British private-equity firm 3i Group has closed its Dublin office, citing the general economic downturn and the slower-than-expected development of the private-equity market in the Republic.

The closure of 3i Group's Irish office - which was set up in July 2001 - reflects a sharp fall in the value of private-equity investment in the Republic.

It also follows a difficult period for 3i Group, which last week wrote down the value of its technology investments by £360 million sterling (€523 million).

The group, which has invested £15 billion in global businesses since its foundation more than 50 years ago, said yesterday it would monitor the local situation to assess any other future Irish investment opportunities.

But the closure of the British group's Dublin office just a year and a half after opening is likely to make it circumspect about the Irish market.

The group was also forced to close a former Dublin office during the 1980s due to a similar lack of business activity.

Mr Clive Austin, head of 3i's Irish operations, said in the near term the group did not see sufficient activity in the market to support a dedicated local presence. He said he would continue to have ultimate responsibility for the Republic but would now move back in Britain.

The group made just two investments in the Republic, worth a couple of a million euro, since it opened its Irish office in July 2001. These investments were in Giraffe Early Learning and New Court, an outsourcing company.

Mr Austin said the firm would maintain its support for these companies. He also said the Irish private-equity market would develop in time and it was a question of how long this development would take.