When investors are obliged to meet cash demands that they did not fully budget for, while their bonds fail to generate the cash predicted of them, a grisly situation awaits.

Now that economies seem to be stabilising, the next focus for financial institutions will be on rebuilding, and private equity has a key role to play.

Human nature only tends to question a system when it fails. For shell-shocked investors, diversification offers the best hope of finding a system that still works.

Environmental infrastructure and waste management is one area of cleantech that has seen little private equity interest so far, but new regulation in the UK has brought a wave of opportunities.

As small and medium-sized quoted companies count the cost of an ailing stock market, private equity must seize a golden opportunity to offer up a public-to-private solution.

A banking system that is still susceptible to the worst of human behaviour shows that no lessons have been learned from systemic failure.

At a time when many distressed businesses are appearing on the market, Nadim Meer (pictured) and Craig Darling of Dundas & Wilson provide important advice on how to avoid picking up a dud.

Though many lenders have closed their doors in the crippling climate, entrepreneurs should continue to believe that their product can be a success, and private equity must continue
to provide the platform for their talents.

Private equity and venture capital can be at the vanguard of the economic recovery, provided they are not hamstrung by disproportionate regulation.

Even the much-vaunted turnaround is in for a tough ride in 2009. Recession may bring opportunity, but getting the right resources in place is vital for making the best of bad times.

The economic slowdown has put control of due diligence back in private equity firms’ hands. But the accounting gene that runs through the asset class means most continue to focus on the financial at the expense of understanding management.

Following NBGI Private Equity’s acquisition of collapsed restaurant chain Smollensky’s in January, Real Deals questioned the ability of generalist houses to tackle distressed investments. Nick Gibbons of NBGI agrees that firms only prepared to tackle financial distress should stay well clear of turnarounds, but insists that for firms willing and able to take on operational challenges, opportunities are rife.

Darryl Cooke of Hill Dickinson argues that not enough focus is given to leadership in private equity, and explains the benefits of a value-added board.

Private equity returns can never be entirely immune from failures in the wider economy, especially when those failures are catastrophic.

Buyout firms who can see through the financial smokescreen need not get too down-hearted when they next visit the bank for refinancing.

As London’s AIM continues to take a battering, take-privates of disillusioned listed companies are firmly back on the agenda.

Buying a business out of administration can be very different to a traditional private equity deal. Jonathan Richards (pictured) and James Hickling of DLA Piper explain the pitfalls and the opportunities.

LPs that ploughed money into quoted private equity vehicles to attain a lowly correlated portfolio are now finding that the correlation is much closer than they thought.

Brussels is biting at private equity’s heels. The industry must revolutionise its image if it is to survive the downturn intact.

Although mid-market deal volumes will remain low, firms with funds and a strong track record will take advantage of opportunities in the year ahead

As innovation emerges from behind the shadow of cheap credit, European venture is poised for its strongest year ever.

A study of the DPI multiple since 1996 makes for grim reading, leaving LPs with some tough choices as their invested capital comes back more slowly.

As Islamic financial products become increasingly popular, Kai Schneider of Latham & Watkins explains how to make a fund Sharia-compliant.

As warranty claims become a more attractive option for clawing back cash, Nadim Meer and Mike Hawthorne of Dundas & Wilson explain how buyers and sellers will differ in their strategies.

Recent claims that the Bretton Woods agreement led to a period of unparalleled stability in world markets ignore the economic improvements that came about when it fell apart.

It is essential to set out the terms of agreement between adviser and client clearly to prevent future disputes, says Guy Wilkes of Osborne Clarke.

The appeal of venture capital is climbing in a recession. It is up to the industry to prosper
from its new-found popularity.

Conflicts of interest and a shift in the balance of power are leading to a steep decline in vendor due diligence, but it is an important process that can add great value.

As private equity holding periods lengthen, LPs may find they are no longer struggling to hit their target allocation, but struggling to meet capital calls.

After the fall of two of Wall Street’s biggest investment banks, it could be the buyout community who suffer next.

The behaviour of banks towards small companies during lean periods should give them cause to consider alternative sources of funding.

A story of Swiss misunderstanding about mezzanine debt seems a world away when considering the recent travails of UBS.

The pensions regulator isn’t quite the trigger-happy authoritarian some make it out to be, but its powers, both present and future, still demand attention.

