Despite a decline in revenue invested in the computing industry this year, 3i Plc believes that it will see increased demand for growth capital over the coming one. It emphasised that it was the level of demand for investment from the industry that had declined rather than any actual intention on its part to lower it. The London SE1-based venture capital company noted that the sector had been badly affected by recession and the trend among customers to reappraise their information technology strategies. Nevertheless, a general reduction in sales and profits was said to have brought about a change in orientation. The focus is moving from an emphasis on technology towards customer interests and market forces. This has resulted in a re-shaping of the industry through consolidation and disposal of non-core activities, providing management buy-out and buy-in opportunities. Buy-ins were first pioneered by 3i and are its fastest growing area of investment. Differentiation in a complex market is also seen as a key factor in future investment. Many companies are seen to be carving out niche markets for themselves in such growth areas as networking and facilities management. In the year to March 31, ?13m was invested in 18 companies, marking a decrease of ?9m on the previous year. Despite the frequently postponed flotation of the company, 3i insists that it will maintain its policy of investment for long-term growth. An average investment level was quoted as being approximately ?250,000, but it never took more than 50% of the equity of a company. It says it prefers its status as a passive investor, with an average shareholding in its targets of 25% to 30%.
