,997,664)
965,419,673
964,368,781
Effect of dilutive potential ordinary shares
Share awards
2,665,677
3,104,739
Diluted shares
968,085,350
967,473,520
The calculation of basic earnings per share is based on the profit attributable to shareholders and the weighted average number of shares
in issue. The weighted average shares in issue for the year to 31 March 2025 are 965,214,237 (2024: 964,007,876). When calculating the diluted
earnings per share, the weighted average number of shares in issue is adjusted for the effect of all dilutive share awards. The diluted weighted
average shares in issue for the year to 31 March 2025 are 967,799,507 (2024: 966,901,059).
2025
2024
Earnings per share (pence)
Basic
522.0
397.9
Diluted
520.6
396.7
Earnings (£m)
Profit for the year attributable to equity holders of the Company
5,038
3,836
10 Dividends
2025
pence per
share
2025
£m
2024
pence per
share
2024
£m
Declared and paid during the year
Ordinary shares
Second dividend
34.50
332
29.75
286
First dividend
30.50
293
26.50
255
65.00
625
56.25
541
Proposed dividend
42.50
408
34.50
332
The Group introduced a simplified dividend policy in May 2018. In accordance with this policy, subject to maintaining a conservative balance
sheet approach, the Group aims to maintain or grow the dividend each year. The first dividend has been set at 50% of the prior year’s total
dividend.
Audited financial statements
Notes to the accounts continued
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10 Dividends continued
The dividend can be paid out of either the capital reserve or the revenue reserve subject to the investment trust rules, see Note 19 and the
statement of changes in equity for details of reserves.
The distributable reserves of the Company are £10,488 million (31 March 2024: £8,282 million) and the Board reviews the distributable reserves
bi-annually, including consideration of any material changes since the most recent audited accounts, ahead of proposing any dividend. The
Board also reviews the proposed dividends in the context of the requirements of being an approved investment trust. Shareholders are given
the opportunity to approve the total dividend for the year at the Company’s Annual General Meeting. Details of the Group’s continuing
viability and going concern can be found in the Risk management section.
11 Investment portfolio
Accounting policy:
Investments are recognised and derecognised on the date when their purchase or sale is subject to a relevant contract and the associated
risks and rewards have been transferred. The Group manages its investments with a view to profiting from the receipt of investment
income and capital appreciation from changes in the fair value of investments.
All investments are initially recognised at the fair value of the consideration given and are subsequently measured at fair value,
in accordance with the Group’s valuation policies.
Quoted investments are accounted for at fair value through profit and loss. Fair value is measured using the closing bid price
at the reporting date, where the investment is quoted on an active stock market.
Unquoted investments, including both equity and loans, are accounted for at fair value through profit and loss. Fair value is determined
in line with 3i’s valuation policy, which is compliant with the fair value guidelines under IFRS and the International Private Equity
and Venture Capital (“IPEV”) Valuation Guidelines, details of which are available in “Valuations Committee report” on pages 130 to 134.
Interest bearing loans accrue interest which is either settled in cash or capitalised on a regular basis and included as part of the principal
loan balance. The capitalisation of accrued interest is treated as part of investment additions during the year. If the fair value of an
investment is assessed to be below the principal value of the loan the Group recognises a fair value reduction against any interest income
accrued from the date of the assessment going forward. “Capitalisation at nil value” is the term used to describe the capitalisation of
accrued interest which has been fully provided for. These transactions are disclosed as additions to portfolio cost with an equal reduction
made where loan notes have nil value.
In accordance with IFRS 10, the proportion of the investment portfolio held by the Group’s unconsolidated subsidiaries is presented
as part of the fair value of investment entity subsidiaries, along with the fair value of their other assets and liabilities.
A reconciliation of the fair value of Investments in investment entities is included in Note 12.
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Opening fair value
15,072
9,518
15,072
9,518
Additions
819
3,596
819
3,596
– of which loan notes with nil value
(9)
(6)
(9)
(6)
Disposals, repayments and write-offs
(1,102)
(542)
(1,102)
(542)
Fair value movement1
3,812
2,742
3,812
2,742
Other movements2
(236)
(236)
(236)
(236)
Closing fair value
18,356
15,072
18,356
15,072
Quoted investments
856
879
856
879
Unquoted investments
17,500
14,193
17,500
14,193
Closing fair value
18,356
15,072
18,356
15,072
1
All fair value movements relate to assets held at the end of the year and are recognised in unrealised profits on the revaluation of investments.
2
Other movements include the impact of foreign exchange and accrued interest.
3i’s investment portfolio is made up of longer-term investments, with average holding periods greater than one year, and thus is classified
as non-current.
The table on the next page reconciles between purchase of investments in the cash flow statement and additions as disclosed in the table
above.
Audited financial statements
Notes to the accounts continued
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11 Investment portfolio continued
2025
£m
2024
£m
Purchase of investments
150
506
Transfer of portfolio investments from investment entity subsidiaries1
1,371
3,068
Transfer of portfolio investments to investment entity subsidiaries2
(730)
–
Investment paid
–
(2)
Investment
791
3,572
Capitalised interest received by way of loan notes
28
24
Additions
819
3,596
1
Includes £1,371 million (31 March 2024: £2,770 million) related to Action. See Note 12 for further details.
2
Includes £593 million (31 March 2024: nil) related to Action. See Note 12 for further details.
Included within profit or loss is £29 million (2024: £29 million) of interest income. Interest income included £18 million (2024: £18 million)
of accrued income capitalised during the year, £6 million (2024: £5 million) of cash income and £5 million (2024: £6 million) of accrued income
remaining uncapitalised at the year end.
Quoted investments are classified as Level 1 and unquoted investments are classified as Level 3 in the fair value hierarchy. See Note 13 for details.
12 Investments in investment entity subsidiaries
Accounting policy:
Investments in investment entity subsidiaries are accounted for as financial instruments at fair value through profit and loss in accordance
with IFRS 9.
These entities are typically limited partnerships and other intermediate investment holding structures which hold the Group’s interests
in investments in portfolio companies. The fair value can increase or decrease from either amounts paid to or received from the investment
entity subsidiaries or valuation movements in line with the Group’s valuation policy.
Substantially all of these entities meet the definition of a Fund under the IPEV guidelines and the fair value of these entities is their net asset
value.
We consider the net asset value of investment entity subsidiaries to be the most appropriate to determine fair value. At each reporting
period, we consider whether any additional fair value adjustments need to be made to the net asset value of the investment entity
subsidiaries. These adjustments may be required to reflect market participants’ considerations about fair value that may include, but are
not limited to, liquidity and the portfolio effect of holding multiple investments within the investment entity subsidiary. There was no
particular circumstance to indicate that a fair value adjustment was required (31 March 2024: no adjustment required) and, after due
consideration, we concluded that the net asset values were the most appropriate reflection of fair value at 31 March 2025.
Level 3 fair value reconciliation – investments in investment entity subsidiaries
Non-current
Group
2025
£m
Group
2024
£m
Opening fair value
5,804
7,844
Amounts paid to investment entity subsidiaries
1,537
674
Amounts received from investment entity subsidiaries
(865)
(580)
Fair value movements on investment entity subsidiaries
953
861
Transfer of portfolio investments from investment entity subsidiaries
(1,371)
(3,068)
Transfer of portfolio investments to investment entity subsidiaries
730
–
Transfer of assets to investment entity subsidiaries
128
73
Closing fair value
6,916
5,804
Transfer of portfolio investments from investment entity subsidiaries includes the transfer of investment portfolio between investment entity
subsidiaries and the Company at fair value. The consideration for these transfers can either be cash or intra-group receivables. During the
year, the Company received a transfer of assets of £1,371 million (31 March 2024: £3,068 million) from partnerships which are classified
as investment entity subsidiaries, of which £1,371 million (31 March 2024: £2,770 million) related to Action. During the year, the Company
transferred assets of £730 million (31 March 2024: nil) to partnerships which are classified as investment entity subsidiaries of which £593 million
(31 March 2024: nil) related to Action.
Audited financial statements
Notes to the accounts continued
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12 Investments in investment entity subsidiaries continued
Restrictions
3i Group plc, the ultimate parent company, receives dividend income from its subsidiaries. There is no restrictive cash (31 March 2024:
£21 million) held in investment entity subsidiaries relating to carried interest and performance fees payable.
Support
3i Group plc continues to provide, where necessary, ongoing support to its investment entity subsidiaries for the purchase of portfolio
investments. The Group’s current commitments are disclosed in Note 23.
13 Fair values of assets and liabilities
Accounting policy:
Financial instruments are initially classified at either amortised cost or fair value through profit or loss. Financial instruments classified at fair
value through profit or loss are subsequently measured at fair value with gains and losses arising from changes in fair value recognised
in profit or loss in the Statement of comprehensive income. Financial instruments classified at amortised cost are subsequently measured
at amortised cost using the effective interest method with interest income or expense and foreign exchange gains and losses recognised
in profit or loss in the Statement of comprehensive income.
(A) Classification
The following tables analyse the Group’s assets and liabilities in accordance with the categories of financial instruments in IFRS 9:
Group
2025
Classified at fair
value through
profit and loss
£m
Group
2025
Other financial
instruments at
amortised cost
£m
Group
2025
Total
£m
Group
2024
Classified at fair
value through
profit and loss
£m
Group
2024
Other financial
instruments at
amortised cost
£m
Group
2024
Total
£m
Assets
Quoted investments
856
–
856
879
–
879
Unquoted investments
17,500
–
17,500
14,193
–
14,193
Investments in investment entities
6,916
–
6,916
5,804
–
5,804
Other financial assets
155
91
246
182
106
288
Total
25,427
91
25,518
21,058
106
21,164
Liabilities
Loans and borrowings
–
1,194
1,194
–
1,202
1,202
Other financial liabilities
4
225
229
–
242
242
Total
4
1,419
1,423
–
1,444
1,444
Company
2025
Classified at fair
value through
profit and loss
£m
Company
2025
Other financial
instruments at
amortised cost
£m
Company
2025
Total
£m
Company
2024
Classified at fair
value through
profit and loss
£m
Company
2024
Other financial
instruments at
amortised cost
£m
Company
2024
Total
£m
Assets
Quoted investments
856
–
856
879
–
879
Unquoted investments
17,500
–
17,500
14,193
–
14,193
Other financial assets
143
18
161
170
96
266
Total
18,499
18
18,517
15,242
96
15,338
Liabilities
Loans and borrowings
–
1,194
1,194
–
1,202
1,202
Other financial liabilities
4
75
79
–
760
760
Total
4
1,269
1,273
–
1,962
1,962
Within the Company, Interests in Group entities of £6,642 million (31 March 2024: £5,877 million) includes £6,385 million (31 March 2024:
£5,862 million) held at fair value and £257 million (31 March 2024: £15 million) held at cost less impairment.
Audited financial statements
Notes to the accounts continued
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13 Fair values of assets and liabilities continued
(B) Valuation
The fair values of the Group’s financial assets and liabilities not held at fair value, are not materially different from their carrying values, with
the exception of loans and borrowings. The fair value of the loans and borrowings is £1,115 million (31 March 2024: £1,166 million), determined
with reference to their published market prices. The carrying value of the loans and borrowings is £1,194 million (31 March 2024: £1,202 million)
and accrued interest payable (included within trade and other payables) is £29 million (31 March 2024: £29 million).
Valuation hierarchy
The Group classifies financial instruments measured at fair value according to the following hierarchy:
Level
Fair value input description
Financial instruments
Level 1
Quoted prices (unadjusted) from active markets
Quoted equity instruments
Level 2
Inputs other than quoted prices included in Level 1 that are observable
either directly (ie as prices) or indirectly (ie derived from prices)
Derivative financial instruments
Level 3
Inputs that are not based on observable market data
Unquoted investments
Unquoted equity instruments and debt instruments are measured in accordance with the IPEV Guidelines with reference to the most
appropriate information available at the time of measurement. Further information regarding the valuation of unquoted equity instruments
can be found on page 179.
The table below shows the classification of financial instruments held at fair value into the valuation hierarchy at 31 March 2025:
Group
2025
Level 1
£m
Group
2025
Level 2
£m
Group
2025
Level 3
£m
Group
2025
Total
£m
Group
2024
Level 1
£m
Group
2024
Level 2
£m
Group
2024
Level 3
£m
Group
2024
Total
£m
Assets
Quoted investments
856
–
–
856
879
–
–
879
Unquoted investments
–
–
17,500
17,500
–
–
14,193
14,193
Investments in investment
entity subsidiaries
–
–
6,916
6,916
–
–
5,804
5,804
Other financial assets
–
137
18
155
–
165
17
182
Liabilities
Other financial liabilities
–
(4)
–
(4)
–
–
–
–
Total
856
133
24,434
25,423
879
165
20,014
21,058
Audited financial statements
Notes to the accounts continued
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13 Fair values of assets and liabilities continued
We determine that, in the ordinary course of business, the net asset value of an investment entity subsidiary is considered to be the
most appropriate to determine fair value. The underlying portfolio is valued under the same methodology as directly held investments,
with any other assets or liabilities within investment entity subsidiaries fair valued in accordance with the Group’s accounting policies.
Note 12 details the Directors’ considerations about the fair value of the underlying investment entity subsidiaries.
Movements in the directly held investment portfolio categorised as Level 3 during the year are set out in the table below:
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Opening fair value
14,193
8,677
14,193
8,677
Additions1
819
3,596
819
3,596
– of which loan notes with nil value
(9)
(6)
(9)
(6)
Disposals, repayments and write-offs
(1,102)
(542)
(1,102)
(542)
Fair value movement2
3,835
2,704
3,835
2,704
Other movements3
(236)
(236)
(236)
(236)
Closing fair value
17,500
14,193
17,500
14,193
1 The table in Note 11 reconciles additions.
2 All fair value movements relate to assets held at the end of the year and are recognised in unrealised profits on the revaluation of investments.
3 Other movements include the impact of foreign exchange and accrued interest.
Unquoted investments valued using Level 3 inputs also had the following impact on profit and loss: realised profits over value on disposal
of investments of £5 million (2024: £1 million), dividend income of £380 million (2024: £332 million) and foreign exchange losses of £245 million
(2024: £238 million).
Assets move between Level 1 and Level 3 when an unquoted equity investment lists on a quoted market exchange. There were no transfers
in or out of Level 3 during the year. In the 12 months to 31 March 2025, one asset changed valuation basis within Level 3, moving from a DCF
based valuation to an other basis. Action remains unchanged on an earnings-based valuation. The changes in valuation methodology in the
period reflect our view of the most appropriate method to determine the fair value of these assets at 31 March 2025. Further information can
be found in the Private Equity and Infrastructure sections of the Business and Financial reviews starting on page 19.
The following table summarises the various valuation methodologies used by the Group to fair value Level 3 instruments, the inputs and the
sensitivities applied and the impact of those sensitivities to the unobservable inputs. Overall, our portfolio companies have delivered a strong
performance, against a backdrop of a challenging macro-economic and geopolitical conditions, including the recent tariff announcements.
These factors have been important considerations in our portfolio valuations at 31 March 2025. As part of our case-by-case review of our
portfolio companies the risks and opportunities from climate change are an important consideration in the overall discussion on fair value and
where relevant and possible, we embed certain climate-related considerations in the valuations. These risks are adequately captured in the
multiple sensitivity. All numbers in the table below are on an Investment basis.
