Critics of the private equity industry often point to its aggressive use of leverage, and there is no shortage of struggling companies to cite as examples of the perils of over-gearing. But if you thought the industry had gone cold-turkey when it comes to gearing, a new report suggests otherwise, at least on one side of the Atlantic. It bodes ill for the future.
A report this week showed a pronounced trend in buyout financing. Debt-to-enterprise value multiples for buyouts were on a marked downward trajectory in Europe. The problem? On the other side of the Atlantic, the exact opposite has been occurring.
In the US, according to the report from data provider CEPRES, median equity/EV has fallen from 0.40
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