What impact has the credit crunch had on private equity?
Having worked through six economic downturns since 1978, private equity has the ability to respond to changing market conditions. As a result of the credit crunch, strained banks no longer lend money like they have in the past. With this shortage of capital, large deals have become scarce. Because private equity is an incredibly flexible industry, it has the ability to respond to the rapidly changing market conditions. Private equity specialises in long-term investments, making it a growing player in what has become an increasingly uncertain economic environment.
