The Lemon Fool

I have been thinking about these for a while. LSE:iii 3i Investors in Industry pays an increasing dividend and has done well capital wise. Any thoughts?

john

Not very high yield though are they at 3%ish I do hold them and have had them several years, Been a good performer for me 3 fold capital increase and a similar dividend increase too.

johnstevens77 wrote:I have been thinking about these for a while. LSE:iii 3i Investors in Industry pays an increasing dividend and has done well capital wise. Any thoughts?

john

Moderator Message:
Moved to the correct board. -- MDW1954

Thanks for that but this is the board I thought that I had posted on. Getting old.

john

kempiejon wrote:Not very high yield though are they at 3%ish I do hold them and have had them several years, Been a good performer for me 3 fold capital increase and a similar dividend increase too.

The yield is fine. Our largest holding is Halma, split over 3 accounts and yielding .5 - .9%. Bought in 2002, they are 25-30 times purchase price. Every so often I sell some to reinvest in our HYP and 3i seems to fit the bill even though they are at a massive premium.

john

It's incredibly volatile, over the long term. I happened to look at it this morning (because it comes first in an alphabetical list of ITs ... and then I noticed the 5 year performance). Although the NAV (which only seems to get updated once a quarter - too difficult to value private companies constantly, I suppose) shows regular, non-volatile growth, the share price and discount/premium staggers around drunkenly. It's certainly done well, overall, in the past decade or so; but if you look back at the record from the 1990s onwards, you can also find long stretches in which you'd have lost money on it, even over 15 years.

EthicsGradient wrote:It's incredibly volatile, over the long term. I happened to look at it this morning (because it comes first in an alphabetical list of ITs ... and then I noticed the 5 year performance). Although the NAV (which only seems to get updated once a quarter - too difficult to value private companies constantly, I suppose) shows regular, non-volatile growth, the share price and discount/premium staggers around drunkenly. It's certainly done well, overall, in the past decade or so; but if you look back at the record from the 1990s onwards, you can also find long stretches in which you'd have lost money on it, even over 15 years.

Yes, 5 years, 2012-2016 the annual dividend was static at 8.1p, since then it has increased to 53p in 2023. Was there a change in strategy or perhaps it's investments have matured and are paying dividends? Anyway, I have no exposure to private equity and the present dividend is a lot higher than Halma so I may sell a tranche and dip a toe in the water, leaving the rest of Halma to perform as usual. My main concern is the high premium but that gives the trust the possibility to issue new shares at a good price if that strategy was adopted.

john

PS, I also hold 3i Infrastructure, I like the overseas exposure and growing dividends.

Interesting. I was looking at this the other day. It's had a good run, probably correlated with the AI frenzy. I think it is looking a bit toppy for me but we will see how it manages a second run at £20.00. However, I am uncomfortable with its rather opaque job description if one takes a more prudent 'nuts and bolts' view on where we are in the current economic cycle which the talking heads are doing their best to dismiss or perhaps disguise.

Jam2Day wrote:Interesting. I was looking at this the other day. It's had a good run, probably correlated with the AI frenzy.

Errr...which of its holdings do you think have been boosted 'cos of the "AI frenzy"?

According to 3i's 2023 Annual Report (pp 227-228), of the £17 billion valuation of their top 20 holdings (94% of their whole portfolio) a full £11 billion is Action, a European non-food "small prices, big smiles" discount retailer.

The next largest holding is 3i Infrastructure at a mere £841 million.

Yes, they've had a good run, indeed, a ten-bagger for those that got in at the right time, but anyone investing has to know that they're essentially (at least 60%) buying a European Wilko by the looks of it...

mc2fool wrote:

Jam2Day wrote:Interesting. I was looking at this the other day. It's had a good run, probably correlated with the AI frenzy.

Errr...which of its holdings do you think have been boosted 'cos of the "AI frenzy"?

According to 3i's 2023 Annual Report (pp 227-228), of the £17 billion valuation of their top 20 holdings (94% of their whole portfolio) a full £11 billion is Action, a European non-food "small prices, big smiles" discount retailer.

The next largest holding is 3i Infrastructure at a mere £841 million.

Yes, they've had a good run, indeed, a ten-bagger for those that got in at the right time, but anyone investing has to know that they're essentially (at least 60%) buying a European Wilko by the looks of it...

Thanks for the links. Action looks like an Aldi 'Me Too'. Got nothing against venture capitalists per se but their formula is fairly standard practice. Develop/support a business (so far so good) and then list it (sell it) on the main market stuffed with debt. The AA was a classic blueprint that ended up being delisted again on a rinse and repeat routine, not helped by inept management.

Jam2Day wrote:

mc2fool wrote:Errr...which of its holdings do you think have been boosted 'cos of the "AI frenzy"?

According to 3i's 2023 Annual Report (pp 227-228), of the £17 billion valuation of their top 20 holdings (94% of their whole portfolio) a full £11 billion is Action, a European non-food "small prices, big smiles" discount retailer.

The next largest holding is 3i Infrastructure at a mere £841 million.

Yes, they've had a good run, indeed, a ten-bagger for those that got in at the right time, but anyone investing has to know that they're essentially (at least 60%) buying a European Wilko by the looks of it...

Thanks for the links. Action looks like an Aldi 'Me Too'. Got nothing against venture capitalists per se but their formula is fairly standard practice. Develop/support a business (so far so good) and then list it (sell it) on the main market stuffed with debt. The AA was a classic blueprint that ended up being delisted again on a rinse and repeat routine, not helped by inept management.

Action is a non-food discount retailer, hence my European Wilko comment.

mc2fool wrote:Action is a non-food discount retailer, hence my European Wilko comment.

Ah. Gotcha. They must surely have their eyes on the UK at some point. Thanks.