Back in late September, when David Bonderman lost $7bn on an investment in Washington Mutual bank made by a private equity consortium headed by his firm TPG, a senior executive at a rival house sent him a sympathetic note. Both the industry and the world needed a reminder that private equity was not infallible, he argued. Before that time, "we made it look too easy", this executive added.

Today, nobody could say that private equity needs any further reminders of how vulnerable both their investments and their own fortunes have become. The public vehicles set up by a few of the larger houses most clearly depict the carnage. The value of investments in the Amsterdam listed unit of Kohlberg Kravis Roberts dropped 47.5 per cent last year, while the private equity investments of Blackstone were worth 30 per cent less.

In Europe, Candover this week cut the valuation of its portfolio by half, writing down a third of its investments to zero, including Gala Coral, the UK's biggest bingo group, and Ferretti, an ailing Italian yachtmaker. The rival Permira wrote down its portfolio by 36 per cent, valuing five companies at zero. Terra Firma, run by financier Guy Hands, has taken an impairment provision for half its €2.6bn ($3.3bn, ￡2.3bn) investment in EMI, the music group that was one of the final buy-outs of the credit boom, as it wrote down its entire portfolio by 45 per cent.