Credit crunch puts brake on activity at 3i

Private-equity firm 3i today said the slowdown in mergers and acquisitions as a result of the credit crunch meant new investment fell almost 40% in the first five months of the year.

The FTSE 100 giant invested £622 million in the five months to the end of August — down from £1.01 billion in the same period last year. It made £560 million in realisations, compared with
£1.01 billion a year ago.

Chief executive Philip Yea said: "In these markets, we continue to be highly selective in respect of new investment, rigorous in managing our existing portfolio, and focused on maximising cash to cash returns.

"In line with our expectations, our investments and realisations have been broadly balanced so far this year."

Analysts said the numbers were "comforting", given the turmoil in the financial markets.

Finance director Julia Wilson said it was "really difficult" to say when M&A activity may restart.