Terra Firma, the buy-out house run by financier Guy Hands, has written off half its €2.6bn (£2.3bn) investment in EMI, the music group, accepting the likelihood of losses on one of the most eye-catching deals struck during the credit bubble.

EMI accounted for the lion’s share of a €1.37bn impairment charge in Terra Firma’s annual review, which it published on Monday. It contributed to a writedown of 45.5 per cent on the buy-out house’s entire portfolio.