MILAN — The largest investor in private equity group Permira Advisers LLP has written down its stake in Valentino Fashion Group by more than half, confirming a report in WWD.

This story first appeared in the March 9, 2009 issue of WWD. Subscribe Today.

London-based SVG Capital Plc said Thursday the value of its investment had declined 54 percent in 2008 to 78.6 million pounds, or $111.9 million — although this includes a provision following SVG’s decision to cap its commitment to the fund. SVG wrote down its total portfolio by two thirds.

Dollar figures are converted at average exchange rates for the periods to which they refer.

Permira bought Valentino Fashion Group SpA, which owns Valentino and Hugo Boss and operates under license Marlboro Classics and M Missoni, in 2007 at the top of the market for an estimated 2.6 billion euros, or $3.55 billion.

Sources said in November the financial crisis had wiped off over 1 billion euros, or $1.26 billion, of VFG’s value. “The deal was done at crazy prices, with an optimism that doesn’t exist today,” sources told WWD at the time.

On Friday, a spokesman for Permira declined to break out the fund’s own valuation of VFG but confirmed its total portfolio fell 36 percent in 2008.

He added: “The valuations of our portfolio are a description of the world at this time. We are fundamentally long-term investors.”

SVG specified the outlook for the Valentino label was “uncertain,” despite ongoing cost initiatives and new designers Maria Grazia Chiuri and Pier Paolo Piccioli’s first couture collection being “well received” in January. Valentino chief executive officer Stefano Sassi said earlier this year the company was scaling back expansion plans to preserve cash and service 2.3 billion euros, or $2.89 billion, of debt.

SVG added that Valentino’s revenues were flat in 2008 and that profitability had been impacted by the general market slowdown and disappointing sales of former designer Alessandra Facchinetti’s collections.

In 2007, Valentino generated consolidated sales of 261 million euros, or $381.4 million.