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Essay on Little Sheep Case study

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3i Group plc and Little Sheep*
Lily Fang

Roger Leeds

insead

School of Advanced International Studies, Johns Hopkins University

“Many people grow a company like raising a pig. The pig gets fat, you kill it and make money. I grow my company like raising a son. The average life of a restaurant is less than three years in China. I want Little Sheep to last a century.”
– Zhang Gang, Founder, Little Sheep Catering Chain Co.
“Helping a great business to realize its potential takes a lot more than just capital. It is ultimately about the people, thus your relationship with the management team and the sort of support you can provide, such as introductions to key industry expertise and relevant operational best practice, is very
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The firm opened its first Asia office in Singapore in 1997, followed by a second office in Hong Kong four years later, and offices in Shanghai, Mumbai and Beijing subsequently. During fiscal year 2006, 16% of the group’s new investments were in Asia. Alongside the geographic shift, 3i’s investment strategy has also evolved, with an emphasis on making fewer, larger, and more sector‑focused investments. In Asia, the group’s average investment size has been about $40‑50 million, and sectors in focus included consumer‑related goods and services, healthcare, and energy.
These changes in investment strategy were consistent with a decision to become more actively involved in its portfolio companies, returning to the firm’s original modus operandi as an “investor in industry”. To better serve its portfolio companies, 3i developed two unique programmes:
People Programmes and Business Development Practice.
People Programmes is a highly sophisticated approach to cultivating relationships internationally with seasoned

* The authors express their appreciation for the research and editing support provided by Brian DeLacey.
T
 he perceived funding gap – the “Macmillan gap” – was scrutinized back in 1929 in a report by a committee under the chairmanship of Lord
Macmillan. The founding of ICFC, predecessor of 3i, was closely linked to one suggestion in the Macmillan Report.
2
3
 i’s growth capital and venture capital investments are
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