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3i continues to downsize.

3i is to close its offices in Padua and Nantes this summer. 3i will then have a total of 29 offices (25 across Europe and two each in the US and the Asia Pacific region). 3i has also ceased making new investments from its Glasgow, Bristol and Leeds offices where the managers will instead focus on portfolio management. The executives responsible for new investment in these offices will be redeployed.

During 2003 3i’s headcount was reduced from 858 to 750 continuing the cost reduction measures and changes in investment processes and resource alignment initiated over recent years.

The group’s chief executive Brian Larcombe announced his intention to retire in March, and the firm is in the process of identifying his successor. An announcement will be made at the Annual General Meeting.

Recent rumours suggest the group has become the subject of a possible takeover after a slowdown in its third party fund raising to fund investments, according to reports this weekend. 3i declined to comment.

In its annual results 3i achieved a total return of £531m for the financial year, which equates to 18.1% on opening shareholders’ funds. The group’s mid-market buyout investments performed well generating a return of 22.6% and returns in the smaller buyout and growth capital businesses also performed well generating returns of 22.1% and 26.8% respectively. The venture capital business however did not fare so well produced a negative return of -6%.