Days of reckoning for private equity

Not every deal out there is blowing up. We recently noted that several in the top 10 were holding up fine. But to be fair, the private equity world is bracing for lots of pain in their portfolios. According to Business Week, we're seeing more portfolio companies defaulting on debts and entering bankruptcy court. Some think the recession has highlighted a business model that is sorely in need of change. We've discussed all this before, of course. The real issue is how, or if, the industry will be able to grow out of this trough in a world that frowns upon debt. If you can't lever up companies that are super cheap, to buy companies and pay yourself huge dividends, and if you can't easily exit investments, what are you going to do? Shrink? Stagnate?

For more:
- here's the article 

Related Articles:
Private equity news from FierceFinance