3i, formerly one of the leading Venture Capital Groups in Europe, has entered exclusive talks to sell a portfolio of 36 European venture capital investments to a consortium led by Coller Capital and HarbourVest Partners for about £100m.The talks follow 3iâ??s decision last year to abandon early stage investment in start-up companies, its worst-performing activity since the technology bubble burst, to focus on buy-outs, growth capital and infrastructure.
Coller of the UK and HarbourVest of the US are two of the biggest investors in the secondary private equity market, where second-hand interests are bought and sold.
The other member of their consortium is DFJ Esprit, the UK venture capitalist backed by Draper Fisher Jurvetson, one of Silicon Valleyâ??s best-known investors. Coller and HarbourVest would provide the money, while DFJ would manage the holdings.
The consortiumâ??s offer is believed to value the 36 venture capital investments at slightly more than £100m. This is a significant discount to their carrying value of about £250m in 3iâ??s accounts.
The European healthcare and technology portfolio being sold by 3i includes stakes in Icera, a maker of chips for mobile phones; The Cloud, an operator of wireless networks; and Small Bone Innovations, a French orthopaedic technology company.
3i has spent most of this year trying to repair its balance sheet. Michael Queen, who took over as chief executive in January, spearheaded a £732m share issue aimed at reducing its debt.
In the year to March 2009, the value of 3i's remaining 123 venture capital assets had fallen to £314m, less than 5 per cent of its total portfolio.
New venture capital investment fell to £53m last year when 3i reported a loss of £416m on its venture capital business.
