Lack of debt sees private equity deals reach lows

THE LEVEL of investments being made by the private equity industry plummeted by 80 per cent in the first half of the year compared to the same period last year, dropping to a 12-year low of just $24bn (&pound;14.7bn), research showed yesterday.<br /><br />The figures, by International Financial Services London (IFSL), underscore the restrictive effect of the ongoing lack of debt financing being made available by cash-strapped banks to fund deals.<br /><br />Just $189bn of private equity cash was invested in other firms globally across the whole of last year &ndash; down 40 per cent on the previous year.<br /><br />But the research shows the level of funds raised by private equity funds from their investors has fallen more modestly despite the turmoil. Last year investors put in $450m in private equity funds globally, compared to $490m in 2007.<br /><br />This represents a modest 8 per cent fall, suggesting that while big buyouts remain hard to engineer, funds are building up war-chests to fund future deals. Senior IFSL economist Marko Maslakovic said the dearth of private equity investments and the falls in funds raised will persist &ldquo;for the rest of the year&rdquo;.