3i pledges special dividend as it reaps benefits of overhaul 3i Group has pledged to pay a special dividend this year, passing on to investors some of the benefits of increased asset sales and an operational overhaul of the London-listed private equity group over the past year. Including its annual base dividend of 8.1p, the group on Thursday promised an overall payout of 20p a share for the financial year ending in March 2014. It said successful efforts since last year to sell off assets, cut costs and thereby slash debt would allow it to enter this next phase of its strategy of improving shareholder returns. The private equity, infrastructure and debt investment group said it had moved from a net debt position of £335m in March last year, to net cash of £28m at the end of September this year, after almost halving its debt load in the same period. "We are now generating some real momentum in the business," chief executive Simon Borrows said. But net asset value dropped slightly from 326p a share in June to 322p at the end of September. The figure missed Oriel Securities" estimated range of 330p to 340p. The company reaped £528m selling private equity assets in the first half, almost doubling its £268m sales proceeds from the same period last year. Its fresh investments slowed down from £118m in the first half of last year to £81m this year. Its total return stood at £175m in the first half, up from a small loss in the same period the year before, but dragged down by non-cash accounting charges relating to foreign-exchange movements in derivatives and pension accounting. The group said it would remain on track to exceed its cost-cutting target of £60m by March next year, after materially reducing expenses in the first half. Britain's oldest private equity investor has overhauled its operations since Mr Borrows took over as chief executive in May 2012. It shrank its international network and slashed jobs, mainly at its private equity unit, whose spending spree at the top of the market saddled it with high debts and hindered the group's ability to return capital in the aftermath of the financial crisis. Mr Borrows has concentrated on selling private equity assets, while boosting the company's younger debt management platform to diversify. Recent disposals have included Bestinvest to London buyout group Permira. However, Mr Borrows has lately been keen to show the private equity team could also find new investments. The company acquired the 50 per cent stake it did not already own in Nordic ferry company Scandlines this month and purchased German transmission testing company GIF for €100m in September. Shares in 3i were flat at 368.7p in early London trading. They had dropped 3 per cent on Wednesday on news that activist investor Edward Bramson had cut the 5 per cent stake he had built 10 months ago, pocketing a 38 per cent profit. Mr Bramson's stake-building had boosted 3i's share price significantly above its net asset value this year. "Although 3i has made significant progress against its strategic objectives, we believe it does not yet warrant trading on a double-digit premium to net asset value," Liberum Capital analyst Rob Jones wrote in a note to clients.