Audited financial statements
Notes to the accounts continued
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13 Fair values of assets and liabilities continued
Level 3 unquoted investments
Methodology
Description
Inputs
Fair value at
31 March 2025
(£m)
Sensitivity on key
unobservable input
Fair value
impact of
sensitivities (£m)
Earnings
(Private Equity)
Most commonly used
Private Equity valuation
methodology
Used for investments
which are typically
profitable and for which
we can determine a set
of listed companies and
precedent transactions,
where relevant, with
similar characteristics
Earnings multiples are applied to the earnings of
the Company to determine the enterprise value
Earnings multiples
When selecting earnings multiples, we consider:
(1) Comparable listed companies current
performance and through-the-cycle averages
(2) Relevant market transaction multiples
(3) Company performance, organic growth
and value-accretive add-ons, if any
(4) Exit expectations and other company-specific
factors
For point 1 and 2 of the above we select
companies in the same industry and, where
possible, with a similar business model and
profile in terms of size, products, services and
customers, growth rates and geographic focus
The pre-discount multiple ranges from 7.5x to
20.0x (2024: 7.5x to 20.0x)
Other inputs:
Earnings
Reported earnings are adjusted for non-recurring
items, such as restructuring expenses, for
significant corporate actions and, in exceptional
cases, adjustments to arrive at maintainable
earnings
The most common measure is earnings before
interest, tax, depreciation and amortisation
(“EBITDA”)
Earnings are usually obtained from portfolio
company management accounts to the
preceding quarter end, with reference also
to forecast earnings and the maintainable view of
earnings
Action, our largest asset, is valued using run-rate
earnings
22,978
(2024: 18,916)
For the assets
valued on an
earnings basis,
we have
applied a 5%
sensitivity to the
earnings
multiple
Action is our
largest asset,
and we have
applied a 1.0x
sensitivity to its
net valuation
multiple of
18.5x
1,361
(2024: 1,103)
(1,361)
(2024: (1,104))
1,129
(2024: 866)
(1,129)
(2024: (866))
Discounted
cash flow
(Private Equity/
Infrastructure/
Scandlines)
Appropriate for
businesses with long-
term stable cash flows,
typically in Infrastructure
or, alternatively,
businesses where DCF is
more appropriate in the
short term
Long-term cash flows are discounted at a rate
which is benchmarked against market data,
where possible, or adjusted from the rate at the
initial investment based on changes in the risk
profile of the investment
The range of discount rates used in our DCF
valuations is 10.5% to 16.0% (2024: 10.5%
to 16.9%)
1,044
(2024: 1,047)
For the assets
valued on a
DCF basis, we
have applied a
5% sensitivity to
the discount
rate
(44)
(2024: (34))
47
(2024: 36)
NAV
(Infrastructure)
Used for investments
in unlisted funds
Net asset value reported by the fund manager.
The valuation of the underlying portfolio
is consistent with IFRS
121
(2024: 104)
A 5% increase
on closing NAV
6
(2024: 5)
Price of recent
investment
(Private Equity)
Used for recent
investments in unlisted
companies
Valued net of negotiation fees
216
(2024: –)
n/a
n/a
Imminent sale
(Private Equity)
Used for assets where a
sale has been agreed
A 2.5% discount is applied to expected proceeds
–
(2024: 377)
n/a
n/a
Other (Private
Equity/
Infrastructure)
Used where elements
of a business are valued
on different bases
Values of separate elements prepared on or
triangulated against one of the methodologies
listed above
304
(2024: 246)
A 5% increase
in the closing
value
15
(2024: 12)
Audited financial statements
Notes to the accounts continued
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14 Carried interest and performance fees payable
Accounting policy:
The Group offers investment executives the opportunity to participate in the returns from investments subject to certain performance
conditions. “Carried interest and performance fees payable” is the term used for amounts payable to executives on these investment-
related transactions.
A variety of asset pooling arrangements are in place so that participants may have an interest in one or more carried interest plans and
participants include current and former investment participants. Carried interest payable is accrued if its performance conditions, measured
at the balance sheet date, would be achieved if the remaining assets in that plan were realised at fair value. An accrual is made equal to the
participants’ share of profits in excess of the performance conditions in place in the carried interest plan, discounted to reflect the likely
actual cash payment date, which may be materially later than the time of the accrual.
The Infrastructure performance fee payable is accrued based on the expected award. A significant proportion of the amount awarded
is deferred over time and may be granted in 3i Group plc shares. This is recognised over the vesting period in line with the requirements
of IFRS 2 or IAS 19, depending on the type of award.
Under IFRS 10, where carried interest payable reduces the fair value of an investment entity subsidiary, that movement is recorded through
“Fair value movements on investment entity subsidiaries”. At 31 March 2025, £319 million of carried interest payable was recognised in the
Consolidated statement of financial position of these investment entity subsidiaries (31 March 2024: £764 million).
Group
2025
£m
Group
2024
£m
Opening carried interest and performance fees payable
54
77
Carried interest and performance fees payable recognised in profit and loss during the year
14
51
Cash paid in the year
(23)
(53)
Other movements1
(4)
(21)
Closing carried interest and performance fees payable
41
54
Of which: payable in greater than one year
29
30
1
Other movements include the impact of foreign exchange and a transfer from trade and other payables.
The carry payable expense in the table above includes a £9 million (2024: £23 million) charge arising from Infrastructure share-based payment
carry related schemes. The charge includes £4 million (2024: £16 million) of equity awards and £1 million (2024: £1 million) of cash-settled
awards, see Note 26 Share-based payments for further details and £4 million (2024: £6 million) of social security cost.
A 5% increase in the valuation of all individual assets in the underlying investment portfolio held by investment entity subsidiaries would result
in a £20 million increase in carried interest and performance fees payable (31 March 2024: £41 million).
A 5% decrease in the valuation of all individual assets in the underlying investment portfolio held by investment entity subsidiaries would result
in a £20 million decrease in carried interest and performance fees payable (31 March 2024: £41 million).
15 Other assets
Accounting policy:
Assets, other than those specifically accounted for under a separate policy, are stated at their cost less impairment losses. Financial assets
are recognised at amortised cost in accordance with IFRS 9, which includes the requirement to calculate expected credit losses (“ECLs”)
on initial recognition. Any ECLs are recognised directly in profit and loss, with any subsequent reversals recognised in the same location.
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Prepayments
3
4
–
–
Other debtors
73
71
18
25
Total other assets
76
75
18
25
Of which: receivable in greater than one year
27
28
15
16
At 31 March 2025, no ECLs have been recognised against other assets as they are negligible (31 March 2024: nil).
Audited financial statements
Notes to the accounts continued
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16 Loans and borrowings
Accounting policy:
All loans and borrowings are initially recognised at the fair value of the consideration received. After initial recognition, these are
subsequently measured at amortised cost using the effective interest method, which is the rate that exactly discounts the estimated
future cash flows through the expected life of the liabilities. Financial liabilities are derecognised when they are extinguished.
Group
2025
£m
Group
2024
£m
Loans and borrowings are repayable as follows:
Within one year
–
–
Between the second and fifth year
419
–
After five years
775
1,202
1,194
1,202
Principal borrowings include:
Rate
Maturity
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Fixed rate
€500 million notes (public issue)
4.875%
2029
419
427
419
427
£375 million notes (public issue)
5.750%
2032
375
375
375
375
£400 million notes (public issue)
3.750%
2040
400
400
400
400
1,194
1,202
1,194
1,202
Committed multi-currency facilities: Revolving Credit Facility (RCF)
£400 million tranche
SONIA+0.75%
2026
–
–
–
–
£500 million tranche
SONIA+0.50%
2027
–
–
–
–
Total loans and borrowings
1,194
1,202
1,194
1,202
All of the Group’s borrowings are repayable in one instalment on the respective maturity dates. None of the Group’s interest-bearing loans
and borrowings are secured on the assets of the Group. The fair value of the loans and borrowings is £1,115 million (31 March 2024: £1,166
million), determined with reference to their published market prices. The interest payable for loans and borrowings recognised within profit
and loss is £63 million (2024: £60 million) and the interest paid for loans and borrowings recognised within the Consolidated cash flow
statement is £60 million (2024: £40 million).
In accordance with the FCA’s Investment Funds sourcebook (FUNDS 3.2.2R and Fund 3.2.6R), 3i Investments plc, as AIFM of the Company,
is required to calculate leverage and disclose this to investors. The leverage is calculated using the gross method and commitment method.
Gross method calculates the overall exposure over the net asset value whereas the commitment method calculates the net exposure over
the net asset value. Leverage at 31 March 2025 for the Group is 110% (31 March 2024: 118%) and the Company is 107% (31 March 2024: 116%)
under both the gross method and the commitment method. The leverage for 3i Investments plc at 31 March 2025 is 100% (31 March 2024:
100%) under both the gross method and the commitment method.
Under the Securities Financing Transactions Regulation and the FCA’s Investment Funds sourcebook (FUNDS 3.2.4A), 3i is required to disclose
certain information relating to the use of securities financing transactions (“SFTs”) and total return swaps. At 31 March 2025, 3i was not party
to any transactions involving SFTs or total return swaps.
Audited financial statements
Notes to the accounts continued
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16 Loans and borrowings continued
Reconciliation of liabilities arising from financing activities
The changes in the Group’s liabilities arising from financing activities are classified as follows:
Loans and
borrowings
2025
£m
Lease liability
2025
£m
Loans and
borrowings
2024
£m
Lease liability
2024
£m
Opening liability
1,202
49
775
10
Additions
–
–
422
44
Interest
–
2
–
1
Repayments
–
(6)
–
(6)
Exchange movements
(8)
–
5
–
Closing liability
1,194
45
1,202
49
17 Derivatives
Accounting policy:
Derivative financial instruments are accounted for at fair value through profit and loss in accordance with IFRS 9. They are revalued at the
balance sheet date based on market prices, with any change in fair value being recorded in profit and loss. Derivatives are recognised in
the Consolidated statement of financial position as a financial asset when their fair value is positive and as a financial liability when their fair
value is negative. Derivative contracts are disclosed in the Consolidated statement of financial position as either current or non-current
according to their maturity profile. The Group’s derivative financial instruments are not designated as hedging instruments.
Statement of comprehensive income
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Movement in the fair value of derivatives
82
116
82
116
Statement of financial position
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Non-current assets
Forward foreign exchange contracts
46
83
46
83
Current assets
Forward foreign exchange contracts
91
82
91
82
Non-current liabilities
Forward foreign exchange contracts
(4)
–
(4)
–
Current liabilities
Forward foreign exchange contracts
–
–
–
–
The Group uses forward foreign exchange contracts to mitigate the effect of fluctuations arising from movements in exchange rates in the
value of the Group’s investments in euro and US dollar. As at 31 March 2025, the notional amount of these forward foreign exchange contracts
held by the Company was €2.6 billion (31 March 2024: €2.6 billion) and $1.2 billion (31 March 2024: $1.2 billion). In April 2025, we completed
a further €400 million of forward foreign exchange contracts to increase the notional value of the Group’s euro foreign exchange hedging
programme to €3.0 billion, reflecting increases in euro cash flows and capitalising on attractive hedge rates.
Audited financial statements
Notes to the accounts continued
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18 Trade and other payables
Accounting policy:
Liabilities, other than those specifically accounted for under a separate policy, are stated based on the amounts which are considered
to be payable in respect of goods or services received up to the balance sheet date. Financial liabilities are recognised at amortised cost
in accordance with IFRS 9.
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Trade and other payables
139
139
29
29
Amounts due to subsidiaries
–
–
46
731
Total trade and other payables
139
139
75
760
Of which: payable in greater than one year
6
5
–
–
Refer to Note 28 for further details on the movement of Amounts due to subsidiaries.
19 Issued capital and reserves
Accounting policy:
Ordinary shares issued by the Group are recognised at the proceeds or fair value received with the excess of the amount received over
nominal value being credited to the share premium account. Direct issue costs net of tax are deducted from equity.
Capital reserve recognises all profits and losses that are capital in nature or have been allocated to capital, which include the accumulation
of investment gains and losses as well as changes to the value of financial instruments measured at fair value through profit and loss.
Revenue reserve recognises all profits and losses that are revenue in nature or have been allocated to revenue and is the accumulation
of revenue profits and losses.
Issued and fully paid
2025
Number
2025
£m
2024
Number
2024
£m
Ordinary shares of 7319∕22p
Opening balance
973,366,445
719
973,312,950
719
Issued under employee share plans
32,533
–
53,495
–
Closing balance
973,398,978
719
973,366,445
719
The Company issued 32,533 ordinary shares to the Trustee of the 3i Group Share Incentive Plan for a total cash consideration of £1,073,413
at various prices from 2,866 pence to 4,054 pence per share (being the market prices on the issue dates which were the last trading day
of each month in the year, with the exception of December 2024, when the issue date was 3 January 2025). These shares were ordinary shares
with no additional rights attached to them and had a total nominal value of £24,030.
Audited financial statements
Notes to the accounts continued
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20 Own shares
Accounting policy:
Own shares are recorded by the Group when ordinary shares are acquired by the Company or by The 3i Group Employee Benefit Trust.
Own shares are deducted from shareholders’ equity. A transfer is made to retained earnings at their weighted average cost in line with the
vesting of own shares held for the purposes of share-based payments. The number of own shares held by the Trust and the schemes are
described in Note 26.
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Opening cost
92
108
92
108
Awards granted
(11)
(16)
(11)
(16)
Closing cost
81
92
81
92
21 Capital structure
The capital structure of the Group consists of shareholders’ equity and net debt or cash. The type and maturity of the Group’s borrowings are
analysed further in Note 16. Capital is managed with the objective of maximising long-term return to shareholders, whilst maintaining a capital
base to allow the Group to operate effectively in the market and sustain the future development of the business.
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Cash and deposits
412
358
381
328
Borrowings and derivative financial liabilities
(1,198)
(1,202)
(1,198)
(1,202)
Net debt1
(786)
(844)
(817)
(874)
Total equity
24,611
20,170
24,267
19,581
Gearing (net debt/total equity)
3%
4%
3%
4%
1
The above numbers have been prepared under IFRS and differ from the Investment basis as detailed in the Strategic report.
Capital constraints
The Group is generally free to transfer capital from subsidiary undertakings to the parent company, subject to maintaining each subsidiary
with sufficient reserves to meet local statutory/regulatory obligations. No significant constraints (other than those disclosed in Note 12) have
been identified and the Group has been able to distribute profits as appropriate.
The Group has been subject to the FCA’s MIFIDPRU sourcebook (“MIFIDPRU”) since 1 January 2022. The regulatory capital requirements for
the Group and 3i Investments plc, an investment firm regulated by the FCA, are calculated in accordance with MIFIDPRU 2.5, 4.3, 4.5 and 4.6.
These capital requirements are reviewed regularly by the Group’s Audit and Compliance Committee, and the Board of 3i Investments plc,
respectively. In addition, 3i Investments plc prepares an Internal Capital and Risk Assessment (“ICARA”), which is approved by the Board of
3i Investments plc on an annual basis.
Audited financial statements
Notes to the accounts continued
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22 Interests in Group entities
Accounting policy:
The Company has controlling equity interests in, and makes loans to, both consolidated and fair valued Group entities. Equity investments
in, and loans to, investment entities are held at fair value in the Company’s accounts, as this reflects the Group’s business model to hold
assets to seek returns on capital and not contractual cash flow. The net assets of these entities represent fair value. Equity investments in
other subsidiaries are held at cost less impairment and any loans to these subsidiaries are held at amortised cost in accordance with IFRS 9,
which includes the requirement to calculate expected credit losses on initial recognition.
Company
2025
Equity
investments
£m
Company
2025
Loans
£m
Company
2025
Total
£m
Opening book value
3,139
2,738
5,877
Additions
73
1,899
1,972
Share of profits from partnership entities
–
956
956
Disposals and repayments
(536)
(1,882)
(2,418)
Fair value movements
318
(122)
196
Exchange movements
–
59
59
Closing book value
2,994
3,648
6,642
Company
2024
Equity
investments
£m
Company
2024
Loans
£m
Company
2024
Total
£m
Opening book value
5,061
2,806
7,867
Additions
29
173
202
Share of profits from partnership entities
–
2,548
2,548
Disposals and repayments
–
(2,752)
(2,752)
Fair value movements
(1,951)
(72)
(2,023)
Exchange movements
–
35
35
Closing book value
3,139
2,738
5,877
Equity investments in, and loans to investment entities, are held at fair value and equity investments in other subsidiaries are held at cost less
impairment. The measurements at fair value and cost less impairment are assessed against the Company’s equity and loan instruments into
these subsidiaries, which are eliminated on consolidation for the Group. For this reason equity investments and loans into investments entities
do not form part of the investment portfolio for the Company and instead are included within Interests in Group entities. Amounts for equity
investments in, and loans to, investment entities held at fair value and other subsidiaries at amortised cost are detailed in Note 13.
