In short: Referenced only — held, no new view. Weight ~3.4%. Sheet: EPS 1.63 → 2.48 (15.0%/yr) + 3.1% = 18.10%/yr, second only to Fairfax among the non-KPG names.
In short: BUY (portfolio). ER 15.89%; fair value 53.40 vs 26.51 (50.4% under); fwd PE 25.66 vs 30.20 (14.9% under); RDCF 9.0% vs 11.0%. YTD −17.4%.
In short: ~3.5% of the book, and the worst performer in the portfolio: −48% year-to-date and −56% over twelve months. Yet 18x NTM P/E on a 15% EPS CAGR and the second-highest modelled three-year return at 18.10%, helped by a 3.1% dividend. 1,700 shares yielding $2,793.19. A halving in a year passes without a single line of comment — the most conspicuous silence in an issue about raising the bar.
3i is a listed British private-equity firm whose value has for years been dominated by one holding, the European discount retailer Action. Its shares are down 48% this year and 56% over twelve months — by a wide margin the worst performance in the portfolio.
Despite that, it shows the second-highest modelled three-year return of any holding, about 18%, helped by a 3.1% dividend and expected earnings growth of 15%, at 18 times next year's earnings.
The thing to notice is the silence. In a letter whose stated purpose is to ask "what is not going well", a position that has more than halved in a year is not mentioned once outside the tables. Whether the fall reflects the value of the underlying businesses or only the market's mood is exactly the question a skeptical review should have answered.
In short: BUY (portfolio). ER 15.69% on 11.0% growth and a 3.0% yield; fwd PE 25.66 against a 30.2 average (14.9% under); RDCF 9.8% required vs 11.0% expected (+1.2pp). Fair value $54.4 vs $27.94 — a 48.7% stated discount. YTD −13.0%.
In short: BUY. The highest three-year expected return after Kelly Partners and Topicus. Bought 18 May 2026; $33.5 against a $50.8 fair value — +51.6%. Expected yearly return 18.10% — 15.0% EPS growth plus a 3.1% dividend yield, the highest yield in the book. EPS 1.63 → 2.48 by 2028. Down 19.5% YTD against a 19.8% five-year CAGR.
In short: BUY, Very Strong conviction. FV 53.0 vs 25.9 = 51.3% under; ER 16.0%; fwd PE 25.7 against 30.2 (14.9% under); RDCF 8.8% vs 11.0% — now positive, where June's was marginally negative. YTD −19.5%.
In short: BUY, Very Strong conviction. FV 49.7 vs 22.09 = 55.5% under; ER 16.5%; fwd PE 25.66 against 30.2 (14.9% under); RDCF 11.7% required vs 11.0% expected — the one model that is marginally negative. YTD −31.2% after the results-day fall that prompted the 17 May purchase.
In short: BOUGHT — $50,000, 1,700 shares, limit 2,300 pence, "on Monday", via Interactive Brokers. Four headline claims: "Grows by >15% per year", "one of the strongest management teams in history", "trades at a 28% discount to its intrinsic value", "actively buying back its own shares". Described as "an investment firm focused on mid-market private equity and infrastructure" at a 2,223p price and a £22.8bn market cap. The record: NAV from 279p to 3,030p since the CEO took over in 2012, more than 1,000%, driven mainly by Action, whose sales went from €718m to €16,000m since 2011 — about 25% a year. The entry: results day saw like-for-like growth at Action fall to 2.4% from 6.8%, weak in France and Germany, and the stock down 14% — while net income rose 5.1% to £5,294m and EPS 3.3%. Management announced a repurchase of up to £750m and said comparables get easier in the second half. "Over the past 20 years, the company has never traded at such a large discount as today." Total Quality Score 8.3/10.
3i Group is a London-listed investment company: it buys medium-sized private businesses and infrastructure assets and holds them. You are buying a share of that portfolio rather than a single operating business.
Almost all of the value sits in one holding — Action, a European chain of cheap non-food shops. Its sales have gone from €718 million to €16 billion since 2011, about 25% a year. Across the whole portfolio, the stated value per share has risen from 279p to 3,030p since the current chief executive took over in 2012, more than a ten-fold increase.
The purchase was triggered by a price fall, not by news. Results came out on the Thursday and the shares dropped 14% in a day because sales growth at Action's existing stores slowed to 2.4% from 6.8%, with France and Germany weakest. Everything else went up: profit rose 5.1% and earnings per share 3.3%. The reasoning is blunt: "Mr. Market didn't react positively to the recent results. That's exactly why we decided to buy the company."
