London-based private-equity firm Candover Investments wants to slash the amount of money it committed to its newest buyout fund as recently as six months ago because of the credit crunch.

Candover put up €1 billion (£886 million) of the €3 billion promised to its Candover 2008 Fund. The total raised last year was far lower than the €5 billion originally targeted, but now Candover wants to cut its commitment significantly.

It is understood that means reducing its pledge to the fund by at least half and probably as much as 75%, or €750 million. Fellow investors in the fund, mainly offshoots of large fund and wealth managers, are likely to be offered the chance to cut their commitments by an equal amount.

Sources said Candover, which announces its full-year results in a couple of weeks, is likely along with most private-equity investors to have seen a sharp fall in asset values in the past 12 months. Its major investments include leisure group Gala Coral, yacht builder Ferretti and Aspen Insurance.

Although Candover will end the year with cash in the bank, its falling net asset value will effectively stop it using any of its borrowing facilities, and so prevent the kind of leveraging that private-equity firms use to increase their returns. At the same time, the chances of Candover realising current investments by selling or floating them are very low.

Its last major sale of an investment was in summer 2007. Private-equity firms depend on cash made from selling earlier investments to fund new deals. But the credit crunch has seen both ends of the process dry up.