Britain's 3i sees returns rise, says no need for fresh funds

* Total returns rise by a third to 234 mln pounds

* CEO says no need to raise fresh funds (Adds CEO comment, detail)

By Freya Berry

LONDON, Nov 13 (Reuters) - British private equity company 3i Group said a strong performance from its larger investments helped to boost total returns, which rose by a third in the first half of the year despite Europe's economic stagnation.

The owner of women's fashion chain Hobbs and lingerie firm Agent Provocateur made a return of 234 million pounds ($369 million) in the six months to the end of September, up from 175 million pounds last year. That was despite market volatility and a foreign exchange loss of 73 million pounds in the period.

It is seeing the best returns on larger investments such as Dutch discount retailer Action and Mayborn, the maker of products for young children under the Tommee Tippee brand.

A combination of proceeds from sales and the lack of available assets meant the group did not currently need to seek funds from investors, said Chief Executive Simon Borrows.

"In truth we are raising a lot more cash from realizations than we see as good investment opportunities, so we don't need third-party money," Borrows said on a conference call. "We have a lot of cash on our balance sheet."

The group was one of the best performers in the FTSE 100 , rising 1.6 percent to 408.5 pence at 0955 GMT.

3i has recovered under Borrows' leadership after struggles with debt and poor performance.

In recent changes to its portfolio, it purchased German jeweller Christ in October, and is selling Agent Provocateur.

Borrows said that the group had installed a new team at women's fashion retailer Hobbs and had no plans to sell the company in the short-term.

The group warned that signs of recession and deflation in the eurozone and global conflicts had increased market volatility, including in the forex market. Competition for good assets meant prices in Europe were higher than in the United States, Borrows said.

The fund said proceeds from asset sales and refinancing came to 324 million pounds in the six months to Sept. 30, down from 528 million pounds in the same period in 2013.

($1 = 0.6340 British Pounds) (Editing by David Clarke/Keith Weir)