Shares in Sigma Capital plunged 13% after the investment company announced big write-downs in the value of its portfolio wiping even more off the value of Sir Tom Hunter�s stake in the business.

Shares in Sigma Capital plunged 13% after the investment company announced big write-downs in the value of its portfolio wiping even more off the value of Sir Tom Hunter's stake in the business.

Edinburgh-based Sigma said it would provide £1.1m against investments and bad debts for the year to December in a move that is likely to plunge the company into the red.

In a trading update, Sigma said it expected to record a pre-tax loss of approximately £500,000 for the year.

Directors said the write- downs reflected the belief that it was prudent to take an "extremely cautious" view of the valuations within the company's portfolio. This includes investments in potential high growth firms.

As the company had only recorded £311,000 in respect of write-downs and bad debts in the first half the update points to a significant worsen- ing in conditions in recent months.

Following the announcement shares in Sigma Capital fell 1.5p to a new low of 10.5p. That gave the AIM-listed firm a market capitalisation of around £5m.

By contrast, the West Coast Capital investment business owned by Sir Tom Hunter paid 50p a share when it acquired a 20% stake in Sigma in June 2007 for around £4.3m. The investment was made to gain exposure to Sigma's investments in renewable energy.

At yesterday's closing price the Ayrshireman's holding had a paper value of around £1m.

Hunter has seen the value of investments that he made in much bigger businesses like housebuilder Crest Nicholson tumble in recent months.

In the case of Sigma he may take solace from the fact that the company did not write down any of the investments it had made in clean technologies including renewable energy.

The write-downs were largely in respect of historic investments in firms developing other forms of technology.

Yesterday, the company said it had won an additional £4.4m capital commitment to its flagship Sigma Sustainable Energy Fund II in an apparent sign of investor confidence.