Brave new world

With the LBO bubble bursting, the future world of private equity is likely to be very different from the heady conditions of recent years. Here are six predictions of what that brave new world will look like. First, when the current credit crunch ends, liquidity won’t ooze back on the same terms. LBO houses have been pretty much able to dictate conditions to borrowers. The recent past was characterised by extremely high debt multiples, «covenant-lite loans» and so-called «PIK toggles» where the...