Communicating clearly

Despite the allure of so-called ?permanent capital,? very few private equity firms around the world have taken the leap of listing on public markets. But one of Europe's largest private equity investors is indeed a public entity. According to the Switzerland-based LPX index, the listed private equity firm with the largest market cap – over €7.4 billion ($8.9 billion) – is none other than London-headquartered private equity firm 3i.

Established immediately following the Second World War and given its current name of ?3i? upon the 1983 merger of its predecessors – the Finance Corporation Industry (FCI) and the Industrial and Commercial Finance Corporation (ICFC) – the firm has been listed on the London Stock Exchange and has traded as a public company since 1994.

Europe-centric for much of its history, 3i has taken significant strides toward increasing its geographic spread in recent years, building up its presence not only in Continental Europe but also in the United States and Asia. A key catalyst for this change was the appointment of Philip Yea, previously a managing director at Bahrain-based private equity firm Investcorp, as 3i's chief executive in mid 2004.

Given the size and spread of 3i's business, and its FTSE 100 status, the responsibilities of the firm's communications group are complex. According to Patrick Dunne, who joined 3i in 1985 and became director of the firm's Group Communications in 2003, the firm's investor relations and communications functions are ?fundamentally handled in-house? by a team of about two dozen professionals.

Double IR duties
To handle investor relations with third party LPs, 3i has a team of 11 professionals – including accounting and other support staff – that comprise the Funds Team. Erin Harrell, who previously handled investor relations at European private equity firm Industri Kapital, heads up the group as director. The Funds Team is a dedicated team responsible for marketing and communicating with investors on the performance of 3i's mid market buyout funds that are backed by third party investors. 3i' s growth capital and venture capital businesses are handled separately, as 3i is the sole LP for these funds.

Meanwhile, the rest of 3i's external and internal communications needs is taken care of by Dunne's team. Dunne says the 13-person communications group is responsible for multiple ?strands? of communication, a key one being investor relations with public shareholders.

?The investor relations at 3i are different from that of most private equity funds because we have over 30,000 shareholders spread throughout the world,? says Dunne. ?Because we are a publicly traded company, we have certain formal requirements in terms of communications, transparency, reporting and regulations that we have to meet. These include shareholder meetings, publications including annual reports, events, an investor relations website, and holding annual general meetings.?

While the teams led by Dunne and Harrell operate independently of one another in some aspects, their activities frequently intersect. For instance, Dunne's group might be sending out communications to stock market analysts or staff, while Harrell's group might be distributing reports to fund investors. ?What we have to be absolutely clear about is the consistency of the information. There are processes in place to ensure that we're joined up,? says Dunne.

3i