3i Group, the former powerhouse of Europe's venture capital industry, is abandoning early-stage investment in start-up companies, its worst-performing activity since the technology bubble burst, to focus on -buy-outs, growth capital and infrastructure.

The move underlines the woeful state of European venture capital. It has consistently underperformed other parts of the private equity market, which includes big leveraged buy-outs, mid-market deals and growth capital.