The credit crunch has now ripped hard into 3i, the granddaddy of the British venture capital scene admitted today.

And its boss said that things have worsened since the first stock market crashes in September and are going to get even worse.

The performance of 3i in the six months to end-September gave some indication of why its shares have halved over the last year and worsened still further today with a fall of 58p to 533p.

Realisation of proceeds from cashing in its stakes in companies - the lifeblood of continuing investment by 3i - fell 43% to £597 million.

New investments in the period were pegged back to £668 million, down by some 46% from the amount that was pumped into ventures in the same period in 2007.

Profits from those disposals of investments were £190 million against £337 million last time.

Worse, the much-reduced gains were vastly offset by a £411 million mark-down in the value of its continuing portfolio.

With other adjustments, that saw 3i's total returns post a deficit of £182 million against a return of £512 million last time - a 4.5% negative return against a positive return of 12% and compared to the long-term annual averaged-out target for 3i of 20%. Asked whether that performance is as bad as any performance that has been recorded in 3i's past, the chief executive Philip Yea gave a very bleak response.

"When was the last time you saw a 24% collapse in the stock market? The credit and stock markets have deteriorated since last September and the outlook for the global economy continues to weaken," he said.

"We expect a more challenging second half as the squeeze in credit markets persists, the economic slowdown affects portfolio earnings and mergers & acquisitions markets remain subdued."

Asked if big interest rate cuts by the Bank of England would help, Yea said: "Anything the authorities can do to soften the hard landing has to be welcome but the issue at the moment is not the cost of credit but the availability of credit. What we need is greater availability of credit."

The chairman of 3i, Baroness Sarah Hogg, warned of the effect for shareholders.

"It is clear there has been a further deterioration in economic conditions since 30 September, reflected in equity markets, and we must expect this to have a more significant effect on returns in the second half of the year," she said.

"In these circumstances, 3i's management is rightly taking a cautious approach to investment and focusing on the effective management of our substantial portfolio."

The 3i portfolio currently stands just shy of £10 billion with a net asset value per share of £10.19 - showing that the shares are now trading at a discount of nearly 50%.