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PRINT THIS PAGE New research: most private equity groups take less debt than banks offer20/10/2005. Source: AltAssets. 
 A total of 90 per cent of private equity groups are taking less debt than banks are offering them, according to new research from Close Brothers Corporate Finance.
While 74 per cent of the surveyed private equity groups expect some degree of deflation in the debt markets, over a quarter believe the shift in the debt markets over the past two years is here to stay.
Mark Barrow, head of private equity coverage at Close Brothers, said, 'The traditional risk-takers, private equity funds, are now turning down what they perceive as excessively risky debt packages in favour of a level of debt that gives a company room to breathe. The buoyant debt markets have given rise to a situation where lenders are taking equity risk.
'It is revealing that a significant minority of groups believe that there has been a permanent shift in the debt markets, underpinned by a low interest, low inflation environment. However, private equity groups are nervous about the debt that is being offered. These mixed signals show we are approaching a point of inflection where it could go either way.'
Close Brothers questioned 30 per sent of UK-based mid-market private equity groups, based on 100 groups in this space.
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