Consultants and private equity groups have always worked closely together. But now, as the economy turns down and markets have seized up, the two are finding their relationship is changing.

Private equity is being squeezed from both ends, according to Charlie Simpson, a corporate strategy specialist at PA Consulting Group, and the result is not pretty for the industry. Groups’ ability to raise new funds has fallen off as banks tighten their lending standards, meaning new buy-outs are a struggle. At the exit end of the business, where they sell their investments, the market to buy these has also dried up.