Shares of 3i Group declined following reports of slower growth at Action, the European discount retailer that represents a significant portion of the private equity firm's portfolio value.

Action, which operates discount stores across Europe, reported a deceleration in sales growth compared to previous periods. The retailer has been a key investment for 3i Group and accounts for the majority of the firm's portfolio valuation.

3i Group also reported weaker profitability metrics at Action during the period. The performance update prompted investor concerns about the discount retailer's ability to maintain its previous growth trajectory.

The decline in 3i's share price reflects the market's reaction to the softer performance at one of the private equity firm's most valuable holdings. Action's results are closely watched by investors given its outsized impact on 3i's overall portfolio returns.

Action operates hundreds of discount retail locations across multiple European markets, selling a range of consumer goods at low prices. The chain has been expanding its footprint in recent years as part of 3i's investment strategy.