Ex-FD Michael Queen takes up CEO reins as royal storm brews over 3i

Troubled private equity group 3i has made former FD, Michael Queen, its new chief executive after bumping Philip Yea, as the value of its top investments slumped by more than a fifth.

Queen joined 3i in 1987 and became FC in 1996, moving to group finance director a year later. He served as chairman of the British Venture Capital Association in 2002. In 2005, he made a lateral move out of the finance function to run its growth capital business globally and two years later he launched its infrastructure business, becoming managing partner of that division.

Commenting on his appointment, 3i chairman Baroness Hogg lauded Queen’s “deep experience of seeing 3i through several challenging cycles in the industry [that] make him a natural successor to Philip Yea.”

Queen’s promotion continues a trend at 3i for elevating FDs into the CEO slot. Two jobs before joining 3i as CEO, Yea served as group FD at Guiness and then as group FD at Diageo after Guiness’s merger with GrandMet which resulted in the creation of the new group. Yea’s predecessor, Brian Larcombe, took the chief exec role at 3i in 1997 after five years as its director of finance and planning, and in 2004 led its flotation on the London Stock Exchange.

Queen’s successor in the FD role, Simon Ball, didn’t make it to the top job. He was ousted last November to make way for Julia Wilson, his deputy of two years and now one of just two female group FDs in the FTSE-100, alongside Cairn Energy’s Jann Brown. It is too early to tell if Wilson intends to continue the FD-to-CEO trend at 3i.

Challenges ahead
Queen is mindful of the challenge he takes on as CEO amid recession. Notice of his appointment came the same day 3i admitted the value of its top 50 largest investments, which account for 61% of its total portfolio worth £5.9bn, had plummeted 21% before foreign exchange gains between September and December 2008. The value of its shares fell 73% by the end of last year ­ the same loss in v alue that Lloyds TSB’s (now Lloyds Banking Group) shares saw for the period, making it one of the worst performers in the index.

“These are tough markets and the macro-economic environment is clearly challenging,” Queen says. “But 3i is an outstanding business with the brand, people and the financial strength to weather current difficulties and strengthen its position in the market, globally.”

Media reports at the same time as Queen’s appointment suggested one of its holdings, VNU Business Media Europe, could be the subject of a creditor takeover because it is close to breaching some of its banking covenants.

In an interview with Financial Director in 2003, Queen told us: “We’re in business to take risk. It also means that a number of our investments fail. Quite often what we [say] is, ‘Instead of putting £20m into that business, why not put in £30m and structure the deal in that way?’”

Read Financial Director's 2003 interview with Michael Queen as 3i's FD