The number of specialist investment managers in the European leveraged loan markets is set to drop almost as quickly as it grew, with up to 20 per cent of firms expected to disappear over the next three years, according to Fitch Ratings.

The boom in the leveraged loan market and its role in funding a wave of private equity buy-out deals in the two years before the credit crunch was only possible because of an influx of managers of structured funds called collateralised loan obligations.