LONDON (Reuters) - British private equity firm 3i Group Plc (L:III) on Thursday reported a 17 percent increase in its net asset value year-on-year to 4.5 billion pounds and said uncertainty over Britain's referendum on the European Union would hit M&A activity and investment.
3i, which completed a three-year restructuring last year, said diluted NAV, a measure of the value of 3i's assets, rose to 436 pence a share in the year to end of March, against 396 pence in the previous year.
3i, which owns Dutch discount retailer Action and lingerie chain Agent Provocateur, said that its total return for the year increased to £824 million, up 25 percent from the previous year.
"The combination of continuing market volatility and the upcoming Brexit referendum is likely to weigh on investor sentiment, with reduced M&A volumes and delays in capital investment likely to persist while the uncertainty remains," Chairman Simon Thompson said.
The buyout firm is in the process of listing Dutch fitness chain Basic-Fit, which has over a million European members.
3i has been selling businesses to slim down its portfolio, most recently with the sale of Tommee Tippee maker Mayborn Group to China's Shanghai Jahwa United Co in April.
The company sold 11 smaller or older assets during the year, with proceeds totalling 743 million pounds.
The board recommended a final divided of 16 pence per share, resulting in a full year dividend of 22 pence per share and said it would double the base dividend for 2017 full year to 16 pence from 8 pence, with incremental special dividends also possible.
"The updated (dividend) policy reflects management's expectations that the company will be a net divester for the next 5 years and hence generate strong realisation proceeds," Barclays (LON:BARC) analysts wrote in a note.
3i's shares rose more than 2 percent.
Last week, its infrastructure arm (L:3IN) said it would raise 350 million pounds in a share placement to fund existing and future investments.
The private equity group also unveiled a bond buyback plan, to purchase with immediate effect a 331 million euro bond due march 17 2017, at its sole discretion.