3i, the global private equity firm, has reported a net reduction of £1.1bn (€1.7bn) in the valuation of its portfolio for the six-month period to the end of September, and will cut 185 jobs and close seven offices in Europe.

The firm blames the portfolio's plight on falling equity markets, which caused a £430m loss for 3i's quoted investments. The market slump also affected 3i's unquoted portfolio, the value of which fell £314m, with the average price/earnings ratio dropping from 9.7 at March 31 to 7.9 at September 30, 3i said in a statement.