Details of significant Group entities are given in Note 29. No expected credit losses have been recognised on those equity investments
and loans held at amortised cost as they are not material.
Audited financial statements
Notes to the accounts continued
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23 Commitments
Accounting policy:
Commitments represent amounts the Group has contractually committed to pay third parties but do not yet represent a charge or asset.
This gives an indication of committed future cash flows. Commitments are recognised in the balance sheet at the point of settlement
subject to associated risks and rewards being transferred. Commitments at the year-end do not impact the Group’s financial results
for the year.
Group
2025
due within
1 year
£m
Group
2025
due between
2 and 5 years
£m
Group
2025
due over
5 years
£m
Group
2025
Total
£m
Group
2024
due within
1 year
£m
Group
2024
due between
2 and 5 years
£m
Group
2024
due over
5 years
£m
Group
2024
Total
£m
Unquoted investments
7
–
–
7
8
–
–
8
Company
2025
due within
1 year
£m
Company
2025
due between
2 and 5 years
£m
Company
2025
due over
5 years
£m
Company
2025
Total
£m
Company
2024
due within
1 year
£m
Company
2024
due between
2 and 5 years
£m
Company
2024
due over
5 years
£m
Company
2024
Total
£m
Unquoted investments
7
–
–
7
8
–
–
8
The amounts shown above include £7 million of commitments made by the Group and Company, to invest into funds (31 March 2024:
£8 million). The Group and Company were contractually committed to these investments as at 31 March 2025.
24 Contingent liabilities
Accounting policy:
Contingent liabilities are potential liabilities where there is even greater uncertainty, which could include a dependency on events not
within the Group’s control, but where there is a possible obligation. Contingent liabilities are only disclosed and not included within the
Consolidated statement of financial position.
At 31 March 2025, there was no (31 March 2024: no) material litigation outstanding, nor any other matter, against the Company or any of its
subsidiary undertakings, which may indicate the existence of a contingent liability.
Audited financial statements
Notes to the accounts continued
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25 Retirement benefits
Accounting policy:
Payments to defined contribution retirement benefit plans are charged to profit and loss as they fall due.
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit method with actuarial valuations
being carried out at each balance sheet date. Interest on the net defined benefit asset/liability, calculated using the discount rate used to
measure the defined benefit obligation, is recognised in profit and loss. Re-measurement gains or losses are recognised in full as they arise
in other comprehensive income.
A retirement benefit deficit is recognised in the Consolidated statement of financial position to the extent that the present value of the
defined benefit obligations exceeds the fair value of plan assets.
A retirement benefit surplus is recognised in the Consolidated statement of financial position where the fair value of plan assets exceeds
the present value of the defined benefit obligations limited to the extent that the Group can benefit from that surplus. Where the
retirement benefit scheme is in surplus, this is recognised net, being the lower of any surplus in the fund and the asset ceiling.
(i) Defined contribution plans
The Group operates a number of defined contribution retirement benefit plans for qualifying employees throughout the Group. The assets
of these plans are held separately from those of the Group. The total expense recognised, in operating expenses, in profit and loss
is £3 million (2024: £3 million), which represents the contributions paid to these defined contribution plans. There were no outstanding
payments due to these plans at the balance sheet date.
(ii) Defined benefit plans
The Group operates a final salary defined benefit plan for qualifying employees of its subsidiaries in the UK (“the Plan”). The Plan is approved
by HMRC for tax purposes, is operated separately from the Group and governed by an independent set of Trustees, whose appointment
and powers are determined by the Plan’s documentation.
The defined benefit plan is a funded scheme, the assets of which are independent of the Company’s finances and administered by
the Trustees. The Trustees are responsible for managing and investing the Plan’s assets and for monitoring the Plan’s funding position.
The Plan had previously entered into bulk annuity or “buy-in” policies which meant that the Plan benefits of all members were insured and 3i,
as sponsor, is no longer exposed to longevity, interest or inflation risk. On an IAS 19 basis, the fair value of three buy-in policies matched the
present value of the liabilities insured. During the year, the Plan completed a buy-out meaning that the buy-in policies were converted into
individual annuity policies held in each Plan member’s name, thereby fully removing the defined benefit obligation. This led to the full
settlement of the pension obligation. We have therefore allowed for settlement accounting, with the value of the settlement derived as the
value of the liability and corresponding insured asset as at the settlement date taken.
The Trustees formally commenced the wind-up of the Plan in April 2023 and have been working with 3i since then to resolve all outstanding
matters to enable the Trustees to pay the surplus less Plan expenses and tax to 3i. The Plan's only remaining assets are those surplus assets
that were not needed to complete the buy-out less expected wind-up costs.
The valuation of the Plan was updated on an IAS 19 basis by an independent qualified actuary as at 31 March 2025. The Plan’s assets
do not include any of the Group’s own equity instruments nor any property in use by the Group.
Qualifying employees in Germany are entitled to a pension based on their length of service. The future liability calculated by German
actuaries is £17 million (31 March 2024: £21 million). There is a £1 million expense (2024: £1 million) recognised in operating expenses, in profit
and loss for the year and £2 million gain (2024: nil) in other comprehensive income for this scheme. Changes in the present value of
the obligation, assumptions and sensitivities of this scheme have not been disclosed as they are not material.
The amount recognised in the Consolidated statement of financial position in respect of the Group’s defined benefit plans is as follows:
2025
£m
2024
£m
Present value of funded obligations
–
(446)
Fair value of the Plan assets
85
530
Asset restriction
(22)
(23)
Retirement benefit surplus in respect of the Plan
63
61
Retirement benefit deficit in respect of other defined benefit schemes
(17)
(21)
The total re-measurement gain recognised in other comprehensive income in respect of the Group’s defined benefit plans was £4 million
(2024: £7 million).
Audited financial statements
Notes to the accounts continued
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25 Retirement benefits continued
A retirement benefit surplus under IAS 19 is recognised in respect of the Plan on the basis that the Group is entitled to a refund of any
remaining surplus once all benefits and expenses have been settled in the expected course. The asset restriction relates to tax that would be
deducted at source in respect of a refund of the Plan surplus.
The amounts recognised in the Consolidated statement of comprehensive income in respect of the Plan are as follows:
2025
£m
2024
£m
Included in interest payable
Interest income on net defined benefit asset
3
3
Included in other comprehensive income
Asset restriction
2
7
Total
5
10
Changes in the present value of the defined benefit obligation were as follows:
2025
£m
2024
£m
Opening defined benefit obligation
446
450
Interest on Plan liabilities
3
21
Re-measurement gain/loss:
– gain from change in financial assumptions
(16)
(16)
– experience loss
1
12
Benefits paid
(4)
(21)
Settlement
(430)
–
Closing defined benefit obligation
–
446
Changes in the fair value of the Plan assets were as follows:
2025
£m
2024
£m
Opening fair value of the Plan assets
530
532
Interest on Plan assets
7
25
Actual return on Plan assets less interest on Plan assets
(15)
(4)
Expenses
(3)
(2)
Benefits paid
(4)
(21)
Settlement
(430)
–
Closing fair value of the Plan assets
85
530
The fair value of the Plan’s assets at the balance sheet date is as follows:
2025
£m
2024
£m
Annuity contracts
–
446
Cash and cash equivalents
85
84
85
530
Audited financial statements
Notes to the accounts continued
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25 Retirement benefits continued
Changes in the asset restriction were as follows:
2025
£m
2024
£m
Opening asset restriction
23
29
Interest on asset restriction
1
1
Re-measurements
(2)
(7)
Closing asset restriction
22
23
The principal assumptions made by the actuaries and used for the purpose of the year-end valuation of the Plan were as follows:
2025
2024
Discount rate
n/a
4.8%
Expected rate of pension increases
n/a
0% to 3.5%
Retail Price Index (“RPI”) inflation
n/a
3.4%
Consumer Price Index (“CPI”) inflation
n/a
2.8%
The defined benefit surplus as at 31 March 2025, is not impacted by changes in principle assumptions and mortality assumptions, this is
because the Plan has completed buy-out. The post-retirement mortality assumption used to value the benefit obligation at 31 March 2024
is 90% of the S3NA very light mortality tables, allowing for improvements in line with the CMI 2022 projections model with a long-term annual
rate of improvement of 1.75%. A smoothing parameter of 7.5, initial addition parameter of 0.5% and default weight parameters have also
been adopted.
26 Share-based payments
Accounting policy:
The Group has equity-settled and cash-settled share-based payment transactions with certain employees. Equity-settled schemes are
measured at fair value at the date of grant, which is then recognised in profit or loss over the period that employees provide services,
generally the period between the start of the performance period and the vesting date of the shares. The number of share awards
expected to vest takes into account the likelihood that performance and service conditions included in the terms of the award will be met.
Fair value is measured by use of an appropriate model which takes into account the current share price, the risk-free interest rate,
the expected volatility of the share price over the life of the award and any other relevant factors. In valuing equity-settled transactions,
no account is taken of any vesting conditions, other than conditions linked to the price of the shares of 3i Group plc. The charge is adjusted
at each balance sheet date to reflect the actual number of forfeitures, cancellations and leavers during the year. The movement
in cumulative charges since the previous balance sheet is recognised in profit and loss, with a corresponding entry in equity.
Liabilities arising from cash-settled share-based payment transactions are recognised in profit or loss over the vesting period. They are fair
valued at each reporting date. The cost of cash-settled share-based payment transactions is adjusted for the forfeitures of the participants’
rights that no longer meet the plan requirements as well as for early vesting.
The cost of the share-based payments is allocated either to operating expenses or carried interest depending on the original driver
of the award. Executive Director Long-term Incentive Plans are allocated to operating expenses.
To ensure that employees’ interests are aligned with shareholders, a significant amount of variable compensation paid to eligible employees
is deferred into shares that vest over a number of years. For legal, regulatory or practical reasons certain participants may be granted cash-
settled awards under these schemes, which are intended to replicate the financial effects of a share award without entitling the participant
to acquire shares. The weighted average fair value grant price for cash-settled awards granted during the year was 2,926p (31 March 2024:
1,956p) and the reporting price for these awards at 31 March 2025 was 3,616 pence (31 March 2024: 2,809 pence). The carrying amount of
liabilities arising from cash-settled awards at 31 March 2025 is £24 million (31 March 2024: £24 million). The total equity-settled share-based
payment reserve at 31 March 2025 is £35 million (31 March 2024: £42 million).
The cost of the share-based payments is allocated either to operating expenses or carried interest depending on the original driver
of the award. Executive Director Performance Share Awards are allocated to operating expenses.
Audited financial statements
Notes to the accounts continued
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26 Share-based payments continued
The total cost recognised in the Consolidated statement of comprehensive income is shown below:
2025
£m
2024
£m
Share awards included as operating expenses1,2
12
11
Share awards included as carried interest1
4
16
Cash-settled share awards3
12
14
28
41
1
Credited to equity.
2
For the year ended 31 March 2024, £9 million shown in Note 6 is net of a £2 million release from the bonus accrual.
3
For the year ended 31 March 2025, £11 million (2024: £13 million) is recognised in operating expenses and £1 million (2024: £1 million) is recognised in carried interest.
Movements in share awards
The number of equity and cash-settled share-based awards outstanding as at 31 March is as follows:
2025
Number
2024
Number
Outstanding at the start of the year
6,210,978
6,277,107
Granted
791,022
2,336,288
Exercised
(2,308,170)
(2,387,539)
Forfeited
(59,344)
(14,878)
Lapsed
–
–
Outstanding at the end of year
4,634,486
6,210,978
Weighted average remaining contractual life of awards outstanding in years
1.4
1.7
Weighted average fair value of awards granted (pence)
2,272
1,708
Weighted average market price at date of exercise (pence)
2,924
1,953
Details of the different types of awards are as follows:
Performance Share Awards
Performance Share Awards are granted to employees and Executive Directors under the 3i Group Discretionary Share Plan 2020
(and predecessor rules).
Employees
Performance Share Awards granted to employees (other than Executive Directors) after the financial year-end are subject to performance
conditions based on absolute and relative Total Shareholder Return over three financial years. Awards performance vest, to the extent they
satisfy the performance conditions, following the three-year performance period and are then released in the third year from the date of grant
together with a payment equal to the dividends which would have been paid on the released shares during the period from grant to release.
The method of settlement can either be equity or cash depending on the type of award. The equity awards are measured using the Monte
Carlo model. The model simulates the total shareholder return which has been incorporated into the fair value at grant date by applying
a discount to the valuation obtained.
Executive Directors
Performance Share Awards granted to Executive Directors after the financial year-end are subject to performance conditions based on
absolute and relative total shareholder return over three financial years. Awards performance vest, to the extent they satisfy the performance
conditions, following the three-year performance period. Outstanding Executive Director awards granted up to and including 2019 are
released, to the extent they have performance vested, together with a payment equal to the value of the dividends which would have been
paid on the released shares during the period from grant to release as to 50% in year three and 25% in each of years four and five. Executive
Director Performance Share Awards granted from 2020 onwards are released, to the extent they have performance vested, in the fifth year
from the date of grant together with a payment equal to the value of the dividends that would have been paid on the released shares during
the period from grant to release. The method of settlement is equity. These awards are measured using the Monte Carlo model. The model
simulates the total shareholder return which has been incorporated into the fair value at the grant date by applying a discount to the valuation
obtained. The features of the Group’s share schemes for Executive Directors are described in the Directors’ remuneration report on pages
135 to 147.
Audited financial statements
Notes to the accounts continued
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26 Share-based payments continued
Restricted Share Awards
Restricted Share Awards are granted under the 3i Group Deferred Bonus Plan 2020 (and predecessor rules) and are granted to employees
and Executive Directors after the financial year-end and are subject to continued service conditions. The shares subject to the awards are
transferred to the participants on grant subject to forfeiture if the service condition is not fulfilled and cease to be subject to forfeiture in equal
proportions generally over the three years following grant or over four years in the case of certain such awards granted to members of the
Executive Committee. Cash dividends are received by participants on the shares during the period in which they remain subject to forfeiture.
The method of settlement can either be equity or cash depending on the type of award. The equity awards are measured using the Black
Scholes model.
Infrastructure Performance Fee Share Awards
Infrastructure Performance Fee Share Awards are granted to employees in the Infrastructure team under the 3i Special Share Award Plan.
Awards are granted to employees after the financial year-end and are subject to performance conditions based on receipt by 3i plc of certain
instalments of performance fees payable by 3i Infrastructure plc under the terms of its Investment Management Agreement with 3i. The shares
vest and are released, subject to satisfying the performance conditions, in equal instalments in the first and second years after grant together
with payments equal to the value of the dividends which would have been paid on the released shares during the period from grant to
release. If the performance condition is not met in year one, the award does not lapse but is retested in year two when some or all of the
shares may vest. The method of settlement can either be equity or cash depending on the type of award. The equity awards are measured
using the Black Scholes model.
Measurement of fair values
The fair values of the plans have been measured using either the Monte Carlo model or Black Scholes model for equity share awards.
The inputs used in the measurement of the grants are based on the following assumptions:
Monte Carlo model
Black Scholes
2025
2024
2025
2024
Share price at grant date (pence)1
2,996
1,943
2,926
1,956
Fair value at grant date (pence)1
1,753
1,290
2,749
1,803
Exercise price (pence)
–
–
–
–
Expected volatility (weighted average)
27.1%
28.2%
27.7%
30.8%
Expected life (weighted average)
4 years
4 years
3 years
3 years
Dividend yield
–
–
2.1%
2.7%
Risk free interest rate
4.25%
4.70%
4.08%
4.36%
1
Where share awards are granted on multiple dates the average price is disclosed.
Expected volatility was determined by reviewing share price volatility for the expected life of each award up to the date of grant.
