Private equity funder Duke Street has quietly written down its £21.4m investment in the Parabis Group in another blow to the concept of externally owned alternative business structures. 

Personal injury specialist Parabis was one of the first firms to seek external funding as an ABS, in 2012.

The Gazette understands that Duke Street took the decision to accept a loss on the stake after Parabis began to seek buyers for parts of its business, after recording falls in income and profit last year.

Mayfair-based Duke Street declined to comment. The Gazette understands the investor has not seen the profits it expected from its stake. The writing down is an indication that Duke Street rates it as unlikely it will recoup its investment.

The investment was written down in March and this was outlined to stakeholders in the summer.

The Gazette understands that Duke Street executives will remain on the board of Parabis until any sale of its different entities is completed.

Contact with Parabis was made by Duke Street in 2005 ahead of reforms that were expected to liberalise the market under the Legal Services Act 2007.

In its investment thesis at the time, Duke Street saw ‘attractive market dynamics’ and an ‘unrivalled track record of revenue and profit growth’, with a plan to drive organic growth and fund acquisitions.

In a statement to the Gazette, Parabis said: ‘It is well known that following a strategic review Parabis has been in talks with a number of like-minded businesses evaluating the best options going forward for the business and our people.

‘Those talks are continuing. As previously advised as soon as we are able to provide more information we will but until then there will be no further comment.’

According to Parabis accounts filed last December, covering the 2013/14 year ending 31 March 2014, income fell from £12.1m to £8.9m, with profits down from £8.5m to £5.1m.

Parabis Law LLP is the Solicitors Regulation Authority-regulated entity, under which sit Plexus Law, Greenwoods and Cogent Law.