3i Group plc's (LON:III) high institutional ownership speaks for itself as stock continues to impress, up 5.4% over last week

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editorial-team@simplywallst.com (Simply Wall St)

Mon, Jan 20, 2025, 12:00 AM 4 min read

A look at the shareholders of 3i Group plc (LON:III) can tell us which group is most powerful. The group holding the most number of shares in the company, around 84% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week’s 5.4% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The one-year return on investment is currently 61% and last week's gain would have been more than welcomed.

Let's take a closer look to see what the different types of shareholders can tell us about 3i Group.

View our latest analysis for 3i Group

ownership-breakdown — LSE:III Ownership Breakdown January 20th 2025

What Does The Institutional Ownership Tell Us About 3i Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

3i Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of 3i Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — LSE:III Earnings and Revenue Growth January 20th 2025

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in 3i Group. BlackRock, Inc. is currently the company's largest shareholder with 9.1% of shares outstanding. With 5.3% and 5.1% of the shares outstanding respectively, WCM Investment Management, LLC and Capital Research and Management Company are the second and third largest shareholders. Furthermore, CEO Simon Borrows is the owner of 1.7% of the company's shares.

A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of 3i Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in 3i Group plc. It is a very large company, and board members collectively own UK£657m worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 14% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand 3i Group better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.