3i, the UK’s biggest listed private equity group will cut about 15 per cent of its workforce in one of the most evident illustrations of how private equity groups are pruning costs to prepare for a sharp downturn in their industry, reports Financial Times. 3i will cut 100 of its 660 staff, with half the job losses affecting its UK operations, as it trims back-office functions, including marketing and human resources.
In its pre-close briefing ahead of its half-year results, 3i saw its investments cut down by 40%. Proceeds from asset sales fell to £560 million from £1.01 billion. This is nearly a 40% reduction in the new investments by 3i in the first five months of its financial years owing to the tougher credit situation.
3i also trimmed its staff numbers from 739 in March after it announced earlier this year that it was winding down its early-stage venture capital business and closing its Menlo Park office in California. 3i is viewed as one of the more defensive groups because of its strong mid-market focus and wide geographic diversification.
The London-listed private equity group invests in growth capital, infrastructure assets and minority stakes in quoted companies. It has offices in 14 countries and manages £10bn of assets. 3i also has a significant presence in India.
3i in India
3i Group has made a few key investments in India such as Nimbus Communications, International Tractors, and International Cars & Motors, a green-field project to manufacture multi-utility vehicles. It also invested $40 million in INDIAREIT Fund Advisors, an offshore real estate fund floated by the Ajay Piramal Group.
In April, it launched 3i India Infrastructure Fund, which invested $101 million for a minority stake in Soma Enterprise Ltd, a Hyderabad based engineering and construction firm.
3i India Infrastrucre Fund’s first investment in India was $227 million for a minority stake in Adani Power, which is developing a 2,640 MW coal-based thermal power plant in Gujarat.