It takes time, money and commitment to take on the dogs of the investment company sector. Colin Kingsnorth has all three, which is perhaps why he’s picked fights with its two biggest canines. On the one hand, here is 3i, a perfectly decent business wrecked by the o’ervaulting ambition of the previous management under its chairman Sarah Hogg. She is old enough to remember it as the Industrial and Commercial Finance Corporation, a decently dull business providing long-term equity finance to small businesses – rather what’s needed today, in fact.
Its management had craved the excitement of big-ticket private equity, and got it, though not in a way the shareholders would appreciate. 3i piled into dot-com just in time for the millennium bust, and Baroness Hogg’s reign that followed culminated in the unedifying spectacle of an investment company forced into an emergency rights issue at a massive discount to net asset value (NAV). Even that did not mark any sort of turning point, and the discount widened to 40 percent. Last week the chief executive resigned. Read more