3i struggles against tough headwinds

3i, the private equity and debt management firm made a loss of £523m during the six months to September but in an effort to head off shareholder rage the board has more than doubled the dividend to 8.1p, up from 3.6p.

3i makes no effort to disguise the difficulties it has faced in the past half year, with Chief Executive Michael Queen commenting on the results: "We have not been immune to the broader market turmoil and the challenging environment has had a direct impact on our results."

3i owns companies as diverse as Foster and Partners, the architects for the Gherkin through to the London super club, the Ministry of Sound.

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That diversity however hasn't helped its net asset value which dropped from £3,161m in September 2010 to £2,804m this year. The gross portfolio return is also in negative territory (-8.3%) versus a rise of 8.7% in 2010.

Despite the bad news the firm has reduced debt from £2bn at the end of March to £1.7bn by the end of September.

Today's difficult results had been expected which, combined with the dividend boost probably explains 3i being down just 0.85% at 3.31pm.

BS