Lee Clifford of Freeth Cartwright highlights the investment opportunities available in training companies as the market looks to consolidate.

The simple arithmetic of private equity means refinancing concerns go a lot further down the deal spectrum than anyone previously thought.

The tale of Gloria Vila should serve as a reminder that even bit players can have a big impact on LBOs during tougher economic times.

Hopes for a deluge of western-style private equity deals in China are misconceived and premature.

Private equity’s missionaries have an important lesson to preach: risk is not the same as volatility.

European GPs are increasingly adopting the US’s deal-by-deal approach to waterfall distribution. But it’s not all smooth sailing, says Stephen Sims of Macfarlanes.

Private equity firms should be applauded for trying to increase their product range – but GPs must not hedge their bets.

An on-the-ground presence is simply not necessary – there are more ways than one to access regional deal flow.

There’s simply no substitute to having a presence on the ground when it comes to sourcing, completing and exiting regional investments.

As buyout euphoria wears off, reality is starting to kick in.

Many LPs are turning to distressed specialists in search of blockbuster returns. But the investment approach required in this arena is quite different.

There aren’t the words to describe the LBO industry’s predicament. So here are some suggestions.

Transactional uncertainty and high costs have stymied the flow of small-cap take privates. A new “take-private lite” approach could turn the tap back on.

A group of Platonic decision-makers are the only cure for the venture investing malaise in Europe.

During 2007, clean tech became the leading venture sector in the US, and Europe is close behind. But where there are opportunities, there are also risks.

Josh Lerner’s private equity survey finds that the best-performing LPs favour smaller funds.

The new chief executive of the BVCA has big ambitions for the UK’s venture capital and private equity industry in 2008.

Recent innovations in French LBO financings have been brought down to earth in the aftermath of the liquidity crisis.

The recent French strikes could teach herd-like LPs a thing or two about investment.

The current competitive market, combined with the credit crunch, will make 2008 the year to run hard and early on new deals and work on those key relationships.

A new breed of debt provider is emerging to cater for private equity firms through the complete investment cycle.

For those who view infrastructure as a subset of private equity, the most interesting investment opportunities could be found in Dubai.

Despite the popularity of the new tax-transparent Reits, no hotel-focused vehicle has yet been created.

It is possible that we are only now beginning to understand the US venture model fully, because it is already “broken”.

Ashley Greenbank of Macfarlanes analyses how new UK tax rules for 2008 will affect the private equity industry.

If current buyout fund sizes become untenable, GPs will be forced to return capital or watch investors seek alternative outlets for their money.

History shows us that the current credit crisis is nothing new – and nor is the herd mentality of banks in reaction to it.

The future winners will be those who own and effectively manage intellectual property.

Increasing a company’s worth requires more than cold analysis.
The 21st-century boardroom needs creative thinking to succeed.

There is no rational reason why the US sub-prime mortgage crisis should lead to widespread defaults on European corporate debt.

Europe’s seed capital market might want more support from LPs, but VCs need to get their offering right first.

Today’s financial age has become a period of unbridled excess, with accepted risk soaring out of proportion to possible reward.

KKR’s commitment to press on with its takeover of Boots, despite trustee concerns about pension fund liabilities, may well set the tone for future bids.

While “hard” issues are often the top priority for private equity firms undertaking a buyout, the disruptive impact on a company’s workforce should be carefully handled.

The evidence is clear: private equity should be in every investor’s portfolio. So why do so many deny that the figures add up?

InnovationsKapital recently made 80 times its money on a trade sale. So why are international LPs not fighting to invest?

The announcement by Standard & Poor’s of a new investable private equity index is an interesting development and could be yet another nail in the coffin of the traditional private equity model or, at least, in its universality. It is also perhaps a sign of private equity falling victim...

The recent IPO of Fortress has thrown into prominence the new role being played by quoted vehicles across the whole private equity spectrum.

Received wisdom – and usually the advice from the financial advisory community – is that when you are looking to exit a portfolio company, the best means of maximising value is to go through an auction.

In recent weeks the private equity industry has once again found itself on the receiving end of criticism. But Peter Linthwaite says this presents an opportunity to champion the benefits of the asset class.

It may not seem immediately obvious that the Greek city states in the 6th century BC have anything in common with private equity firms today, but it may be that they form an appropriate image for the two different extremes of partnership dynamics.