A consortium led by financial investment specialist JC Flowers is facing potentially the largest European private equity loss on record after shareholders in distressed lender Hypo Real Estate yesterday voted to allow the German government to take the company over and squeeze minority shareholders out.

JC Flowers is set to be forced to sell a holding in the lender of about 14.7%. It acquired the stake when it led a consortium acquisition of 25% of the German bank in June last year. The consortium paid €1.1bn for the entire stake.