The result is that the shares at 2,223p trade at roughly a 30% discount to what the portfolio is stated to be worth — the widest gap in twenty years. Management appears to agree, announcing a buyback of up to £750 million. If the discount closes and the assets keep growing, you get paid twice.
The purchase: $50,000, 1,700 shares, with a limit price of 2,300 pence. The number to watch afterwards is Action's like-for-like sales growth, because with one asset this dominant, 3i is largely a bet on that single figure.
In short: NEWLY ADDED to the Buy-Hold-Sell List — "UK based investment holding company." Rated BUY on arrival: EPS growth 11.0%, dividend 3.1%, FWD PE 25.7 against a fair exit 30.0, expected return 15.8%, fair value 50.8 against a 25.7 price = 49.5% undervalued. Priced at a small NAV discount on 21 April and ranked Best Buy #2 on 3 May.
3i Group joins the watchlist this month and arrives already rated a Buy. It is a UK-listed investment company whose value comes almost entirely from Action, the European discount retail chain.
The model puts fair value at 50.8 against a market price of 25.7 — the shares priced at roughly half what the underlying business is reckoned to be worth — with an expected annual return of 15.8%, helped by a 3.1% dividend.
Its arrival completes a sequence worth noting: priced at a small discount to net asset value on 21 April, named a buy candidate on 28 April, ranked the month's second-best idea on 3 May, and formally added to the rated list on 7 May. Four appearances in seventeen days, each one a step closer to a purchase.
In short: Best Buy #2. "3i Group is essentially an investment in Action, the European discount retailer." Action grew sales to €16bn in 2025 while the stock dropped nearly 50% from its highs, for two named reasons: French like-for-like growth — its second-largest market — slowing to 2%, raising saturation fears; and a €400m plan to take Action to the United States (the Southeast, late 2027), with investors worried it "will become the next 'Lidl' or 'Tesco' and fail to catch on in America." The defence is the model: "Action's 'Scale Economies Shared' model is incredibly resilient. It's exactly the same model that made companies like Amazon and Costco so successful." And the structure of the opportunity: "you are getting the European business at a bargain, and the US expansion is essentially a free call option", on top of a clear discount to NAV.
3i Group is really one investment: Action, the European discount chain, which sold €16 billion of goods in 2025. The shares have nonetheless fallen nearly 50% from their high.
Two things spooked investors. Sales growth in France, Action's second-biggest market, slowed to 2%, which raised the fear that Europe is filling up. And 3i committed €400 million to launching Action in the American Southeast in late 2027 — and European retailers have a poor record in America; Tesco's attempt failed expensively.
The counter-argument is about the business model. Action buys in enormous volume, passes the savings to customers as lower prices, attracts more shoppers, and buys in even greater volume — a cycle known as scale economies shared, and the same one that built Amazon and Costco. It does not stop working because one country's growth slows for a year.
The neat way of framing the opportunity: the shares trade below the stated value of what 3i owns, so you are buying the European business at a discount and getting the American venture thrown in for nothing. If it works, that is a large bonus; if it fails, you have not paid for it.
In short: Buy candidate #2. "3i owns Action, Europe's fastest-growing discount retailer. Action opens hundreds of stores per year with remarkable consistency" — the word "consistency" doing deliberate work in an issue whose new policy is the linearity of growth. Same non-marked-daily argument as KKR: "3i's holdings aren't publicly quoted day-to-day. That lets them focus on what's really important: store openings, margins, long-term value creation." Priced at a small NAV discount on 21 April; Best Buy #2 on 3 May; added to the Buy-Hold-Sell list on 7 May.
3i Group is a listed investment company whose value comes overwhelmingly from one holding: Action, the European discount retailer.
The word used for Action here is the important one — it "opens hundreds of stores per year with remarkable consistency." This issue introduces a new rule that steady growth is worth more than the same growth delivered in lurches, and Action is offered as the example of it.
Like KKR, its assets are not quoted every day, which the author treats as helpful: it means management watches store openings, margins and long-term value creation instead of the share price. The valuation case was made a week earlier — the shares trade slightly below the stated value of what the company owns.
In short: The only candidate actionable at today's price. NAV at end-2025 of 3,017 pence against a share price of 2,859 pence — "a small discount… buying 3i Group at a discount compared to its NAV is never a bad idea if you ask me." The company is effectively one asset: ~90% of 3i's private equity returns come from Action, "the fastest-growing non-food discount retailer in Europe" with a 26% revenue CAGR since 2011. Unit economics: Action "earns back the ~€500k it spends to open a store in less than a year", self-funding roughly one new store a day. Runway: the UK and Scandinavia have none at all. Alignment: CEO Simon Borrows owns over £585m of 3i shares — 865x his base salary.
