3i Group's NAV Per Share Growth and Strategic Value Creation: A Deep Dive into Active Asset Management and Compounding Returns

The 3i Group has long been celebrated for its disciplined approach to private equity and infrastructure investing, but its recent performance underscores a compelling narrative of sustainable growth and compounding value. As of 30 June 2025, the company's diluted net asset value (NAV) per share surged to 2,711 pence, a 7% increase from March 2025 and a 30% rise from March 2024. This trajectory, driven by high-conviction investments in Action, MPM, and 3i Infrastructure, highlights the power of active asset management and long-term capital deployment. For investors, the question is not just about the numbers but whether 3i's strategies are sustainable and scalable in an increasingly volatile market.

The Compounding Power of High-Conviction Investments

3i's private equity portfolio, anchored by Action, has been a cornerstone of its NAV growth. Action, a retail chain with 3,000 stores, delivered €7.34 billion in net sales and €980 million in operating EBITDA in the first half of FY2026, achieving a 6.8% like-for-like (LFL) sales growth. Its valuation now stands at £19.27 billion for 3i's 57.9% stake, up from £17.83 billion in March 2025. This growth is not merely a function of scale but of strategic execution: Action's net debt to EBITDA ratio improved to 2.5x from 3.2x post-refinancing, reflecting disciplined capital management.

MPM, another standout, exemplifies 3i's ability to extract value through active management. Sold in June 2025 for a 3.2x money multiple and 29% IRR, the exit marked a 17% uplift from its March 2025 valuation. Since 2020, MPM's sales and EBITDA more than doubled, driven by omnichannel expansion and international diversification. These outcomes validate 3i's thesis: that long-term partnerships with portfolio companies, combined with operational expertise, unlock outsized returns.

Strategic Value Creation in 3i Infrastructure

While private equity often grabs the spotlight, 3i Infrastructure (3iN) has quietly become a linchpin of the Group's value proposition. The infrastructure portfolio's 8% share price increase in Q1 2025 (closing at 342 pence) valued 3i's 29% stake at £921 million, up from £856 million in March 2025. This growth stems from both operational performance and strategic realisations.

Key contributors include Scandlines, which generated £6 million in dividend income, and Tampnet, which capitalized on demand for subsea infrastructure tied to carbon capture and renewable energy. The sale of Valorem in January 2025 for €310 million (a 3.6x money multiple and 21% IRR) further illustrates 3iN's active management prowess. These initiatives are complemented by ESG-driven strategies, such as Future Biogas's 15-year green gas offtake agreement with AstraZeneca, aligning financial returns with sustainability goals.

Assessing the Sustainability of Active Asset Management

3i's success hinges on its ability to sustain active management across its portfolios. The Group's £1.2 billion refinanced revolving credit facility (RCF) in July 2025, with improved pricing and extended maturity until 2032, underscores its financial flexibility. At 30 June 2025, 3i held £428 million in gross cash and maintained a 3% gearing ratio, providing ample capacity for new investments or portfolio support.

However, sustainability also depends on external factors. For instance, foreign exchange volatility—such as the £392 million translation gain from pound movements—can skew short-term NAV growth. Yet 3i's diversified portfolio, with assets across 15 countries and sectors, mitigates such risks. The Group's focus on compounding value through reinvestment of realisations (e.g., using MPM proceeds for new opportunities) further strengthens its resilience.

Investment Implications and the Road Ahead

For investors, 3i's current valuation metrics warrant scrutiny. As of 24 July 2025, its share price of 4,338 pence trades at a 69.98% premium to NAV, reflecting strong confidence in its future performance. However, this premium also implies higher expectations. The Group's dividend yield—42.5 pence per share in Q1 2026—remains attractive, supported by a 2.5x coverage ratio of net income.

Looking ahead, 3i's pipeline of potential realisations (e.g., TCR's North American expansion) and its commitment to ESG integration (e.g., SBTi-validated targets for Joulz and Ionisos) position it to navigate macroeconomic headwinds. The key will be maintaining its active management edge while scaling efficiently.

Conclusion: A Model for Compounding Value

3i Group's journey from a 1,745 pence NAV in March 2023 to 2,711 pence in June 2025 is a testament to the power of high-conviction, long-term investing. By combining operational excellence in Action, strategic exits like MPM, and a robust infrastructure portfolio, the Group has created a compounding engine that transcends market cycles. For investors seeking sustainable growth in an uncertain world, 3i's disciplined approach offers a compelling blueprint—and a reminder that patience, paired with active management, can yield extraordinary results.