Holdings of 3i Group plc shares
The Group has established an employee benefit trust and the total number of 3i Group plc shares held in this trust at 31 March 2025 was
8 million (31 March 2024: 9 million). Dividend rights have been waived on these shares. The total market value of the shares held in trust based
on the year-end share price of 3,616 pence (31 March 2024: 2,809 pence) was £289 million (31 March 2024: £253 million).
Audited financial statements
Notes to the accounts continued
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27 Financial risk management
Introduction
A review of the Group’s objectives, policies and processes for managing and monitoring risk is set out in the Risk management section
on pages 80 to 93. This Note provides further detail on financial risk management, cross-referring to the Risk management section where
applicable, and includes quantitative data on specific financial risks.
The Group is a highly selective investor and each investment is subject to an individual risk assessment through an investment approval
process. The Group’s Investment Committee is part of the overall risk management framework set out in the Risk section. The risk
management processes of the Company are aligned with those of the Group and both the Group and the Company share the same
financial risks.
Financial risks
Concentration risk
3i’s investment process seeks to diversify risk through significant dispersion of investments by geography, economic sector, asset class and
size as well as through the maturity profile of its investment portfolio. Although 3i does not set maximum limits for asset allocation, it does
have a maximum exposure limit for the cost of new investments. This is detailed in the Investment policy on page 148 in the Governance
section. Quantitative data regarding the concentration risk of the portfolio across geographies can be found in the Segmental analysis in
Note 1 and in the 20 large investments table on pages 209 and 210.
Action is the largest asset in the Group’s investment portfolio. We first invested in Action in 2011 and throughout our investment have
acquired further stakes in the business seeing strong organic growth over our hold period. A 5% increase or decrease in value would result
in a £892 million (31 March 2024: £708 million) or £(892) million (31 March 2024: £(708) million) impact on the overall value. For further details
on Action refer to the Action case study on pages 20 to 23.
Credit risk
The Group is subject to credit risk on its unquoted investments, derivatives, cash and deposits. The maximum exposure is the balance sheet
amount. The Group’s cash is held with a variety of counterparties with a minimum rating above A- with 91% of the Group’s unrestricted surplus
cash held on demand in AAA rated money market funds (31 March 2024: 75%). The counterparties selected for the derivative financial
instruments were all banks with a minimum of a A- credit rating with at least one major rating agency.
The credit quality of unquoted investments, which are held at fair value and include debt and equity elements, is based on the financial
performance of the individual portfolio companies. The credit risk relating to these assets is based on their enterprise value and is reflected
through fair value movements. Further detail can be found in the Price risk – market fluctuations disclosure in this Note and the sensitivity
disclosure to changes in the valuation assumptions is provided in the valuation section of Note 13.
Liquidity risk
The liquidity outlook is monitored at least monthly by management and regularly by the Board in the context of periodic strategic reviews
of the balance sheet. The new investment pipeline and forecast realisations are closely monitored and assessed against our vintage control
policy, as described on page 80 of the Risk management section. The table below analyses the maturity of the Group’s gross contractual
liabilities.
Financial liabilities
As at 31 March 2025
Due within
1 year
£m
Due between
1 and 2 years
£m
Due between
2 and 5 years
£m
Due more
than 5 years
£m
£m
Total
£m
Gross commitments:
Fixed loan notes
56
56
591
998
1,701
Committed multi-currency facility
2
2
–
–
4
Carried interest and performance fees payable within one year
12
–
–
–
12
Trade and other payables
133
–
–
6
139
Lease liabilities
3
5
16
21
45
Derivative financial instruments
–
–
4
–
4
Total
206
63
611
1,025
1,905
Gross commitments include principal amounts and interest and fees where relevant. Carried interest and performance fees payable within
non-current liabilities of £29 million (31 March 2024: £30 million) has no stated maturity as it results from investment-related transactions and it
is not possible to identify with certainty the timing of when the investments will be sold.
Audited financial statements
Notes to the accounts continued
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27 Financial risk management continued
As at 31 March 2024
Due within
1 year
£m
Due between
1 and 2 years
£m
Due between
2 and 5 years
£m
Due more
than 5 years
£m
£m
Total
£m
Gross commitments:
Fixed loan notes
56
56
172
1,482
1,766
Committed multi-currency facility
2
2
2
–
6
Carried interest and performance fees payable within one year
24
–
–
–
24
Trade and other payables
134
–
–
5
139
Lease liabilities
4
3
15
27
49
Derivative financial instruments
–
–
–
–
–
Total
220
61
189
1,514
1,984
The Company disclosures are the same as those for the Group, with the following exceptions: carried interest and performance fees payable
due within one year is nil (31 March 2024: nil), trade and other payables due within one year is £75 million (31 March 2024: £760 million), trade
and other payables due more than five years nil (31 March 2024: nil) and lease liabilities due within one year nil (31 March 2024: nil), lease
liabilities due between one and two years nil (31 March 2024: nil), lease liabilities due between two and five years nil (31 March 2024: nil) and
lease liabilities due more than five years nil (31 March 2024: nil).
Market risk
The valuation of the Group’s investment portfolio is largely dependent on the underlying trading performance of the companies within
the portfolio, but the valuation and other items in the financial statements can also be affected by interest rate, currency and quoted market
fluctuations. The Group’s sensitivity to these items is set out below.
(i) Interest rate risk
On the liability side, the direct impact of a movement in interest rates is limited to any drawings under the committed multi-currency facility
as the Group’s outstanding debt is fixed rate. The sensitivities below arise principally from changes in interest receivable on cash and deposits.
An increase of 100 basis points, based on the closing balance sheet position over a 12-month period, would lead to an approximate increase
in total comprehensive income of £4 million (2024: £4 million) for the Group and £4 million (2024: £3 million) for the Company. In addition,
the Group and Company have indirect exposure to interest rates through changes to the financial performance and the valuation of portfolio
companies caused by interest rate fluctuations.
(ii) Currency risk
The Group’s net assets in sterling, euro, US dollar, Danish krone and all other currencies combined are shown in the table below. This
sensitivity analysis is performed based on the sensitivity of the Group’s net assets to movements in foreign currency exchange rates assuming
a 10% movement in exchange rates against sterling. The sensitivity of the Company to foreign exchange risk is not materially different from
the Group.
The Group considers currency risk on specific investment and realisation transactions. Further information on how currency risk is managed
is provided on page 89.
As at 31 March 2025
Sterling
£m
Euro
£m
US dollar
£m
Danish krone
£m
Other
£m
Total
£m
Net assets1
4,942
18,257
1,211
177
24
24,611
Sensitivity analysis
Assuming a 10% movement in exchange
rates against sterling:
Impact on net assets
n/a
1,825
120
18
2
1,965
1
The Group’s foreign exchange hedging is treated as a sterling asset within the above table.
As at 31 March 2024
Sterling
£m
Euro
£m
US dollar
£m
Danish krone
£m
Other
£m
Total
£m
Net assets1
4,817
13,947
1,180
200
26
20,170
Sensitivity analysis
Assuming a 10% movement in exchange
rates against sterling:
Impact on net assets
n/a
1,399
117
20
3
1,539
1
The Group’s foreign exchange hedging is treated as a sterling asset within the above table.
Audited financial statements
Notes to the accounts continued
3i Group plc | Annual report and accounts 2025
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27 Financial risk management continued
(iii) Price risk – market fluctuations
The Group’s management of price risk, which arises primarily from quoted and unquoted equity instruments, is through the careful
consideration of the investment, asset management and divestment decisions at the Investment Committee. The Investment Committee’s
role in risk management is detailed on page 82 in the Risk management section. A 5% change in the fair value of those investments would
have the following direct impact in profit or loss:
Group
Quoted
investment
£m
Unquoted
investment
£m
Investment
in Investment
entity
subsidiaries
£m
Total
£m
At 31 March 2025
43
875
346
1,264
At 31 March 2024
44
710
290
1,044
Company
Quoted
investment
£m
Unquoted
investment
£m
Total
£m
At 31 March 2025
43
875
918
At 31 March 2024
44
710
754
28 Related parties and interests in other entities
The Group has various related parties stemming from relationships with limited partnerships managed by the Group, its investment portfolio
(including unconsolidated subsidiaries), its advisory arrangements and its key management personnel. In addition, the Company has related
parties in respect of its subsidiaries. Some of these subsidiaries are held at fair value (unconsolidated subsidiaries) due to the treatment
prescribed in IFRS 10.
Related parties
Advisory and management arrangements
The Group acted as Investment Manager to 3iN, which is listed on the London Stock Exchange, for the year to 31 March 2025. The following
amounts have been recognised in respect of the management relationship:
Statement of comprehensive income
Group
2025
£m
Group
2024
£m
Company
2025
£m
Company
2024
£m
Unrealised loss/profits on the revaluation of investments
(23)
38
(23)
38
Fees receivable from external funds
51
50
–
–
Performance fees receivable
29
41
–
–
Dividends
33
31
33
31
Controlled investments
The Group makes investments in the equity of both unquoted and quoted investments which it controls. Control is obtained when the Group
is exposed to, or has rights to variable returns and has the ability to use its power to affect these returns. When this occurs, the Group deems
these investments to be an accounting subsidiaries under IFRS 10 and recognises them at fair value through profit or loss. Material
transactions during the year with controlled investments include £1,164 million (2024: £762 million) of proceeds received from Action’s pro-rata
capital share redemption and £433 million (2024: £377 million) dividends received from Action.
Associates
The Group makes investments in the equity of both unquoted and quoted investments where it does not have control, but may be able to
participate in the financial and operating policies of that company. IFRS presumes that it is possible to exert significant influence when the
equity holding is greater than 20%. The Group has taken the investment entity exception, as permitted by IFRS 10, and has not equity
accounted for these investments, in accordance with IAS 28, but they are related parties. There are no material transactions with associates
in the year (2024: none).
Limited partnerships
The Group manages a number of external funds which invest through limited partnerships. Group companies act as the general partners
of these limited partnerships and exert significant influence over them. There were no material transactions in respect of these limited
partnerships in the year (2024: none).
Audited financial statements
Notes to the accounts continued
3i Group plc | Annual report and accounts 2025
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28 Related parties and interests in other entities continued
Subsidiaries
The Group consists of the parent Company 3i Group plc and its subsidiaries listed in Note 29. All transactions between the Company and its
fully consolidated subsidiaries, which are related parties of the Company, are eliminated on consolidation. Material related party transactions
between the Company and its subsidiaries include drawdowns and distributions, subsidiary transfers and dividends.
During the year, the Company received £1,039 million from fellow subsidiaries (2024: £788 million) and paid £1,941 million to fellow
subsidiaries (2024: £1,013 million).
During the year, the Company disposed of its equity investment in 3i Abaco ApS a fellow subsidiary for £516 million. A fellow subsidiary of the
Group acquired the shares of 3i Abaco ApS in settlement of amounts due to subsidiaries, refer to Note 18 for further details.
The Company received dividends of £142 million (2024: £49 million) from fellow subsidiaries.
Key management personnel
The Group’s key management personnel comprise the members of the Executive Committee and the Board’s non-executive Directors.
The following amounts have been included in respect of these individuals:
Statement of comprehensive income
Group
2025
£m
Group
2024
£m
Salaries, fees, supplements and benefits in kind
6
6
Cash bonuses
3
2
Carried interest and performance fees payable
4
31
Share-based payments
9
11
Termination payments
–
–
Statement of financial position
Group
2025
£m
Group
2024
£m
Bonuses and share-based payments
22
18
Carried interest and performance fees payable within one year
5
38
Carried interest and performance fees payable after one year
13
30
No carried interest and performance fees payable is paid or accrued for the Executive or non-executive Directors, as they do not participate in
these schemes. Carried interest and performance fees paid in the year to other key management personnel was £20 million (2024: £58 million).
Simon Borrows and Jasi Halai are members of key management personnel for both 3i Group plc and Peer Holding I B.V., the Dutch holding
company for the Group’s investment in Action. In accordance with IAS 24, they are considered related parties. Neither of them received any
remuneration from Action during the year (2024: none).
Unconsolidated structured entities
The application of IFRS 12 requires additional disclosure on the Group’s exposure to unconsolidated structured entities. The Group has
exposure to a number of unconsolidated structured entities, as a result of its investment activities across its Private Equity and Infrastructure
business lines.
The Group manages a number of closed-end limited partnerships, which are either Private Equity or Infrastructure focused. The purpose of
these partnerships is to invest in Private Equity or Infrastructure investments for capital appreciation. Limited Partners, which in some cases
may include the Group, finance these entities by committing capital to them and cash is drawn down or distributed for financing investment
activity. The Group’s attributable stakes in these entities are held at fair value, fees receivable are recognised on an accruals basis and carried
interest is accrued when relevant performance hurdles are met. The carrying amount and maximum loss exposure for these entities is not
material (2024: not material).
Audited financial statements
Notes to the accounts continued
3i Group plc | Annual report and accounts 2025
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29 Subsidiaries and related undertakings
IFRS 10 deems control, as opposed to equity ownership, as the key factor when determining what meets the definition of a subsidiary. If a
group is exposed to, or has rights to, variable returns from its involvement with the investee, then under IFRS 10 it has control. This is inconsistent
with the UK’s Companies Act 2006, where voting rights being greater than 50% is the key factor when identifying subsidiaries.
Under IFRS 10, 35 of the Group’s portfolio company investments are considered to be accounting subsidiaries. As the Group applies the
investment entity exception available under IFRS 10, these investee companies are classified as investment entity subsidiaries.
The Companies Act 2006 requires disclosure of certain information about the Group’s related undertakings. Related undertakings are subsidiaries,
joint ventures, associates and other significant holdings. In this context, significant means either a shareholding greater than or equal to 20%
of the nominal value of any class of shares or a book value greater than 20% of the Group’s assets.
The Company’s related undertakings at 31 March 2025 are listed below:
Subsidiaries
3i Holdings plc
100% ordinary shares
1
3i Investments plc
100% ordinary shares
1
3i plc
100% ordinary shares
1
3i International Holdings
100% ordinary shares
1
Investors in Industry plc
100% ordinary shares/
cumulative preference
shares
1
3i Corporation
100% ordinary shares
2
3i Deutschland Gesellschaft für
Industriebeteiligungen mbH
100% ordinary shares
4
Gardens Nominees Limited
100% ordinary shares
1
Gardens Pension Trustees
Limited
100% ordinary shares
1
3i Europe plc
100% ordinary shares
1
3i Nominees Limited
100% ordinary shares
1
3i Osprey GP Limited
100% ordinary shares
1
3i Nordic plc
100% ordinary shares
1
3i GP 2004 Limited
100% ordinary shares
3
3i Ademas LP
100% partnership interest
3
The 3i Group Employee Trust
n/a
6
3i International Services plc
100% ordinary shares
1
3i EFV Nominees A Limited
100% ordinary shares
1
3i EFV Nominees B Limited
100% ordinary shares
1
3i India Private Limited
100% ordinary shares
7
3i Sports Media (Mauritius)
Limited
100% ordinary shares
8
3i EFV GP Limited
100% ordinary shares
1
IIF SLP GP Limited
100% ordinary shares
3
3i Buyouts 2010 A LP
85% partnership interest
1
3i Buyouts 2010 B LP
79% partnership interest
1
3i Buyouts 2010 C LP
60% partnership interest
1
GP CCC 2010 Limited
100% ordinary shares
3
3i GC GP Limited
100% ordinary shares
1
3i GP 2010 Limited
100% ordinary shares
1
3i Growth Capital A LP
100% partnership interest
1
3i Growth Capital G LP
100% partnership interest
1
3i Growth 2010 LP
85% partnership interest
1
Strategic Investments FM
(Mauritius) Alpha Limited
70% ordinary shares
8
3i GC Nominees A Limited
100% ordinary shares
1
Description
Holding/share class
Footnote
3i GC Nominees B Limited
100% ordinary shares
1
3i India Infrastructure Fund B LP 99% partnership interest
1
3i 2004 GmbH & Co. KG
100% partnership interest
4
3i General Partner 2004 GmbH
100% ordinary shares
4
3i PE 2013-16 A LP
100% partnership interest
1
3i PE 2013-16 C LP
100% partnership interest
1
3i GP 2013 Ltd
100% ordinary shares
1
GP 2013 Ltd
100% ordinary shares
3
BAM General Partner Limited
100% ordinary shares
1
3i PE 2016-19 A LP
100% partnership interest
1
3i Managed Infrastructure
Acquisitions GP (2017) LLP
100% partnership interest
1
3i Managed Infrastructure
Acquisitions GP Limited
100% ordinary shares
1
3i 2016 GmbH & Co. KG
100% partnership interest
4
GP 2016 Limited
100% ordinary shares
3
3i GP 2016 Limited
100% ordinary shares
1
3i SCI Holdings Limited
100% ordinary shares
1
3i North American Infrastructure
Partners, LLC
100% equity units
26
3i Abaco ApS
100% ordinary shares
23
3i Investments (Luxembourg) S.A. 100% ordinary shares
10
3i 2019-22 DLP SCSp
100% partnership interest
10
3i PE 2019-22 A LP
100% partnership interest
1
3i PE 2019-22 B LP
100% partnership interest
1
3i PE 2019-22 Warehouse LP
100% partnership interest
3
3i 2020 Co-investment LP
100% partnership interest
3
3i GP 2019 Limited
100% ordinary shares
1
3i GP 2020 Limited
100% ordinary shares
3
3i GP 2019 s.a.r.l
100% ordinary shares
10
3i GP 2019 (Scots) Limited
100% ordinary shares
3
3i 2020 Co-investment GP s.a.r.l
100% ordinary shares
10
3i France SAS
100% ordinary shares
16
3i IP Acquisitions Limited
100% ordinary shares
1
3i IP Acquisitions GP LLP
100% partnership interest
1
3i IIF GP 2020 Limited
100% ordinary shares
1
3i IIF GP LLP
100% partnership interest
1
Description
Holding/share class
Footnote
Audited financial statements
Notes to the accounts continued
3i Group plc | Annual report and accounts 2025
196
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29 Subsidiaries and related undertakings continued
Description
Holding/share class
Footnote
3i Benelux B.V.
