3i Group reported strong investment performance for the first six months but issued a cautious outlook for the rest of 2025. Shares fell by almost a quarter in five days, prompting CEO Simon Borrows to buy £1 million of shares after the selloff. The company’s market capitalization dropped by 20% in the last five days, wiping £10 billion from its value.

3i’s success is heavily dependent on its largest holding, European discount retailer Action. The company flagged concerns over softening trading conditions in France, which could impact sales growth. Analysts noted that the upcoming holiday period is crucial for the retailer’s performance and long-term market sentiment. The update from 3i was considered slightly below expectations by AJ Bell investment director.

Despite recent challenges, 3i has been the best-performing investment trust in the UK over the past decade and one of the top FTSE 100 stocks in the last three years. The company’s share price has experienced significant growth over various time frames, with a recent decline of around 10% in the year to date. CEO Borrows purchased 30,000 ordinary shares worth over £1 million.

In the past six months, 3i’s gross investment return grew to £3.41 billion, with a 13% increase in total return. The company also announced an increase in its interim dividend and highlighted strong performance in its infrastructure portfolio. Analysts have adjusted down the target price for 3i post-financial report release, with one broker issuing a sell recommendation. The average target price for the trust is £45.04.

Read more at Morningstar: Shares in Top Performer 3i Lose 20% on Cautious Outlook