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.
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?’”
Director’s 2003 interview with Michael Queen as 3i’s FD