100% ordinary shares
12
3i Mountain LP
99% partnership interest
3
3i NAI Holdings GP Limited
100% ordinary shares
3
3i PE 2022-25 A LP
100% partnership interest
1
3i PE 2022-25 B LP
100% partnership interest
1
3i GP 2022 Limited
100% ordinary shares
1
3i GP 2022 (Scots) Limited
100% ordinary shares
3
3i PE 2022-25 A (Lux) SCSp
99% partnership interest
10
3i PE 2022-25 B (Lux) SCSp
99% partnership interest
10
3i GP 2022 s.a.r.l
100% ordinary shares
10
3i North American Infrastructure
Fund A LP
100% partnership interest
26
3i NAI Holdings LP
100% partnership interest
3
3i North American Infrastructure
GP, LLC
100% equity units
26
3i ECW Coinvest GP, LLC
100% equity units
26
3i European Mid-Market
Infrastructure GP (2024) Limited 100% ordinary shares
1
3i RR Coinvest GP, LLC
100% equity units
26
3i Aura GP (2022) Limited
100% ordinary shares
1
3i Zephyr GP (2022) Limited
100% ordinary shares
1
3i Infra GP 2022 (Scots) Limited
100% ordinary shares
3
3i Infra 2022 Warehouse LP
100% partnership interest
3
3i 2023 Co-investment LP
100% partnership interest
1
3i MME Coinvest GP, LLC
100% equity units
26
3i NAI Warehouse LP
100% partnership interest
26
3i NAI Warehouse GP LLC
100% equity units
26
3i 2024 Sapphire LP
100% partnership interest
1
3i PE 2025-28 A LP
100% partnership interest
1
3i PE 2025-28 B LP
100% partnership interest
1
3i PE 2025-28 C LP
100% partnership interest
1
3i PE 2025-28 A (Lux) SCSp
100% partnership interest
10
3i PE 2025-28 B (Lux) SCSp
100% partnership interest
10
Associates
3i Growth Carry A LP
25% partnership interest
3
3i Growth Carry B LP
25% partnership interest
3
Strategic Investments FM
(Mauritius) B Limited
36% ordinary shares
8
3i Growth Capital B LP
36% partnership interest
1
3i 2020 Co-investment 1 SCSp
31% partnership interest
10
3i 2020 Co-Investment 2 SCSp
27% partnership interest
10
3i 2020 Co-Investment 4 SCSp
43% partnership interest
10
Moon Topco GmbH
49% ordinary shares
13
Description
Holding/share class
Footnote
Layout Holdco A/S
49% ordinary shares
14
Boketto Holdco Limited
47% ordinary shares
15
Klara HoldCo S.A.
43% ordinary shares
10
Shield Holdco LLC
49% equity units
2
Q Holdco Limited
42% ordinary shares
18
3i Infrastructure plc
29% ordinary shares
17
Peer Holding I B.V.
49% ordinary shares
19
AES Engineering Limited
43% ordinary shares
20
Carter Thermal Industries
Limited
32% ordinary shares
21
Harper Topco Limited
42% ordinary shares
22
Orange County Fundo de
Investmento EM Participacoes
40% equity units
25
Tato Holdings Limited
27% ordinary shares
27
Nimbus Communications Ltd
30% ordinary shares
28
Aurela TopCo GmbH
49% ordinary shares
5
C Medical Holdco, LLC
49% equity units
2
Crown Holdco B.V.
49% ordinary shares
40
3i India Infrastructure Holdings Ltd 21% ordinary shares
8
Racing Topco GmbH
49% ordinary shares
24
Panda Holdco LLC
49% equity units
44
Scandlines Infrastructure ApS
35% ordinary shares
29
Alinghi 1 S.A.S
49% ordinary shares
11
SaniSure Holdings GP LLC
49% equity units
2
New Amsterdam Software GP LLC 49% equity units
30
Garden & House
International GmbH
36% ordinary shares
31
T&J Holdco Limited
49% ordinary shares
9
WHCG GP LLC
49% equity units
30
Hydra Holdco B.V.
49% ordinary shares
38
European Bakery Group B.V.
49% ordinary shares
39
Himalaya Topco B.V.
46% ordinary shares
37
MAIT Group GmbH
49% ordinary shares
32
Ten23 Health GP LLC
49% equity units
30
George Topco Limited
49% ordinary shares
33
xSuite Top Holding GmbH
49% ordinary shares
34
Balearia Topco B.V.
49% ordinary shares
35
Kite Topco ApS
49% ordinary shares
36
Pegase 1 SAS
49% ordinary shares
41
Aqua Topco Limited
49% ordinary shares
42
Marathon TopCo GmbH
49% ordinary shares
43
Audited financial statements
Notes to the accounts continued
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29 Subsidiaries and related undertakings continued
There are no joint ventures or other significant holdings. The 20 large portfolio companies by fair value are detailed on pages 209 and 210.
The combination of the table above and that on pages 209 and 210 is deemed by the Directors to fulfil the requirements under IFRS 12
on the disclosure of material subsidiaries.
Footnote
Address
1
1 Knightsbridge, London, SW1X 7LX, UK
2
300 Park Avenue, 23rd Fl, New York, NY 10022, USA
3
50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ, UK
4
OpernTurm, Bockenheimer Landstresse 2-4, 60306 Frankfurt am Main, Germany
5
Seelbüde 13, 36110 Schlitz, Germany
6
13 Castle Street, St Helier, JE1 1ES, Jersey
7
Level 7, The Capital B-Wing, Bandra Kurla Complex, Bandra East, Mumbai, 400051, India
8
5th Floor, Ebene Esplanade, 24 Bank Street, Cybercity, Ebene, Mauritius
9
Floor 2, Trident 3, Trident Business Park, Styal Road, Manchester, M22 5XB, UK
10
5 place de la gare, L-1616, Luxembourg
11
16 place de l’Iris, 92 400 Courbevoie, France
12
Cornelis Schuytstraat 74, 1071JL Amsterdam, Netherlands
13
Einsteinring 10, 85609 Aschheim, Germany
14
Mørupvej 16 Mørup, 7400 Herning, Denmark
15
New Mill, New Mill Lane, Witney, Oxfordshire, OX29 9SX, UK
16
29-31, rue de Berri, 75008 Paris, France
17
Aztec Group House, IFC 6, The Esplanade, St. Helier, JE2 3BZ, Jersey
18
1 Bartholomew Lane, London, EC2N 2AX, UK
19
Perenmarkt 15, Zwaagdijk East, 1681PG, Netherlands
20
Bradmarsh Business Park, Mill Close, Rotherham, South Yorkshire, S60 1BZ, UK
21
90 Lea Ford Road, Birmingham, B33 9TX, UK
22
25 Eccleston Place, London, SW1W 9NF, UK
23
Nybrogade 12, 1203 Copenhagen, Denmark
24
Schanzenstr. 6-20, Gebäude 2.08, 51063 Cologne, Germany
25
Avenida Brigadeiro Faria Lima, 2055, 19 andar, 01452-001 – Sao Paulo, SP, Brazil
26
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle, Delaware, DE 19801, USA
27
Thor Specialities (UK) Limited, Wincham Avenue, Wincham, Northwich, CW9 6GB, UK
28
44 Oberoi Complex, Andheri (West), Mumbai, India
29
Havneholmen 25, 8.,1561 Copenhagen, Denmark
30
251 Little Falls Drive, Wilmington, New Castle, Delaware, DE 19808, USA
31
Bahrenfelder Chaussee 49, 22761, Hamburg, Germany
32
Berner Feld 10, 78628 Rottweil, Germany
33
Milton Gate, 60 Chiswell Street, London, EC1Y 4AG, UK
34
Hamburger Str. 12, 22926 Ahrensburg, Germany
35
Herengracht 262, 1016 BV Amsterdam, Netherlands
36
Kuglegårdsvej 13-17, Building 13 | 1434 Copenhagen, Denmark
37
Aalsvoort 101, 7241 MB Lochem, Netherlands
38
Weidehek 46, 4824 AS Breda, Netherlands
39
Kronosstraat 2, 5048 CE Tilburg, Netherlands
40
Industriepark Vliedberg 12, 5251 RG Vlijmen, Netherlands
41
199 Bureaux de la Colline, Saint Cloud 92210 France
42
c/o Streets, Suite 43 Michael Way, Raunds, Wellingborough, NN9 6GR, UK
43
c/o Meissner Schäfer Thomas Steuerberater Partnerschaftsgesellschaft, Stephanstraße, Frankfurt am Main 60313, Germany
44
18801 North Thompson Peak Parkway Suite D-320, Scottsdale, AZ 85255, USA
Audited financial statements
Notes to the accounts continued
3i Group plc | Annual report and accounts 2025
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1. Our opinion is unmodified
In our opinion:
• the financial statements of 3i Group plc give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 March 2025,
and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards as applied
in accordance with the provisions of the Companies Act 2006; and
• the Group and Parent Company financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
What our opinion covers
We have audited the Group and Parent Company financial statements of 3i Group plc (“the Company”) for the year ended 31 March 2025 (FY2025) included
in the Annual Report and Accounts, which comprise:
Group (3i Group plc and its subsidiaries)
Parent Company (3i Group plc)
Consolidated statement of comprehensive income
Company statement of financial position
Consolidated statement of financial position
Company statement of changes in equity
Consolidated statement of changes in equity
Company cash flow statement
Consolidated cash flow statement
Notes to the accounts, including the summary of material accounting policies
Notes to the accounts, including the summary of material accounting policies
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below.
We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion and matters included in this report
are consistent with those discussed and included in our reporting to the Audit and Compliance Committee (“ACC”).
We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with UK ethical requirements, including the FRC
Ethical Standard as applied to listed public interest entities.
2. Overview of our audit
Factors driving our view of risks
Following our FY2024 audit, we have updated our risk assessment based on
changes in the Group and the macroeconomic environment.
The global macro-economic and geopolitical environment continues to drive
our risk assessment as it has the potential to impact both the performance of
the portfolio companies, and the equity markets.
The macro-economic environment stabilised in 2024, with interest rates
across most major economies having seen small reductions and inflation
slowly trending towards central bank target levels. Since early 2025, there has
been downward pressure and volatility in the global equity markets, primarily
driven by the US political environment.
In addition, since March 2025, the US government announced a series of new
tariffs against all major economies globally. Although some of the tariff
arrangements are currently on hold, the tariffs have a multifaceted impact on
businesses globally and resulted in significant volatility in the equity markets
in early April 2025.
The Group’s largest investment, Action, has continued its strong
performance, driven by new store openings, growth in like-for-like sales, and
a focus on margin management. The rest of the portfolio companies
delivered differing levels of performance, with some requiring additional
support from 3i.
The volatility in the equity markets also impacted the valuations of both listed
and unlisted equity. The direct impact for 3i includes the volatility in the
multiples and discount rates used to value portfolio companies.
Last year we identified the risk associated with the valuation of unquoted
investments to be heightened, due to the challenging macro-economic
environment. Whilst we noted improvements in 2024, the market volatility
and US tariff situation in early 2025 has resulted in judgement required from
the Group in their selection of appropriate valuation inputs, particularly the
key assumptions used. These key assumptions continue to be the focus
of our audit and are outlined in greater detail in section 4.
In the prior period, we identified the carried interest payable included in
investment entity subsidiaries as an area where the risk of material
misstatement was heightened. Following the reduction in the size of the
balance, primarily driven by crystallisations in carried interest schemes
relating to Action, we have not assessed this as an area with heightened
audit risks this year.
Audited financial statements
KPMG LLP’s independent auditor’s report
to the members of 3i Group plc
3i Group plc | Annual report and accounts 2025
199
Key Audit Matters (Group and Parent Company)
Vs FY2024 Items
Valuation of Unquoted Investments
(Group and Parent Company)
4.1
Newly identified risk
Similar risk to FY2024
Increase in risk since FY2024
Decrease in risk since FY2024
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Audit and compliance committee interaction
During the year, the ACC met 6 times. KPMG are invited to attend all ACC
meetings and are provided with an opportunity to meet with the ACC in
private sessions without the Executive Directors being present. For the Key
Audit Matter, we have set out communications with the ACC in section 4,
including matters that required particular judgement.
The matters included in the Audit and Compliance Committee Chair’s report
on page 121 are materially consistent with our observations of those meetings.
Our independence
We have fulfilled our ethical responsibilities and remain independent of the
Group in accordance with UK ethical requirements, including the FRC Ethical
Standard as applied to listed public interest entities.
We have not performed any non-audit services during the year ended
31 March 2025 or subsequently which are prohibited by the FRC Ethical
Standard.
We were first appointed as auditor by the shareholders for the year ended
31 March 2021. The period of total uninterrupted engagement is for the five
financial years ended 31 March 2025.
The Group engagement partner is required to rotate every 5 years. As these
are the fifth set of the Group’s financial statements signed by Jonathan Mills,
he will be required to rotate off after this year’s audit.
Materiality (item 6 below)
The scope of our work is influenced by our view of materiality and our
assessed risk of material misstatement.
We have determined overall materiality for the Group financial statements
as a whole at £195m (FY2024: £176m) and for the Parent Company financial
statements as a whole at £194m (FY2024: £159m).
A key judgement in determining materiality was the most relevant metric
to select as the benchmark, by considering which metrics have the greatest
bearing on shareholder decisions.
Consistent with FY2024, we determined that Total Assets remains the
benchmark for the Group as the valuation of the investment portfolio remains
the key financial measure. As such, we based our Group materiality on Total
Assets, of which it represents 0.75% (FY2024: 0.8%).
Materiality for the Parent Company financial statements was determined with
reference to a benchmark of Parent Company Total Assets of which it
represents 0.76% (FY2024: 0.75%).
Group scope (item 7 below)
We have performed risk assessment and planning procedures to determine
which of the Group’s components are likely to include risks of material
misstatement to the Group financial statements.
We identified the group as a whole to be a single component, having
considered our evaluation of the Group’s operational structure, the Group’s
legal structure, the existence of common information systems, and our ability
to perform audit procedures centrally.
Accordingly, we performed audit procedures on the single component.
All procedures were performed by the Group team.
