3i, the private equity group, has seen the cash it has realised from its investments shrink by almost 16 per cent in the past year from £1.9 billion to £1.6 billion.

However, the company said in a pre-close statement that there were no material changes to the overall financial performance of its portfolio of investments and that it was on course to reach its target return of 20 per cent.

The decrease in realisations in the 11 months to February comes eight months into the credit crunch that has made it difficult for many private equity companies to raise debt for leveraged buyouts.

Philip Yea, 3i chief executive, said: "Although our portfolio companies are not immune to economic cycles, to date we have seen no material changes to their overall financial performance.

"The opportunities available to our investment business are considerable, notwithstanding the deterioration in the financial markets since the turn of the year."

The fall in realisations was in line with expectations but was balanced by a steep rise in the level of money invested, up from £1.3 billion in 2007 to £2.1 billion in the 11 months to the end of February.

In addition, £600 million was invested on behalf of co-investment funds managed by 3i, up from £250 million the previous year.

Investment in growth capital, where 3i takes stakes in private growing companies, has more than doubled to £960 million as many smaller companies based in the US and the UK have looked to 3i for assistance with international expansion, particularly into China and India.

The increase in the growth capital division is in contrast to venture capital — riskier, early and late-stage technology investments — which 3i said this week that it would abandon to focus on more profitable areas.

Venture capital has been its worst-performing activity since the technology bubble burst.

The business will now be folded into 3i's growth capital unit.

Although it achieved some successes, 3i's venture capital business has shrunk steadily since it suffered about £1 billion of writedowns from the technology crash of 2000.

Simon Ball, finance director, said that the climate for raising debt was much tougher than it was nine months earlier.

However, he added that 3i's focus on mid-market and smaller investments and its dedicated in-house banking team had given it an advantage in the present environmnet.

"We have very strong banking relationships established over 60 years and not just in London but in all the local markets in which we operate," he said.

3i also announced that its India Infrastructure Fund had reached its $1 billion (£500 million) target. The fund will close finally in April and is intended to make investments in the power and transport sectors in the sub-continent.

Companies in which 3i has realised profits in the past year include Coor Service Management, the Nordic service management company. 3i sold its stake to Cinven after three years.

It has also sold its stake in Sparrowhawk Media, the owner of the Hallmark TV channel.

Other successful realisations include Cambridge Silicon Radio and Empower, the service provider for the energy and telecoms sectors in Finland and the Baltic states.

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