UBS has written down half of its private equity portfolio over two years and warns more is to come as its late 1990s investment binge continues to cause headaches.

The firm blames its Sfr2.8bn (€1.9bn) losses on the poor economic conditions and limited exit opportunities that have affected the entire private equity industry. But Dominique Peninon, managing partner of Access Capital Partners, a fund of private equity funds manager with more than €500m ($538m) under management, says: "They have burnt their money quickly."