Investment firm Graphite Enterprise Trust said it had been dealt a “serious blow” by the collapse of Independent Insurance.

While its unquoted investment portfolio rose by 4.1% in value over the past half-year, its quoted investment portfolio fell by 32% – more than half of which was attributable to Independent.

The investment group's holding in Independent was worth £16.9m at the beginning of the year, when shares in the insurer were trading at 398p.

But in June, Independent's shares were suspended at 81p and, a week later, provisional liquidators were appointed.

A Graphite spokesman said: “It became clear that the shares almost certainly had no value and we have made a full provision against the investment. No clear account of what went wrong has yet been issued. Our initial advice suggests we are unlikely to make any recovery.”

Figures for the half-year to June 30 show that shareholders' funds dropped by 12.5% to £271.3m