* Exceeds cost-savings target for the year by 28 pct
* Increases net asset value per share to 311 pence
* Share price has doubled in CEO Borrows' first year
* No communication with activist investor Bramson
LONDON, May 16 (Reuters) - British buy-out firm 3i has agreed to work closely with major investment partners to buy into companies together, sidestepping the need to raise new funding in the short term.
3i, which owns fashion retailer Hobbs and Tommee Tippee baby bottle maker Mayborn, has been on a drive to reboot its flagging fortunes after shareholder frustration at weak results from its buyout business, together with a poor share price performance, forced a change in chief executive last year.
Announcing 3i had far exceeded its cost-savings goal for the year, Chief Executive Simon Borrows said the company had agreements with both a large sovereign wealth fund and a major UK institution.
"They are in place and there may be more to add to that. Those people will be at the front of the queue in terms of co-investing with us," Borrows told reporters. "They will have the right to say whether they want to be in a particular deal."
Borrows, a former investment banker who was previously 3i's investment head, replaced Michael Queen a year ago, charged with turning around a business hit by a series of poor deals in recession-hit European markets.
The CEO also has activist investor Edward Bramson's Sherborne Investors to contend with. Sherborne recently revealed it had raised its stake in 3i to 4.9 percent and described it as a "target company".
Since the financial crisis, big institutional investors have been putting less money into private equity and becoming pickier about the firms they back. Many private equity firms have had to scale back fundraising plans, in contrast to the pre-crisis boom years when they easily beat their targets.
Private equity funds in Europe raised nearly $52 billion in 2012 compared with an annual average of more than $100 billion during the 2006-2008 boom.
3i last raised a pan-European fund in 2006.
Reporting its results for the year to March 31, 3i said it had exceeded its 40 million pound cost savings target by 28 percent and would now increase that target to 60 million pounds by the end of March next year.
It has also already met its target of reducing gross debt below 1 billion pounds by June.
Over the last year it has cut 168 staff, or 39 percent of total headcount, and closed six offices around the world.
Its recent woes stem from its having invested heavily in companies during the peak of the buy-out market in the mid 2000s in mature regions or declining western European markets such as Britain and Spain.
3i, which was set up after World War Two to help with the reconstruction of British industry, has moved away from just private equity, aiming to balance this better with its infrastructure and debt-management businesses.
Shares in the company, which have doubled since Borrows took over a year ago, were down 5.6 percent at 343 pence by 1025 GMT.
JP Morgan analyst Christopher Brown said Bramson was the big unknown in 3i's future. "It remains unclear whether it will take its considerable profits and move on or whether it will aim to appoint its representatives to the board," he said in a note.
"Given the progress made since Simon Borrows took over, the strong share price performance and the additional cost savings, profit-taking by Sherborne is looking increasingly likely."
Borrows said 3i had not had any communication with Bramson.
"We are clueless as to what he is up to," he said.
3i's diluted net asset value per share, a key measure for valuing its portfolio, was up 11.5 percent on the year at 311p.
The company has made a series of disposals, including of plastic equipment maker Mold Masters. These private equity exits generated proceeds of 575 million pounds over the year, down from 770 million a year earlier.