ON the surface, venture capitalist 3i has had a stunning week. It made a big return on three investments - cashing in on the float of technology firm E2V Technologies, the sale of shares in Cambridge Silicon Radio and offloading its stake in superstore chain Pets at Home.

That is impressive stuff in an industry where the holy grail is to help build businesses then make a profitable exit. But beneath the surface cracks are starting to appear at the UK's only FTSE 100 venture capital firm.

Just weeks after outsider Philip Yea became chief executive there is tension among senior ranks. There is talk both inside and outside the firm of fresh departures by senior staff and there have been persistent murmurs of disquiet about chairman Baroness Hogg.

3i is already feeling the loss of four heavy hitters who left last October to set up rival business Exponent, focused firmly on midmarket companies, traditionally the domain of their old employer.

The gap they left behind has been vast. 'All the big deals were done by that team,' says one industry insider. Crucially, the four, led by the highly-regarded Tom Sweet-Escott, were also heavily involved in fundraising.

They used their skills and contacts to raise their own £260m fund within just four months. Compare that with 3i's attempts to raise a European fund. It achieved about £543m from outside investors, but had hoped for far more.

One criticism levelled at 3i is that it has wandered away from its core mid-market and tried to invest in bigger deals. But it failed to win the £665m bid for the Telegraph newspapers, losing about £1m on fees in the process.

The company says it has a 'good pipeline of new investment opportunities' and that 'realisations have continued to be strong'.

But rivals suggest that it may now need more than this.

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