3i Group is a listed company whose job is to buy stakes in private businesses, improve them, and sell them at a profit. In practice it is one investment wearing a company's clothes: about 90% of its private-equity returns come from a single holding, the European discount chain Action.
Action is the thing to understand. It sells cheap non-food goods, has grown revenue at 26% a year since 2011, and — the key number — recovers the roughly €500,000 it costs to open a store in under twelve months. A business that gets its money back that fast can pay for its own expansion out of profits, which is how it manages to open roughly a store a day without borrowing. It advertises almost nothing; low prices do the marketing. And it has barely started in Britain or Scandinavia.
Because 3i is a holding company, the way to value it is not a profit multiple but net asset value — what the things it owns are worth, added up. At the end of 2025 that was 3,017 pence a share, and the shares trade at 2,859 pence, so you can buy the assets for slightly less than they are reckoned to be worth. The chief executive owns £585 million of stock, 865 times his salary, which means he is paid by the same thing you are.
In short: Best Buy #2. Action — "a European Costco or Dollar General" — is ~76% of the private-equity portfolio, running the bulk-buying flywheel "Nick Sleep called Scale Economies Shared," with store count doubling every 4–5 years. "3i acts more like a holding company than a traditional PE firm, holding onto its best assets for decades. That's how they've doubled their Net Asset Value in the last three years." The stock is down nearly 50% in six months: Action's sales growth slowed from ~10% to ~5%, French competition is forcing price cuts (sales +2% there), and Europe is saturating — with €350–400m committed to a US rollout. "This price drop has 3i Group currently trading at a clear discount to its Net Asset Value."
3i is a UK investment company whose value is dominated by one holding: Action, a European discount retailer that sells cheap household goods and now makes up about three quarters of its private-equity portfolio. Action works the way Costco and Amazon do — every efficiency it gains from buying in bulk is handed to the customer as a lower price, which brings more customers, which allows even bigger bulk buying. The investor Nick Sleep gave this loop a name: Scale Economies Shared. The store count has been doubling every four to five years.
What separates 3i from an ordinary private-equity firm is that it does not sell its winners to collect a fee — it behaves like a holding company and keeps them for decades, which is how its net asset value doubled in three years.
The stock has nearly halved in six months for reasons Slegers states rather than skips: Action's sales growth has slowed from about 10% to about 5%, competitors in France (its second-biggest market) are forcing price cuts so sales there grew just 2%, Europe is filling up with Action stores, and 3i is committing €350–400m to an unproven US expansion. The result is that the shares now trade at a clear discount to the value of the assets they represent. The row uses the London ticker (III.L) because bare "III" belongs to Information Services Group.
In short: Spotlight. A UK investment company (founded 1945) that invests its own balance sheet and now runs on one rule — "let your winners run." Action, the European hard discounter, is 76% of the private-equity portfolio: "An investment in 3i Group is basically an investment in Action," a scale-economies-shared flywheel "just like Amazon and Costco." The stock fell ~20% since October 2025 because Action's like-for-like growth was 6.5% versus 6.8% expected — "Investors were totally upset by the 0.3% difference. I kid you not… This is short-term noise." NAV has doubled in three years; CEO Simon Borrows: "the fifth consecutive year we have delivered a total return over 20%; the average annual total return was 30%."
3i Group is a UK investment company that invests its own money — not a fund managing other people's — into private businesses, and it holds onto the good ones instead of selling them to book a fee. One holding now dominates: Action, a European non-food discount retailer, is about 76% of its private-equity portfolio. As Slegers puts it, "an investment in 3i Group is basically an investment in Action."
Action works on a loop that feeds itself: buying in enormous volume makes goods cheaper, cheaper goods mean lower shelf prices, lower prices bring more shoppers, and more shoppers mean still bigger volumes. The customer gets a share of every efficiency gain — the same mechanism that built Amazon and Costco.
The stock fell almost 20% from October 2025 for one reason: sales growth in existing stores came in at 6.5% instead of the 6.8% investors expected. "Investors were totally upset by the 0.3% difference. I kid you not." Meanwhile the underlying value — 3i's net asset value — has doubled in three years, and the CEO reports a fifth straight year of 20%+ total returns averaging 30% a year. The row uses the London ticker (III.L) because bare "III" belongs to Information Services Group.
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.