We consider the scope of our audit, as communicated to the Audit and
Compliance Committee, to be an appropriate basis for our audit opinion.
The impact of climate change on our audit
In planning our audit, we have considered the potential impacts of climate
change on the Group’s business and its financial statements.
Climate change impacts the Group in a variety of ways including the impact
of climate risk on investment valuations, potential reputational risk associated
with the Group’s delivery of its climate related initiatives, and greater
emphasis on climate related narrative and disclosure in the annual report.
The Group’s exposure to climate change is primarily through the portfolio
companies, as the key valuation assumptions and estimates may be impacted
by climate change risks.
We have performed a risk assessment of how the impact of climate change
may affect the financial statements and our audit, in particular over the
valuation of portfolio companies. Our assessment of the impact of climate
change was limited to the valuation of unquoted investments.
For the biggest asset in the portfolio, Action, we read the company’s
sustainability report to understand the climate change risks and considered
the impact on its valuation. On the basis of the risk assessment procedures
performed above, we concluded that, while climate change posed a risk to
the determination of the valuation of portfolio companies due to the potential
impact on the maintainability of valuation earnings or free cash flow forecasts,
the risk was not significant when we considered the portfolio of investments.
As a result, there was no material impact from this on our key audit matter.
We have also read the disclosure of climate related information in the front
half of the annual report as set out on pages 58 to 68 and considered
consistency with the financial statements and our audit knowledge. We have
not been engaged to provide assurance over the accuracy of these
disclosures.
Audited financial statements
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Total audit fee
£2.4m (FY2024: £2.4m)
Audit related fees
(including interim review)
£0.4m (FY2024: £0.4m)
Non-audit fee as a % of total audit
and audit related fee %
14% (FY2024: 14%)
Date first appointed
25 June 2020
Uninterrupted audit tenure
5 years
Next financial period which
requires a tender
31 March 2031
Tenure of Group engagement
partner
5 years
Materiality levels used in our audit
Group
Group Materiality
GPM
Group Performance
Materiality
PLC
Parent Company
Materiality
AMPT
Reporting Differences
Threshold
l FY2024 £m
l FY2025 £m
176
132
159
9
195
146
194
10
Group
GPM
PLC
AMPT
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3. Going concern, viability and principal risks and uncertainties
The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Parent Company or to
cease their operations, and they have concluded that the Group’s and the Parent Company’s financial position means that this is realistic. They have also
concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from
the date of approval of the financial statements (“the going concern period”).
Going concern
We used our knowledge of the Group and Parent Company, its industry, and
the general economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s and Parent
Company’s financial resources or ability to continue operations over the going
concern period. The risks that we considered most likely to adversely affect
the Group’s and Parent Company’s available financial resources over this
period were:
• Continued geopolitical tension and/or macro-economic downturn
impacting the performance of portfolio companies, which may require the
Group to provide further liquidity support, reduce dividend income and
result in delays to the realisation of the Group’s investments;
• A material downturn in performance of the Group’s largest portfolio
company, Action, resulting in a reduction in dividends or even requiring
liquidity support; and
• A combination of the two scenarios.
We considered whether these risks could plausibly affect the liquidity in the
going concern period by comparing severe, but plausible downside scenarios
that could arise from these risks individually and collectively against the level
of available financial resources indicated by the Group’s financial forecasts.
Our procedures also included an assessment of whether the going concern
disclosure in Accounting Policy A to the financial statements gives a complete
and accurate description of the Directors’ assessment of going concern.
Accordingly, based on those procedures, we found the Directors’ use of the
going concern basis of accounting without any material uncertainty for the
Group and Parent Company to be acceptable.
However, as we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the above
conclusions are not a guarantee that the Group or the Parent Company will
continue in operation.
Our conclusions
• We consider that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate;
• We have not identified, and concur with the Directors’ assessment that
there is not, a material uncertainty related to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s or
Parent Company's ability to continue as a going concern for the going
concern period;
• We have nothing material to add or draw attention to in relation to the
Directors’ statement in Accounting Policy A to the financial statements on
the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and Parent
Company’s use of that basis for the going concern period, and we found
the going concern disclosure in Accounting Policy A to be acceptable; and
• The related statement under the Listing Rules set out on page 148 is
materially consistent with the financial statements and our audit knowledge.
Disclosures of emerging and principal risks and longer-term viability
Our responsibility
We are required to perform procedures to identify whether there is a material
inconsistency between the Directors’ disclosures in respect of emerging and
principal risks and the viability statement, and the financial statements and
our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
• the Directors’ confirmation within the Principal risks and mitigations
statement that they have carried out a robust assessment of the emerging
and principal risks facing the Group, including those that would threaten its
business model, future performance, solvency and liquidity;
• the Principal risks and mitigations disclosures describing these risks and
how emerging risks are identified and explaining how they are being
managed and mitigated; and
• the Directors’ explanation in the Viability Statement of how they have
assessed the prospects of the Group, over what period they have done so
and why they considered that period to be appropriate, and their
statement as to whether they have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities as they
fall due over the period of their assessment, including any related
disclosures drawing attention to any necessary qualifications or
assumptions.
We are also required to review the Viability statement set out on pages 128
and 129 under the Listing Rules.
Our work is limited to assessing these matters in the context of only the
knowledge acquired during our financial statements audit. As we cannot
predict all future events or conditions, and as subsequent events may result in
outcomes that are inconsistent with judgements that were reasonable at the
time they were made, the absence of anything to report on these statements
is not a guarantee as to the Group’s and Parent Company’s longer-term
viability.
Our reporting
We have nothing material to add or draw attention to in relation to these
disclosures.
We have concluded that these disclosures are materially consistent with
the financial statements and our audit knowledge.
Audited financial statements
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4. Key audit matters
What we mean
Key audit matters are those matters that, in our professional judgement, were
of most significance in the audit of the financial statements and include the
most significant assessed risks of material misstatement (whether or not due
to fraud) identified by us, including those which had the greatest effect on:
• the overall audit strategy;
• the allocation of resources in the audit; and
• directing the efforts of the engagement team.
We include below the Key Audit Matter together with our key audit
procedures to address that matter and our results from those procedures.
This matter was addressed, and our results are based on procedures
undertaken, for the purpose of our audit of the financial statements
as a whole. We do not provide a separate opinion on this matter.
4.1 Valuation of unquoted investments (Group and Parent Company)
Financial Statement Elements
Our assessment of risk vs FY2024
Our results
FY2025
FY2024
Our assessment of the risk is similar to
FY2024.
FY2025:
Acceptable
FY2024:
Acceptable
Unquoted investments – Group and parent
£17,500m
£14,193m
Investments in investment entity subsidiaries
£6,916m
£5,804m
Interests in group entities – Parent Company,
£6,385m
£5,804m
Description of the Key Audit Matter
Our response to the risk
Subjective valuation
The investment portfolio comprises a number of unquoted investments.
As these investments are unquoted and illiquid, the fair value is determined
through the application of valuation techniques, which requires the exercise
of significant judgement by the Group and Parent Company in relation to the
assumptions and inputs into the respective models.
The valuations of unquoted financial instruments are considered to have a
significant risk due to fraud or error as they are driven by significant
unobservable inputs, which present an opportunity for misstatement of
financial statements due to significant judgement and related estimation
uncertainty.
The key areas where we identified greater levels of judgement and therefore
increased levels of audit focus in the Group’s valuations are maintainable
earnings and market multiples under the market approach, as well as the
forecasted cash flow, discount rate and terminal value under the income
approach.
We have determined that due to the subjective nature of the estimates
required in the fair value measurement of unquoted investments and the
associated high degree of estimation uncertainty, there is a potential range
of reasonable outcomes greater than our materiality for the financial
statements as a whole, and possibly many times that amount. The fair value
of assets and liabilities section of the financial statements (pages 176 to 179)
disclose the sensitivities estimated by the Group.
Control design: We assessed the design and implementation of the
investment valuation processes and controls, as required by professional
standards.
Benchmarking assumptions: We challenged the Group and Parent
Company on key judgements affecting portfolio company valuations by
comparing assumptions made to external sources such as management
information received from portfolio companies. We used our understanding
of the portfolio companies to assess the assumptions around maintainability
of earnings, and the comparability of companies selected by management to
calibrate their valuations multiple or the discount rate.
Our valuation expertise: For a sample of investments, selected based on
audit materiality and the risk profile of each investment, we used our own
valuations specialists to assist us in assessing the principles and
appropriateness of the valuation methodology, critically challenging the key
assumptions, and independently providing a reasonable range for earnings
multiples and discount rates, where applicable.
Understanding of the business: For the largest asset in the portfolio,
Action, we visited its Head Office in the Netherlands, and held discussions
with Action’s management and external audit team to understand the
business strategy, key processes and controls, how accounting estimates are
made, and any key audit findings.
Historical comparisons: We compared the actual performance or cash
flows achieved by portfolio companies to the inputs used in the valuation
model for the prior year to understand the reasons for any significant
variances and determine whether they are indicative of bias and error
in the Group’s approach to valuations.
Assessing transparency: We considered the appropriateness, in
accordance with relevant accounting standards, of the disclosures in respect
of unquoted investments and the effect of changing one or more inputs to
reasonably possible alternative valuation assumptions.
We performed the testing above rather than seeking to rely on any of the
Group's controls because the nature of the balance is such that we would
expect to obtain audit evidence primarily through the detailed
procedures described.
Audited financial statements
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Communications with the 3i Group plc Audit and Compliance
Committee and Valuations committee
Our discussions with and reporting to the Audit and Compliance Committee
and the Valuations Committee included:
• Our approach to the audit of the fair value of the unquoted investment
portfolio including details of our planned substantive procedures and the
extent of our controls reliance;
• Our conclusions on the appropriateness of 3i’s fair value methodology
and policy;
• Our conclusions on the appropriateness of the valuation outcome for
individual portfolio companies and, for the sample of investments where
we were assisted by our valuation specialists, an indication of where the
Group’s valuations multiple and discount rate (where applicable) falls
within our acceptable range;
• The adequacy of the sensitivity disclosures, particularly as they relate
to valuation inputs; and
• Our assessment of whether any misstatement identified through these
procedures was material.
Areas of particular auditor judgement
Auditor judgement is required to assess whether the Directors' estimate
of the following key assumptions fall within an acceptable range:
• For assets valued using an earnings multiple approach:
– Determination of valuation multiples; and
– Determination of maintainable earnings (including any earnings
adjustments).
• For assets valued using a discounted cash flow approach:
– Discount rate
– Projected cash flows
– Terminal value exit multiple, and
– Terminal value earnings
Our results
Based on the risk identified and our procedures performed, we consider
the valuation of the unquoted investments to be acceptable (FY2024:
acceptable).
Further information in the Annual Report and Accounts: See the Audit and Compliance Committee Report on page 121-126 and the Valuation Committee
report on page 130-134 for details on how the committees considered Valuation as an area of significant attention, and page 174 for the accounting policy
for unquoted investments.
In the prior period, we identified the carried interest payable included in investment entity subsidiaries as a Key Audit Matter. However, following the reduction
in the size of the balance, primarily driven by crystallisations in 3i’s carry interest schemes relating to Action, we have not assessed this as one of the most
significant risks in our current year audit and, therefore, whilst we continue to perform procedures over the carried interest liability, it is not separately identified
in our report this year.
Audited financial statements
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5. Our ability to detect irregularities, and our response
Fraud – identifying and responding to risks of material misstatement due to fraud
Fraud risk assessment
To identify risks of material misstatement due to fraud (“fraud risks”) we
assessed events or conditions that could indicate an incentive or pressure to
commit fraud or provide an opportunity to commit fraud. Our risk assessment
procedures included the following:
• Meetings throughout the year with the Group General Counsel, internal
audit and Head of Compliance at which we discussed the Group’s policies
and procedures to prevent and detect fraud. Additionally, we obtained and
inspected associated supporting documentation such as:
– Board and Audit and Compliance Committee minutes;
– Internal audit reports;
– Internal risk registers; and
– Breaches register.
• Enquiries of directors, finance team, the Group General Counsel, the Head
of Compliance, internal audit, and the Audit and Compliance Committee
as to whether they have knowledge of any actual, suspected, or alleged
fraud.
• Consideration of the Group’s remuneration policies, key drivers for
remuneration and bonus levels; and
• Discussions among the engagement team regarding how and where fraud
might occur in the financial statements and any potential indicators of
fraud. The engagement team includes audit partners and staff who have
extensive experience of working with companies in the same sector as 3i
operates, and this experience was relevant to the discussion about where
fraud risks may arise.
Risk communications
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
Fraud risks
As required by auditing standards, and taking into account possible pressures
to meet performance targets, we performed procedures to address the risk of
management override of controls, in particular the risk that Group
management may be in a position to make inappropriate accounting entries
and the risk of bias in accounting estimates and judgements such as the
valuation of the unquoted investment portfolio and investment entity
subsidiaries.
On this audit we have not identified a significant risk of fraud related to
revenue recognition because the Group has a relatively simple revenue model
with no material estimation or judgement; the simple nature and low volume
of individual revenue transactions means there is a remote risk of material
misstatement from fraudulent manipulation, and opportunities for a material
misstatement due to fraudulent revenue recognition are limited due to the
nature of the portfolio income received.
We identified an additional fraud risk relating to the valuation of unquoted
investments held on balance sheet and within investment entity subsidiaries.
As these investments are unquoted and illiquid, they are valued using
valuation techniques. Such techniques are subjective and involve the exercise
of judgement by the Group and Parent Company over areas such as
maintainability of earnings used in valuations, the determination of earnings
multiples, and projected cash flows, discount factors and terminal values for
discounted cash flow valuations. In addition, the valuation of unquoted
investments drives the share price of the Group, which in turn drives
remuneration of the Executive Directors, and is a key indicator for their
performance. Due to the highly judgemental nature of these valuations,
the reliance on unobservable inputs, and the linkage to Executive Directors’
remuneration, we consider there to be increased risk of fraud in relation to
the valuation of unquoted investment portfolio.
Link to KAMs
Further detail in respect to procedures performed over the valuation of unquoted investments is contained within the key audit matter disclosures in section 4.1
of this report.
Procedures to address fraud risks
We performed substantive audit procedures including:
• Identifying journal entries to test based on risk criteria and comparing the
identified entries to supporting documentation. These included post close
journals, those journals containing high risk key words, and unusual
pairings; and
• Assessing significant accounting estimates, including valuation of unquoted
investments and investment entity subsidiaries, for any indicators of
management bias.
Laws and regulations – identifying and responding to risks of material misstatement relating to compliance
with laws and regulations
Laws and regulations risk assessment
Identifying and responding to risks of material misstatement related to
compliance with laws and regulations.
We identified areas of laws and regulations that could reasonably be
expected to have a material effect on the financial statements from our
general commercial and sector experience, and through discussion with the
Directors and other management (as required by auditing standards), and
from inspection of the Group’s regulatory and legal correspondence and
discussed with the Directors and other management the policies and
procedures regarding compliance with laws and regulations.
As the Group is regulated and operates in a highly regulated environment,
our assessment of risks involved gaining an understanding of the control
environment including the entity’s procedures for complying with regulatory
requirements. Our assessment included inspection of key frameworks, policies
and standards in place and understanding and evaluating the role of the
compliance function in establishing these and monitoring compliance.
Risk communications
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
Direct laws context and link to audit
The potential effect of these laws and regulations on the financial statements
varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the
financial statements including financial reporting legislation (including
related companies legislation), distributable profits legislation, and
taxation legislation.
We assessed the extent of compliance with these laws and regulations as part
of our procedures on the related financial statement items.
Audited financial statements
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Most significant indirect law/regulation areas
Secondly, the Group is subject to many other laws and regulations where the
consequences of non-compliance could have a material effect on amounts or
disclosures in the financial statements, for instance through the imposition of
fines or litigation or the loss of the Group’s license to operate in countries
where the non-adherence to laws could prevent trading in such countries.
