EUROPE - Venture capitalists 3i Group is to axe jobs across Europe, following a near quarter drop in share value, static profits and a shrinking of its investment portfolio. The brunt of losses will hit the UK.
Around 185 jobs will be affected, two-thirds of which will be in the UK. The rest will be at 3i’s European operations with Germany the biggest loser.
The firm announced its interim results to September 30, which showed a £1bn drop in its portfolio value. 3i cited a depreciation of small-caps and tech stocks as the main reason for the decrease, but added that most of the portfolio continued to perform “satisfactorily.”
Commenting on the cuts in its workforce 3i said that its business model now required a minimum level of resourcing that is not feasible in some of the smaller locations - seven offices in the UK and Continental Europe will be closed. 3i will then have 36 offices operating in 16 countries.
“In the current uncertain conditions, it is prudent to maintain a strong balance sheet. Investment is likely to remain at about the current level for the next year. As a result of this and very low staff turnover, fewer people are needed to meet expected levels of investment,” the firm added.
Net asset value per share also fell by 23% to 631p, and revenue profit of £69m stood unchanged on the corresponding period last year after absorbing provisions for organisational changes. 3i also saw an approximately £1.4bn fall in new investments to settle at £600m.
Over the period, 3i has completed its network in Europe, opened an office in Hong Kong and continued to develop its US activities. The latter will not be affected by the job cuts.
Chief executive Brian Larcombe added that some uncertainty existed for the industry in the short term, but was expected to stabilise in the medium term.
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