LONDON, May 18 (Reuters) - Private equity fund 3i on Thursday reported a 36 percent total return for the year to March 31 and recommended a 18.5 pence per share final dividend.
The fund, which makes private equity and infrastructure investments and recently sold its debt management arm, said total return rose to 1,592 million pounds ($2.06 billion) from 824 million a year earlier.
It proposed a final dividend of 18.5 pence per share, up from 16p a year earlier, which would raise the total dividend for the 2017 financial year to 26.5p from 22p per share, subject to shareholder approval.
The company generated 982 million pounds of proceeds through disposals and refinancings including the sale of baby feeding company Mayborn and promotional products supplier Polyconcept, at an average money multiple of 3.7x.
But the company, which invests in mid-market companies operating across Europe, Asia and the Americas, had written down its investment in lingerie chain Agent Provocateur to nil after accounting irregularities had concealed its true financial position. The total writedown for the year was 49 million pounds.
The private equity industry has been flooded with cheap capital looking for higher returns than the public markets which has pushed up valuations raising concerns that private equity returns will be depressed.
"There's a lot more money around there looking for deals than there are deals," Simon Borrows, chief executive of 3i said on a call with reporters, adding that 3i tries to go to acquisition targets directly instead of taking part in auctions.
Borrows said 3i was investing more of its money in continental northern Europe and the United States.
"Our portfolio in the UK is quite small... we see the UK market as being completely over-served and competitive."
Investing primarily in utilities, transportation and social infrastructure in Britain and Europe, 3i's infrastructure assets under management increased to 2.9 billion pounds from 2.3 billion pounds largely due to fundraising and strong portfolio performance.
3i's shares were down 0.42 percent at 837 pence at 0708 GMT.
$1 = 0.7720 pounds Reporting by Dasha Afanasieva; editing by Jason Neely