3i is reducing its headcount by 17% in reaction to current market conditions. The restructuring is a performance-related decision, following a decrease in net asset value by 22.6% for the six months to Sept. 30, 2001.
The firm will close seven of its smaller offices in the U.K. and continental Europe. The closures will result in 185 redundancies. One-third of the cuts will be in continental Europe, one-third in the U.K. and, the remaining one-third will affect support teams in the U.K. After the reorganization, 3i will have 36 offices operating in 16 countries.
The firm is looking to maintain a strong balance sheet in the current unstable market. With levels of new investment down from last year and a low staff turnover, fewer staffers will be needed to meet anticipated investment activity.
Liz Hewitt, director of corporate affairs at 3i, said, “We are matching our resources to how we view the market. Our aim is to increase the size of the larger offices, while closing down our smaller offices. We are keen to make sure all our offices are fully busy.”
As part of the restructuring, Director Rod Perry will assume responsibility for technology investments across the business. Jonathan Russell will take on similar responsibility for the management buyout business, and Martin Gagen, director of the U.S. business, will also take on responsibility for Asia Pacific.
Last year, 3i stormed through a number of European acquisitions following its abortive bid for Electra Investment Trust back in the spring of 1999. In February 2000, 3i bought Munich-based technology venture capital investor Technologieholding for an estimated $166 million. In May that same year it bought Finland’s venture capital firm SFK Finance for $10 million and followed this up some four months later with the acquisition of the 80% that it did not already own in Bank Austria‘s TFV High Tech-Unternehmens for $65 million. The buying spree came to an end with the purchase of part of Ratos, the Swedish stock exchange listed private equity investor, in February 2001.