Shares in Jessops, the photographic retailer, dived nearly 40 per cent as rumours swept the market that it was about to call in the administrators. The company, whose shares rallied to close down by just under 15 per cent, strenuously denied the speculation.

After renegotiating with its banks in June, the company says it has sufficient funds in place - despite the impact of a soggy summer which is unlikely to have encouraged the purchase of cameras for snaps of wet weekends indoors.

The rumours seem unfair, given that Jessops has put in place debt facilities until December next year and so has some time to find an answer to its problems. However questions still hang over the long-term future of the troubled chain. In June the company announced plans to close 81 of its stores and to shed up to 550 staff after it sank into a first-half loss. In that period the company said that like-for-like sales were down by 2.8 per cent, not awful in a difficult market, but behind the company’s ambitous plans.

When Jessops was finally floated out of private equity ownership after several attemps in late 2004, the stock looked overpriced and the company was weighed down by debt.

When weaknesses began to show, therefore, the stock price had nowhere to go but down. Initially, fears were limited to the likely rate of growth rather than the future of the underlying concept.

But gradually investors have come to question whether Jessops offers something sufficiently different to survive the onslaught of increasing competition from supermarkets offering cheap cameras and online specialists who have a wide range of well-priced professional-style equipment. Given that much of the merchandise is branded, Jessops has little opportunity to control pricing in a highly transparent market where customers can quickly make comparisons online.

Jessops is aiming to drive sales over the inernet but one has to question what advantage it has over generalist stores. Traditionally, it could offer keen hobbyists a wider range of equipment and expert advice. Can this be offered online and in such a large chain?

Much rests on David Adams, the executive chairman and former senior executive at House of Fraser, who took charge in May. He is well respected but not a miracle worker.

Jessops is still lumbered with its expensive debt. It is said to be considering raising money for future growth via a rights issue next year. But the shares have fallen since Jessops’s revitalisation plan was announced in June and such a plan would now be highly dilutive.

There were hopes that a private equity or trade bidder would take advantage of the low share price to swoop. But a number of likely buyers are said to have walked away.

Those still in should hold on for now as the company is unlikely to go bust in the near future. Others should avoid.

3i

TIn a market where most private equity firms have struggled to spin off investment vehicles, or worse still, are struggling with their own IPOs, 3i has quietly got its head down and launched not one, but two funds into the market. Yesterday, the company gave investors their first insight into 3i Infrastructure, a unit launched in March with a remit to invest in infrastructure opportunities globally.

Having learnt from the failure of its peers, 3i decided to populate the fund with investments the day it went public. It did so by acquiring a portfolio of assets from its parent, 3i Group, for £234 million, including AWG, the water company it acquired from Anglian Water as part of a consortium in 2006 for £2.25 billion. It raised an additional £375 million from third-party investors.

Excluding the asssets acquired from 3i, the fund has put £123 million to work since its float, including a minority investment in Oiltanking GmbH, which provides oil and chemical storage, the acquisition of The PFI Infrastructure Company and a German waste-to-energy plant. Given the current market turbulence and the stigma around private equity and public vehicles, investors will be keen to see the fund’s first interim results in November for the period to September 30, which will also include a net asset value of the portfolio.

But in an early indication 3i said its returns so far were in line with its expectations, which were set at 12 per cent on net capital raised over the long term. It’s early days yet, but given 3i Infrastructure’s solid backing and its credible management team, this is an attractive pick for investors looking for exposure to uncorrelated assets at a time of market turmoil. Infrastructure, like water assets, offers low-risk returns and 3i has global reach and lots of cash. Buy.

MirLand

Maiden half-year figures out yesterday from MirLand, the AIM-listed Russian property developer, provide property-minded investors who are taking fright over UK property an opportunity to look at some more speculative developments in the land of the great bear.

The company raised $290 million (£143 million) at flotation in December at 478p per share and promised to invest it all within 18 months. By the end of the first half it had invested a quarter of those funds and turned last year’s posttax loss into a near $60 million profit.

MirLand is investing in warehousing centres, taking income from two Moscow office schemes and the Yaroslav shopping centre, and sitting on a housing site ready for construction in St Petersburg. It also owns a 79 per cent share of a Moscow skyscraper site. The assets are valued at $1.2 billion and it is working on ten projects which should add another 1.5 million sqare feet of offices, shops and homes.

MirLand seems to have the foundations to grow in line with the Russian economy. MirLand shares added 23p to 474p, putting them close to the float price. They still trade at a discount to June 2006 net asset value per share of 554p. Property investors wanting to spread risk may wish to take profits in UK property and invest in MirLand.

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