With the financial crisis continuing to wreak havoc in many of the world's economies, access to capital is becoming harder and dearer. Despite heavy injections of liquidity from governments, lending has slowed to a trickle across most industries and markets. Bankers' reluctance to offer finance stems from widespread uncertainty about the length, intensity and consequences of the current crisis. This poses significant challenges to the private-equity industry, which has enjoyed unprecedented growth over the past decade thanks partly to unfettered access to cheap credit. Private-equity firms are likely to feel the impact of tighter lending terms both at the level of their deal ß ow, and in their ability to manage the companies they have acquired. This is a market context that will require discipline, judicious planning and innovation from private-equity practitioners if they are to survive the financial crunch and emerge stronger.
In order to assess the outlook for private-equity markets, and to identify the strategies private-equity firms are likely to pursue to weather the economic downturn, the Economist Intelligence Unit surveyed 222 executives from this industry in September-October 2008.
