3i Group (III) plunged 17% yesterday to a 14-month low and a 24% discount after Action, the European discount retailer accounting for over two thirds of the FTSE 100 private equity fund’s assets, announced a €350m-€400m plan to launch in the US from next year. 3i has more than halved since October when Action first reported slowing sales. Action chief executive Hajir Hajji told investors he recognised the difficulties other companies had suffered with US expansion. “We have assessed the lessons learned and decided that our organisation is now strong and sizeable enough to execute a US entry.” The announcement came in an update showing Action had made a positive start to the year with 4% like-for-like sales growth in the first 12 weeks of 2026 although it said France continued to trade slightly below expectations. The shares have risen 2% this morning after the discount widened from its previous 8.5%. Its previous high rating is shown by its 37% one-year average premium.
QuotedData senior analyst Matthew Read said: “Action has undoubtedly been a huge success story for 3i but there a number of cautionary elements to this tale. First, while it makes sense to run your winners if you have huge conviction in them, this also needs to be balanced against good portfolio management discipline and taking the opportunity to right size your positions where able. Action accounts for around 70% of 3i’s NAV, and is around 20 times bigger than the next largest holding, so represents a huge concentration risk if things go wrong. Second, for 3i’s investors, it can be very risky to buy investment companies on huge premiums. Once again, there’s little to cushion you if things go south.”
Geiger Counter (GCL), the £68m uranium fund benefiting from soaring demand for nuclear energy, has followed CQS Natural Resources Growth & Income (CYN) in saying that Toronto-based Manulife mining managers Diana Racanelli and Craig Bethune will work with managers Keith Watson and Robert Crayfourd while they serve their notice period before joining Tufton Investment Management. Watson and Crayfourd remain the named portfolio managers and there is no change to investment process, strategy, or day‑to‑day operations, the company said. Its board continues to assess its options for future portfolio management arrangements.
Investment company activist Achilles (AIC) is to consult shareholders on its strategy after buying into private hospital operator Spire Healthcare (SPI) with other Harwood Capital trusts. Chair Charlotte Denton said: “The investment policy at flotation was arguably not drawn widely enough to permit investment in certain companies, including some self-managed property companies. These companies share many of the same characteristics of investment companies, including their value being substantially underpinned by investments in real assets, but do not take the legal form of a closed-ended investment company. Following consultation with the company’s adviser, a non-material change was implemented to widen the investible universe. In light of portfolio development, including the investments in Empiric Student Property plc and Spire Healthcare plc, the board intends to consult shareholders regarding the investment strategy.” While ESP was bought by larger rival Unite (UTG), Spire shares have fallen 15% over one year following the recent termination of takeover talks. The maiden annual results reveal AIC’s other campaigns were Urban Logistics, Life Sciences REIT, HICL Infrastructure and currently it is engaged with Aquila European Renewables (AERI) whose wind-down is being overseen by fund manager Robert Naylor who is the fund’s chairman.
Matthew Read said: “It is still very early days for Achilles’ strategy, but shareholders may be disappointed that returns so far have been modest. Wide and persistent discounts across alternative asset trusts provide fertile ground for engaged shareholders, the opportunity could still be significant. Encouragingly, the investment manager can point to a number of successful interventions that have driven corporate activity and, in some cases, attractive returns. However, the period also illustrates that, for a strategy such as this, returns are unlikely to be smooth, with performance heavily dependent on the timing and outcome of individual campaigns. The absence of a list of holdings and weights in the interim report is annoying – if I were a shareholder I would want better disclosure – although, it is understandable that AIC would not want to disclose positions that it was still building.
“With NAV already moving ahead post period end, there are early signs that the approach is gaining traction, but the managers will now need to prove that they can consistently capitalise on this opportunity and translate it into sustained shareholder returns if they are going to retain investors’ attention.”
Stay a step ahead. Our daily newsletter brings you the latest on investment trusts and active ETFs. Subscribe here.
