In another sign that private equity is reaching the top of its cycle US groups have launched a record $82bn worth of bids already this month. See the FT this morning.
This frenzy is being fuelled by buoyant credit markets in a combination that can’t go on forever. Funds are increasingly going it alone as well, abandoing the traditional “club deals”.
When the cycle turns it will do so quietly. We will simply see declining deal volumes and the shift won’t happen quickly – deal cycles are too long for that (witness the time it took the VC industry to adjust when our bubble burst in 2000). And when companies run into trouble we won’t hear much about it – I predict there will be lots of restructurings behind the scenes and the full story will only emerge when funds report their results.