Borrows set to reign at 3i after Queen leaves
TOP City rainmaker Simon Borrows is set to be named this week as chief executive of 3i, Britain’s oldest private equity firm.
Borrows, who joined as chief investment officer last summer, will take over from Michael Queen, who in March announced his intention to step down.
The promotion of Borrows will surprise few in the City. His initial appointment in July was seen as a coup for 3i, which has been criticised for not adopting a sufficiently aggressive strategy.
Borrows, a law graduate who has worked at a series of City banks, was chosen after the board considered a shortlist of four, including some external candidates.
He has a longstanding knowledge of 3i, having advised on the firm’s initial public offering in 1994.
Queen handed in his notice after resisting pressure for a share buyback. He was criticised for the poor performance of the group, which posted a total negative return of £523m for the six months to 30 September 2011.
Analysts said “fresh blood” could be good for the group, which owns stakes in architecture firm Foster + Partners and lingerie chain Agent Provocateur, but acknowledged that Queen had used his three years at the top to tackle 3i’s high debt burden, shake up the structuring of deal terms and push the move to a broader asset management model.
Shares in 3i have lost around a third of their value over the past year and closed at 189.9p on Friday, giving it a market value of £1.84bn.
The decline has ignited talk of a takeover approach from either another private equity firm or a large pension or sovereign wealth fund or even an attempt at a management buyout.
A bid for 3i from a large pension fund could give a fund more direct access to private equity and provide an instant network across Europe and Asia, with deal teams plugged into governments, banks and local companies.
Yesterday 3i declined to comment and Borrows could not be reached.
PROFILE: SIMON BORROWS
SIMON Borrows was widely tipped to be the next chief executive of 3i when he joined the London-listed private equity firm in October last year.
Analysts at Numis said he would “play a role in the future strategy of the company” after he was lured from Greenhill & Co while Oriel Securities flagged him up as a man “able to take on senior management roles going forward”.
Sir Adrian Montague, chairman of 3i, did not go that far but hailed Borrows as someone who would bring a “a broad range of financial and investment experience and transactional capability”.
His appointment was seen as strengthening the senior dealmaking team after a 2010 reshuffle which saw the departure of its long-time head of buyouts Jonathan Russell.
Borrows previously spent 13 years at Greenhill, where he founded the European arm and became co-president of the group on its flotation on the New York Stock Exchange in 2004 and co-chief executive in 2007.
He was credited with turning Greenhill from a small American investment bank to a major force in advising on European deals, including the sale of EMI to Terra Firma in 2007.
Borrows’ work at Greenhill helped him to amass a significant personal fortune and he is worth around £149m, according to newly-published The Sunday Times Rich List, which ranked him at number 515.
In a long City career Borrows has also advised some of Britain’s biggest companies, including G4S, Tesco, business media group Informa, car dealer Inchcape and National Express.
He has contributed heavily to Britain’s National Theatre, where he sits on an advisory board, and his recent donations have been estimated at £4m.
A graduate of London University and London Business School, Borrows is also a non-executive director of Inchcape and British Land, the property developer once run by banker Stephen Hester.