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3i records loss on assets

The UK's largest private equity firm, 3i, has recorded a negative return on investments as the economic crisis has eroded the value of the firm's assets.

Shareholders of the private equity company saw their returns for the first six months of the year come in at a loss of £182m, compared to a profit of £512m in the same period last year.

This is the first time in over five years that the firm has posted a negative return - since the burst of the dotcom bubble in 2003.

Chief executive Phillip Yeaman commented in a first-half statement that the second half of the year could be even more difficult for the company.

"Despite a resilient first six months of the year, we would expect a more challenging second half as the squeeze in credit markets persists, the economic slowdown affects portfolio earnings and M&A markets remain subdued," said Yeaman.

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Post Date: November 8th, 2008