We identified the following areas as those most likely to have such an effect:
• Anti-bribery and corruption;
• Competition legislation;
• Pensions legislation;
• Regulatory capital and liquidity;
• Health and safety legislation;
• Market abuse regulations; and
• Certain aspects of company legislation recognising the financial and
regulated nature of two of the Group’s subsidiaries and their legal form.
Auditing standards limit the required audit procedures to identify non-
compliance with these laws and regulations to enquiry of the Directors and
other management and inspection of regulatory and legal correspondence, if
any. Therefore, if a breach of operational regulations is not disclosed to us or
evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that
we may not have detected some material misstatements in the financial
statements, even though we have properly planned and performed our audit
in accordance with auditing standards. For example, the further removed non-
compliance with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely the inherently limited
procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection
of fraud, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit procedures
are designed to detect material misstatement. We are not responsible for
preventing non-compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
6. Our determination of materiality
The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to help us
determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements, both individually and in the
aggregate, on the financial statements as a whole.
£195m
(FY2024: £176m)
Materiality for the
group financial
statements
as a whole
What we mean
A quantitative reference for the purpose of planning and
performing our audit.
Basis for determining materiality and judgements
applied
Materiality for the Group financial statements as a whole was
set at £195m (FY2024: £176m). Consistent with FY2024, we
determined that Total Assets remains the main benchmark for
the Group as the valuation of the investment portfolio remains
the key financial measure.
Our Group materiality of £195m was determined by applying
a percentage to the Total Assets. When using an asset related
measure to determine overall materiality, KPMG’s approach
for listed public interest entities considers a guideline range
0.5% - 1% of the measure. In setting overall Group materiality,
we applied a percentage of 0.75% (FY2024: 0.8%) to the
benchmark.
Materiality for the Parent Company financial statements as a
whole was set at £194m (FY2024: £159m), determined with
reference to a benchmark of Parent Company total assets, of
which it represents 0.76% (FY2024: 0.75%).
£146m
(FY2024: £132m)
Performance
materiality
What we mean
Our procedures on individual account balances and
disclosures were performed to a lower threshold, performance
materiality, to reduce to an acceptable level the risk that
individually immaterial misstatements in individual account
balances add up to a material amount across the financial
statements as a whole.
Basis for determining performance materiality
and judgements applied
We have considered performance materiality at a level of 75%
(FY2024: 75%) of materiality for 3i Group financial statements
as a whole to be appropriate.
The Parent Company performance materiality was set at
£145m (FY2024: £119m), which equates to 75% (FY2024: 75%)
of materiality for the Parent Company financial statements
as a whole.
We applied this percentage in our determination of
performance materiality because we did not identify any
factors indicating an elevated level of risk.
£10m
(FY2024: £9m)
Audit misstatement
posting threshold
What we mean
This is the amount below which identified misstatements are
considered to be clearly trivial from a quantitative point of
view. We may become aware of misstatements below this
threshold which could alter the nature, timing, and scope
of our audit procedures, for example if we identify smaller
misstatements which are indicators of fraud.
This is also the amount above which all misstatements
identified are communicated to 3i Group plc’s Audit and
Compliance Committee.
Basis for determining the audit misstatement
posting threshold and judgements applied
We set our audit misstatement posting threshold at 5%
(FY2024: 5%) of our materiality for the Group financial
statements. We also report to the Audit and Compliance
Committee any other identified misstatements that warrant
reporting on qualitative grounds.
The overall materiality for the Group financial statements of £195m (FY2024: £176m) compares as follows to the main financial statement
caption amounts:
Total Gross investment income
Group profit for the year
Total Group Net Assets
FY2025
FY2024
FY2025
FY2024
FY2025
FY2024
Financial statement Caption
£5,062m
£3,877m
£5,038m
£3,836m
£24,611m
£20,170m
Group Materiality as % of caption
3.9%
4.5%
3.9%
4.6%
0.8%
0.9%
Audited financial statements
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7. The scope of our audit
Group scope
What we mean
How the Group audit team determined the procedures to be performed across the Group.
This year, we applied the revised group auditing standard in our audit of the
consolidated financial statements. The revised standard changes how an
auditor approaches the identification of components, and how the audit
procedures are planned and executed across components.
In particular, the definition of a component has changed, shifting the focus
from how the entity prepares financial information to how we, as the group
auditor, plan to perform audit procedures to address group risks of material
misstatement (“RMMs”). Similarly, the group auditor has an increased role in
designing the audit procedures as well as making decisions on where these
procedures are performed and how these procedures are executed and
supervised. As a result, we assess scoping and coverage in a different way and
comparison to prior period coverage figures are not meaningful. In this report
we provide an indication of scope coverage on the new basis.
We performed risk assessment procedures to determine which of the Group’s
components are likely to include risk of material misstatement to the Group
financial statements and which procedures to perform at these components
to address those risks.
We identified the group as a whole to be a single component, having
considered our evaluation of the Group’s operational structure, the Group’s
legal structure, the existence of common information systems, and our ability
to perform audit procedures centrally. Accordingly, we performed audit
procedures on the single component.
We consider the scope of our audit, as communicated to the Audit and
Compliance Committee, to be an appropriate basis for our audit opinion.
Impact of controls on our Group audit
We did not plan to rely on controls in our audit because we believe that either
it is more effective to perform a predominantly substantive audit approach or
the nature of the financial statement account balance is such that we would
expect to obtain audit evidence primarily through substantive procedures.
We identified the Group’s financial reporting system to be the main IT system
relevant to our audit. We involved IT auditors to assist us in obtaining an
understanding of the processes and controls within this financial reporting
system. The findings identified in this process related to segregation of duties
does not affect our planned audit approach.
Group audit team oversight
What we mean
The extent of the Group audit team’s involvement in component audits.
As outlined above, we identified the Group as a single component. The
Group engagement team performed audit procedures over this component
and, as such, no component auditors were involved.
8. Other information in the annual report
The Directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial
statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form
of assurance conclusion thereon.
All other information
Our responsibility
Our responsibility is to read the other information and, in doing so, consider
whether, based on our financial statements audit work, the information therein
is materially misstated or inconsistent with the financial statements or our
audit knowledge.
Our reporting
Based solely on that work we have not identified material misstatements
or inconsistencies in the other information.
Strategic report and Directors’ report
Our responsibility and reporting
Based solely on our work on the other information described above we report to you as follows:
• we have not identified material misstatements in the strategic report and the Directors’ report;
• in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
Our responsibility
We are required to form an opinion as to whether the part of the Directors’
Remuneration Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Our reporting
In our opinion the part of the Directors’ Remuneration Report to be audited
has been properly prepared in accordance with the Companies Act 2006.
Corporate governance disclosures
Our responsibility
We are required to perform procedures to identify whether there is a material
inconsistency between the financial statements and our audit knowledge,
and:
• the Directors’ statement that they consider that the annual report and
financial statements taken as a whole is fair, balanced and understandable,
and provides the information necessary for shareholders to assess the
Group’s position and performance, business model and strategy;
• the section of the annual report describing the work of the Audit and
Compliance Committee, including the significant issues that the Audit and
Compliance Committee considered in relation to the financial statements,
and how these issues were addressed; and
• the section of the annual report that describes the review of the
effectiveness of the Group’s risk management and internal control systems.
Our reporting
Based on those procedures, we have concluded that each of these disclosures
is materially consistent with the financial statements and our audit knowledge.
We are also required to review the part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions of the UK
Corporate Governance Code specified by the Listing Rules for our review.
Our reporting
We have nothing to report in this respect.
Audited financial statements
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Other matters on which we are required to report by exception
Our responsibility
Under the Companies Act 2006, we are required to report to you if, in our
opinion:
• adequate accounting records have not been kept by the Parent Company,
or returns adequate for our audit have not been received from branches
not visited by us; or
• the Parent Company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not
made; or
• we have not received all the information and explanations we require
for our audit.
Our reporting
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 153, the Directors are responsible for: the preparation of the financial statements including being
satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error; assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report prepared using the single electronic reporting format specified in
the TD ESEF Regulation. This auditor’s report provides no assurance over whether the annual financial report has been prepared in accordance with that format.
10. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body,
for our audit work, for this report, or for the opinions we have formed.
Jonathan Mills (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
Canary Wharf
London
E14 5GL
14 May 2025
Audited financial statements
KPMG LLP’s independent auditor’s report to the members of 3i Group plc continued
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What’s in this section
20 large investments
209
Portfolio valuation – an explanation
211
Information for shareholders
212
Glossary
214
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Portfolio and
other information
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The 20 investments listed below account for 95% of the portfolio at 31 March 2025 (31 March 2024: 95%). One portfolio company has been
excluded due to commercial sensitivity. All investments have been assessed to establish whether they classify as accounting subsidiaries under
IFRS and/or subsidiaries under the UK Companies Act. This assessment forms the basis of our disclosure of accounting subsidiaries in the
financial statements.
The UK Companies Act defines a subsidiary based on voting rights, with a greater than 50% majority of voting rights resulting in an entity
being classified as a subsidiary. IFRS 10 applies a wider test and, if a Group is exposed, or has rights to variable returns from its involvement
with the investee and has the ability to affect these returns through its power over the investee then it has control, and hence the investee is
deemed an accounting subsidiary. Controlled subsidiaries under IFRS are noted below. None of these investments are UK Companies Act
subsidiaries.
In accordance with Part 5 of The Alternative Investment Fund Managers Regulations 2013 (“the Regulations”), 3i Investments plc, as AIFM,
requires all controlled portfolio companies to make available to employees an annual report which meets the disclosure requirements
of the Regulations. These are available either on the portfolio company’s website or through filing with the relevant local authorities.
Action*
Private Equity
1,877
1,108
17,831
14,158 £1,164 million of capital
General merchandise discount retailer
Netherlands
restructuring proceeds,
2011
£433 million cash
Earnings
dividends received and
reinvestment of £768 million
Royal Sanders*
Private Equity
204
165
865
580 Acquisition of Karium in
Private label and contract manufacturing
producer of personal care products
Netherlands
June 2024 and Treaclemoon
2018
in February 2025.
Earnings
£39m further investment
3i Infrastructure plc*
Infrastructure
305
305
856
879
£33 million dividend
Quoted investment company, investing in
infrastructure
UK
received
2007
Quoted
Cirtec Medical*
Private Equity
172
172
614
586
Outsourced medical device
manufacturing
US
2017
Earnings
Scandlines
Scandlines
531
530
529
519 £22 million dividend
Ferry operator between Denmark and
Germany
Denmark/
Germany
received
2018
DCF
AES
Private Equity
30
30
419
403 £4 million dividend received.
Manufacturer of mechanical seals and
provider of reliability services
UK
Acquired Condition
1996
Monitoring Services in
Earnings
August 2024 and PSS
Marine Seal in October 2024
Tato
Private Equity
2
2
382
335 £13 million dividend
Manufacturer and seller of specialty
chemicals
UK
received
1989
Earnings
Evernex*
Private Equity
332
316
350
331 Acquired Ultra Support
Provider of third-party maintenance
services for data centre infrastructure
France
in November 2024
2019
Earnings
Residual
Residual
Business line
cost1
cost1
Valuation2
Valuation2
Geography
March
March
March
March
Investment
First invested in
2025
2024
2025
2024
Relevant transactions
Description of business
Valuation basis
£m
£m
£m
£m
in the year
Portfolio and other information
20 large investments
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SaniSure*
Private Equity
76
76
324
334
Manufacturer, distributor and integrator of
single-use bioprocessing systems and
components
US
2019
Earnings
Smarte Carte*
Infrastructure
196
194
308
306 £6 million interest income
Provider of self-serve vended luggage
carts, electronic lockers and concession
carts
US
received
2017
DCF
European Bakery Group*
Private Equity
63
84
278
267 Return of funding of
Industrial bakery group specialised in
bake-off bread and snack products
Netherlands
£22 million
2021
Earnings
Audley Travel*
Private Equity
338
303
276
192
Provider of experiential tailor-made travel UK
2015
Earnings
ten23 health*
Private Equity
183
129
250
192 £54 million further
Biologics focused CDMO
Switzerland
investment
2021
Other
Luqom*
Private Equity
273
262
218
222
Online lighting specialist retailer
Germany
2017
Earnings
Q Holding*
Private Equity
162
162
172
150
Manufacturer of catheter products serving
the medical device market
US
2014
Earnings
xSuite*
Private Equity
98
93
122
98 £5 million invested to
Accounts payable process automation
specialist focused on the SAP ecosystem
Germany
support the acquisition
2022
of tangro in June 2024
Earnings
BoConcept*
Private Equity
131
121
121
133
Urban living designer
Denmark
2016
Earnings
WaterWipes*
Private Equity
121
–
117
– Acquired in January 2025
Global, premium, natural wet wipe brand
Ireland
2025
Price of recent
investment
MAIT*
Private Equity
53
53
110
100 Acquired CAD ‘N ORG and
IT services provider of PLM & ERP
software applications and IT infrastructure
solutions for larger SME clients in the
DACH region
Germany
ISAP in April 2024, and TFH
2021
Technical Services in
Earnings
November 2024
Dynatect*
Private Equity
65
65
108
130
Manufacturer of engineered, mission
critical protective equipment
US
2014
Earnings
5,212
4,170
24,250
19,915
Residual
Residual
Business line
cost1
cost1
Valuation2
Valuation2
Geography
March
March
March
March
Investment
First invested in
2025
2024
2025
2024
Relevant transactions
Description of business
Valuation basis
£m
£m
£m
£m
in the year
*
Controlled in accordance with IFRS.
1
Residual cost includes cash investment and interest, net of cost disposed.
2
Valuation represents our unrealised value at the relevant date and does not include any realised proceeds and dividends received under our ownership.
Portfolio and other information
20 large investments continued
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Policy
The valuation policy is the responsibility of the Board, with additional
oversight and annual review from the Valuations Committee. The
policy is reviewed at least annually, with the last update in January
2025. Our policy is to value 3i’s investment portfolio at fair value
and we achieve this by valuing investments on an appropriate basis,
applying a consistent approach across the portfolio. The policy
ensures that the portfolio valuation is compliant with the fair value
guidelines under IFRS and, in so doing, is also compliant with
the IPEV guidelines. The policy covers the Group’s Private Equity,
Infrastructure and Scandlines investment valuations. Valuations
of the investment portfolio of the Group and its subsidiaries
are performed at each quarter end.
Fair value is the underlying principle and is defined as “the price
that would be received to sell an asset in an orderly transaction
between market participants at the measurement date” (IPEV
guidelines, December 2022). Fair value is an estimate and,
as such, determining fair value requires the use of judgement.
The quoted assets in our portfolio are valued at their closing
bid price at the balance sheet date. The majority of the portfolio,
however, is represented by unquoted investments.
Private Equity unquoted valuation
To arrive at the fair value of the Group’s unquoted Private Equity
investments, we first estimate the entire value of the company we
have invested in – the enterprise value. We then apportion that
enterprise value between 3i, other shareholders and lenders.
Determining enterprise value
The enterprise value is determined using one of a selection of
methodologies depending on the nature, facts and circumstances
of the investment.
Where possible, we use methodologies which draw heavily on
observable market prices, whether listed equity markets or
reported merger and acquisition transactions, and trading updates
from our portfolio.
As unquoted investments are not traded on an active market, the
Group adjusts the estimated enterprise value by a liquidity discount.
The liquidity discount is applied to the total enterprise value and we
apply a higher discount rate for investments where there are material
restrictions on our ability to sell at a time of our choosing.
Note 13 Fair values of assets and liabilities outlines in more detail
the range of valuation methodologies available to us, as well as the
inputs and adjustments necessary for each. The fair value of each
investment has been assessed on a case-by-case basis considering
historical, current and forward looking data. Where forward-looking
data forms the base of a valuation, the accuracy, reliability and
maintainability of these forecasts has been considered.
Apportioning the enterprise value between 3i,
other shareholders and lenders
Once we have estimated the enterprise value, the following steps
are taken:
(1) We subtract the value of any claims, net of free cash balances
that are more senior to the most senior of our investments.
(2) The resulting attributable enterprise value is apportioned to
the Group’s investment, and equal ranking investments by other
parties, according to contractual terms and conditions, to arrive
at a fair value of the entirety of the investment. The value is then
distributed amongst the different loan, equity and other financial
instruments accordingly.
