RICHARD BISHOP against 3i INVESTMENTS PLC

Facts [3] The Lord Ordinary made detailed findings of fact, and these have been incorporated by the parties into a joint minute of admissions. The following narrative is based on that joint minute.

[9] In the last five years 3i has only made one growth capital investment in the United Kingdom. It invested £27 million (€32.8 million) in a company known as Go Outdoors in 2011. 3i’s accounts for 2013 state that its strategic priority is to cut down staff and to focus on “harvesting” existing investments. It aims to make five to seven high-level investments each year in the global areas in which it operates. Its goal is to secure a return of approximately 15 to 20%.

[14] Secondly, in relation to competition for funds, the Lord Ordinary held that there was no competition because BGF was funded by five clearing banks while 3i was funded by external investors and shareholders. That is a finding that is in our opinion clearly justified on the evidence; BGF was created under government auspices to implement the recommendations of the Rowlands Report, and in that way the co-operation of the clearing banks was achieved. Thus there is no need for BGF to raise funds on capital markets.

Terms of the limited partnership agreements [18] The limited partnership agreements all contain a definition of the expression “competing leaver” in Schedule 3, which deals with leaver and new investing partner arrangements. In all but the first (that relating to UK Private Equity 2004-06), the definition, so far as material to the present case, is in the following terms; in that definition “Manager” means 3i Investments PLC or its successor as manager of the partnership and “Associate” means, in general terms, a member of the 3i group: a competing leaver is

“any Ordinary Leaver… who,… at the time of or within 24 months of becoming an Ordinary Leaver: