A sharp rise in defaults ­forecast among risky ­leveraged loans – which are used to fund private equity buy-out deals – is putting extra pressure on the ­complex investment funds that came to dominate the market at its peak, ­according to analysts.

Collateralised loan obligations (CLOs), which issue differently rated bonds backed by a pool of leveraged loans, have already been weakened by the accelerating decline in the credit quality of their portfolios.