(3) If the value attributed to a specific shareholder loan investment
in a company is less than its carrying value, a shortfall is implied,
which is recognised in our valuation. In exceptional cases, we may
judge that the shortfall is temporary; to recognise the shortfall
in such a scenario would lead to unrepresentative volatility
and hence we may choose not to recognise the shortfall.
Other factors
In applying this framework, there are additional considerations
that are factored into the valuation of some assets.
Impacts from structuring
Structural rights are instruments convertible into equity or cash
at specific points in time or linked to specific events. For example,
where a majority shareholder chooses to sell, and we have a minority
interest, we may have the right to a minimum return on our
investment.
Debt instruments, in particular, may have structural rights. In the
valuation, it is assumed third parties, such as lenders or holders of
convertible instruments, fully exercise any structural rights they might
have if they are “in the money”, and that the value to the Group
may therefore be reduced by such rights held by third parties.
The Group’s own structural rights are valued on the basis they
are exercisable on the reporting date.
Infrastructure unquoted valuation
The primary valuation methodology used for unquoted Infrastructure
investments is the DCF method. Fair value is estimated by deriving
the present value of the investment using reasonable assumptions
of expected future cash flows and the terminal value and date, and
the appropriate risk-adjusted discount rate that quantifies the risk
inherent to the investment. The discount rate is estimated with
reference to the market risk-free rate, a risk-adjusted premium
and information specific to the investment or market sector.
Scandlines unquoted valuation
Scandlines is valued on a DCF basis. This is consistent with
the Infrastructure methodology.
Portfolio and other information
Portfolio valuation – an explanation
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Financial calendar
Ex-dividend date
Thursday 19 June 2025
Record date
Friday 20 June 2025
Annual General Meeting
Thursday 26 June 2025
Second FY2025 dividend to be paid
Friday 25 July 2025
Half-year results (available online only)
November 2025
First FY2026 dividend expected to be paid
January 2026
Information on ordinary shares
Shareholder profile: Location of investors at 31 March 2025
UK
45%
North America
39%
Continental Europe
13%
Other international
3%
Share price
Share price at 31 March 2025
3,616
High during the year 18 February 2025
4,134
Low during the year 9 April 2024
2,777
Dividends paid in the year to 31 March 2025
Second FY2024 dividend, paid 26 July 2024
34.5p
First FY2025 dividend, paid 10 January 2025
30.5p
Balance analysis summary
Number of holdings
Balance as at 31 March 2025
Range
Individuals Corporate bodies Number of shares
%
shares
Total
holdings
Individual
shares
Corporate
shares
1–1,000
8,617
189
3,672,508
0.38
8,806
3,598,823
73,685
1,001–10,000
3,571
457
9,703,307
1.00
4,028
7,723,137
1,980,170
10,001–100,000
84
547
22,881,160
2.35
631
1,924,226
20,956,934
100,001–1,000,000
4
413 146,326,100
15.03
417
536,418 145,789,682
1,000,001–10,000,000
–
119 331,873,671
34.09
119
– 331,873,671
10,000,001–highest
–
14 458,942,232
47.15
14
– 458,942,232
Total
12,276
1,739 973,398,978
100.00
14,015 13,782,604 959,616,374
The table above provides details of the number of shareholdings within each of the bands stated in the register of members at 31 March 2025.
It should be noted that because many individuals and institutions hold shares through nominees (such as brokers, investment managers
or investment platforms) the actual number of beneficial owners of shares will be greater than the numbers of holdings in the above table.
Portfolio and other information
Information for shareholders
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The Common Reporting Standard
Tax legislation under the Organisation for Economic Co-operation
and Development (“OECD”) Common Reporting Standard for
Automatic Exchange of Financial Account Information requires
investment trust companies to provide information about certain
shareholders in the company to HMRC. As an investment trust
company, 3i Group plc is required to provide information annually
to HMRC on certain certificated shareholders and corporate entities.
This information includes country of tax residency as well as details
of shares held and dividends received. HMRC may in turn exchange
such information with the tax authorities of another country or
countries in which the shareholder may be tax resident, where those
countries (or tax authorities in those countries) have entered into
agreements with the UK to exchange financial account information.
Certain shareholders have been and will in future be sent a self-
certification form for the purposes of collecting required information.
Boiler room and other scams
Shareholders should be wary of any unsolicited investment advice,
offers to buy shares at a discounted price or offers to buy 3i
shareholdings. These fraudsters use persuasive and high-pressure
tactics to lure shareholders into scams. We have become aware
of what appears to be an increase in calls to current and former
3i shareholders.
The Financial Conduct Authority (“FCA”) has found that victims
of share fraud are often seasoned investors with victims losing
an average of £20,000.
Please keep in mind that firms authorised by the FCA are unlikely
to contact you unexpectedly with an offer to buy or sell shares.
You should consider getting independent financial or professional
advice before you hand over any money or even share any
information with them.
If you receive any unsolicited approaches or investment advice,
you should proceed with caution. Steps that you might wish to take
could include the following:
• always ensure the firm is on the FCA Register and is allowed to give
financial advice before handing over your money. You can check
at www.fca.org.uk/register;
• double-check the caller is from the firm they say they are – ask for
their name and telephone number and say you will call them back.
Check their identity by calling the firm using the contact number
listed on the FCA Register. This is important as there have been
instances where an authorised firm’s website has been cloned but
with a few subtle changes, such as a different phone number or
false email address;
• check the FCA’s list of known unauthorised overseas firms.
However, these firms change their name regularly, so even if a firm
is not listed it does not mean they are legitimate. Always check
that they are listed on the FCA Register; and
• if you have any doubts, call the FCA Consumer Helpline
on 0800 111 6768. If you deal with an unauthorised firm,
you will not be eligible to receive payment under the
Financial Services Compensation Scheme.
Annual reports and Half-yearly reports online
If you would prefer to receive shareholder communications
electronically in future, including annual reports and notices
of meetings, please visit our Registrars’ website at
www.shareview.co.uk/clients/3isignup and follow the instructions
there to register.
The 2025 Half-yearly report will be available online only. Please
register to ensure you are notified when it becomes available
at www.3i.com/investor-relations/financial-news.
More general information on electronic communications
is available on our website at www.3i.com/investor-relations/
shareholder-centre/.
Investor relations enquiries
For all investor relations enquiries about 3i Group plc, including
requests for further copies of the Annual report and accounts,
please contact:
Investor relations
3i Group plc
1 Knightsbridge
London, SW1X 7LX
Telephone +44 (0)20 7975 3131
email IRTeam@3i.com
or visit the Investor relations section of our website at www.3i.com/
investor-relations, for full up-to-date investor relations information,
including the latest share price, results presentations and financial
news.
Registrars
For shareholder administration enquiries, including changes
of address please contact:
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex, BN99 6DA
Telephone 0371 384 2031
Lines are open from 8.30am to 17.30pm (UK time), Monday to Friday
(excluding public holidays in England and Wales).
Portfolio and other information
Information for shareholders continued
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Alternative Investment Funds (“AIFs”) At 31 March 2025,
3i Investments plc as AIFM, managed seven AIFs. These were
3i Group plc, 3i Growth Capital B LP, 3i Growth Capital C LP,
3i Europartners Va LP, 3i Europartners Vb LP, 3i Managed
Infrastructure Acquisitions LP and 3i Infrastructure plc.
Alternative Investment Fund Manager (“AIFM”) is the regulated
manager of AIFs. Within 3i, these are 3i Investments plc and
3i Investments (Luxembourg) SA.
Approved Investment Trust Company This is a particular UK tax
status maintained by 3i Group plc, the parent company of 3i Group.
An approved Investment Trust company is a UK company which
meets certain conditions set out in the UK tax rules which include
a requirement for the company to undertake portfolio investment
activity that aims to spread investment risk and for the company’s
shares to be listed on an approved exchange. The “approved” status
for an investment trust must be agreed by the UK tax authorities
and its benefit is that certain profits of the company, principally
its capital profits, are not taxable in the UK.
Assets under management (“AUM”) A measure of the total
assets that 3i has to invest or manages on behalf of shareholders
and third-party investors for which it receives a fee. AUM is measured
at fair value. In the absence of a third-party fund in Private Equity,
it is not a measure of fee generating capability.
B2B Business-to-business.
Board The Board of Directors of the Company.
CAGR is the compound annual growth rate.
Capital redemption reserve is established in respect
of the redemption of the Company’s ordinary shares.
Capital reserve recognises all profits and losses that are capital
in nature or have been allocated to capital. Following changes
to the Companies Act, the Company amended its Articles
of Association at the 2012 Annual General Meeting to allow
these profits to be distributable by way of a dividend.
Carried interest payable is accrued on the realised and
unrealised profits generated taking relevant performance hurdles
into consideration, assuming all investments were realised at the
prevailing book value. Carried interest is only actually paid when
the relevant performance hurdles are met and the accrual is
discounted to reflect expected payment periods.
Carried interest receivable The Group earns a share of profits
from funds which it manages on behalf of third parties. These profits
are earned when the funds meet certain performance conditions and
are paid by the fund once these conditions have been met on a cash
basis. The carried interest receivable may be subject to clawback
provisions if the performance of the fund deteriorates following
carried interest being paid.
CDMO stands for a contract development and manufacturing
organisation.
Company 3i Group plc.
DACH The region covering Austria, Germany and Switzerland.
DCF Discounted cash flow.
Discounting The reduction in present value at a given date
of a future cash transaction at an assumed rate, using a discount
factor reflecting the time value of money.
EBITDA is defined as earnings before interest, taxation, depreciation
and amortisation and is used as the typical measure of portfolio
company performance.
EBITDA multiple Calculated as the enterprise value over EBITDA,
it is used to determine the value of a company.
Executive Committee The Executive Committee is responsible
for the day-to-day running of the Group (see page 104).
Fair value movements on investment entity subsidiaries
The movement in the carrying value of Group subsidiaries, classified
as investment entities under IFRS 10, between the start and end
of the accounting period converted into sterling using the exchange
rates at the date of the movement.
Portfolio and other information
Glossary
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Fair value through profit or loss (“FVTPL”) is an IFRS measurement
basis permitted for assets and liabilities which meet certain criteria.
Gains and losses on assets and liabilities measured as FVTPL are
recognised directly in the Statement of comprehensive income.
Fee income (or Fees receivable) is earned for providing services
to 3i’s portfolio companies and predominantly falls into one of two
categories. Negotiation and other transaction fees are earned for
providing transaction related services. Monitoring and other ongoing
service fees are earned for providing a range of services over
a period of time.
Fees receivable from external funds are earned for providing
management and advisory services to a variety of fund partnerships
and other entities. Fees are typically calculated as a percentage
of the cost or value of the assets managed during the year and are
paid quarterly, based on the assets under management to date.
Foreign exchange on investments arises on investments made
in currencies that are different from the functional currency of the
Company. Investments are translated at the exchange rate ruling
at the date of the transaction. At each subsequent reporting date
investments are translated to sterling at the exchange rate ruling
at that date.
Gross investment return (“GIR”) includes profit and loss on
realisations, increases and decreases in the value of the investments
we hold at the end of a period, any income received from the
investments such as interest, dividends and fee income, movements
in the fair value of derivatives and foreign exchange movements. GIR
is measured as a percentage of the opening portfolio value.
Interest income from investment portfolio is recognised
as it accrues. When the fair value of an investment is assessed to be
below the principal value of a loan, the Group recognises a provision
against any interest accrued from the date of the assessment going
forward until the investment is assessed to have recovered in value.
International Financial Reporting Standards (“IFRS”) are
accounting standards issued by the International Accounting
Standards Board (“IASB”). The Group’s consolidated financial
statements are prepared in accordance with UK adopted
international accounting standards.
Investment basis Accounts prepared assuming that IFRS 10 had not
been introduced. Under this basis, we fair value portfolio companies
at the level we believe provides useful comprehensive financial
information. The commentary in the Strategic report refers to this
basis as we believe it provides a more understandable view of our
performance.
IRR Internal Rate of Return.
Key Performance Indicator (“KPI”) is a measure by reference
to which the development, performance or position of the Group
can be measured effectively.
Like-for-like compare financial results in one period with those
for the previous period.
Liquidity includes cash and cash equivalents (as per the Investment
basis Consolidated cash flow statement) and undrawn RCF.
Money multiple is calculated as the cumulative distributions plus
any residual value divided by paid-in capital.
Net asset value (“NAV”) is a measure of the fair value of our
proprietary investments and the net costs of operating the business.
Operating cash profit is the difference between our cash income
(consisting of portfolio interest received, portfolio dividends received,
portfolio fees received and fees received from external funds as per
the Investment basis Consolidated cash flow statement) and our
operating expenses and lease payments (as per the Investment
basis Consolidated cash flow statement).
Operating profit includes gross investment return, management
fee income generated from managing external funds, the costs
of running our business, net interest payable, exchange movements,
other income, carried interest and tax.
Organic growth is the growth a company achieves by increasing
output and enhancing sales internally.
Portfolio and other information
Glossary continued
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Performance fee receivable The Group earns a performance fee
from the investment management services it provides to 3i
Infrastructure plc (“3iN”) when 3iN’s total return for the year exceeds
a specified threshold. This fee is calculated on an annual basis
and paid in cash early in the next financial year.
Portfolio effect is the level of risk based on the diversity
of the investment portfolio.
Portfolio income is that which is directly related to the return from
individual investments. It is comprised of dividend income, income
from loans and receivables and fee income.
Proprietary Capital is shareholders’ capital which is available
to invest to generate profits.
Public Private Partnership (“PPP”) is a government service
or private business venture which is funded and operated through
a partnership of government and one or more private sector
companies.
Realised profits or losses over value on the disposal of
investments is the difference between the fair value of the
consideration received, less any directly attributable costs, on the sale
of equity and the repayment of loans and receivables and its carrying
value at the start of the accounting period, converted into sterling
using the exchange rates at the date of disposal.
Revenue reserve recognises all profits and losses that are revenue
in nature or have been allocated to revenue.
Revolving Credit Facility (“RCF”) The Group has access to a credit
line which allows us to access funds when required to improve our
liquidity.
Run-rate is a financial performance metric, which captures the future
predicted growth of a portfolio company’s financial performance.
Segmental reporting Operating segments are reported in a manner
consistent with the internal reporting provided to the Chief Executive
who is considered to be the Group’s chief operating decision maker.
All transactions between business segments are conducted on an
arm’s length basis, with intrasegment revenue and costs being
eliminated on consolidation. Income and expenses directly
associated with each segment are included in determining business
segment performance.
Share-based payment reserve is a reserve to recognise those
amounts in retained earnings in respect of share-based payments.
SORP means the Statement of Recommended Practice: Financial
Statements of Investment Trust Companies and Venture Capital
Trusts.
Syndication is the sale of part of our investment in a portfolio
company to a third party, usually within 12 months of our initial
investment and for the purposes of facilitating investment by a co-
investor or portfolio company management in line with our original
investment plan. A syndication is treated as a negative investment
rather than a realisation.
Total return comprises operating profit less tax charge less
movement in actuarial valuation of the historic defined benefit
pension scheme.
Total Shareholder Return (“TSR”) is the measure of the overall
return to shareholders and includes the movement in the share price
and any dividends paid, assuming that all dividends are reinvested
on their ex-dividend date.
Translation reserve comprises all exchange differences arising from
the translation of the financial statements of international operations.
Unrealised profits or losses on the revaluation of investments is
the movement in the carrying value of investments between the start
and end of the accounting period converted into sterling using the
exchange rates at the date of the movement.
Portfolio and other information
Glossary continued
3i Group plc | Annual report and accounts 2025
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3i Group plc
Registered office: 1 Knightsbridge,
London, SW1X 7LX, UK
Registered in England No. 1142830
An investment company as defined by
section 833 of the Companies Act 2006
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3i Group plc
1 Knightsbridge, London, SW1X 7LX, UK
Telephone +44 (0)20 7975 3131
THR27389
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