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I’ve been impressed with 3i Group (LSE:III) pretty much since I began looking at it. Shares in the private equity firm are up 302% since 2020, outperforming every other FTSE 100 stock.
The stock has been a winner, the business is strong, and the valuation looks reasonable. Yet, somehow, I’ve never bought the shares – and I don’t really have a good reason why.
A strong business
Private equity can be a volatile business. Returns are often huge when all is good, but when they turn around the situation can get ugly in a hurry.
The reason is straightforward – people naturally want to invest when they can see things going well. But when prices are high is exactly the wrong time to be thinking of buying things.
3i has a way around this problem of investors showing up with cash at the wrong moment. It focuses on investing its own cash, which gives it the flexibility to…
