They say nobody rings a bell at the top of the market, but the initial public offering of private equity firm Blackstone in June 2007 served that role almost perfectly. The era of bountiful credit began to unravel a matter of weeks after the kings of private equity partially cashed out. Today’s valuation, down 85 per cent, is water under the bridge, but its listing, along with a partial one by Kohlberg Kravis Roberts, has at least given the rest of the world a window into how leveraged buy-outs are faring. The picture is not pretty.

Blackstone posted a loss of $1.16bn for 2008 and marked down private equity and real estate holdings by 20-30 per cent, on top of earlier writedowns. Heavily indebted holdings such as Hilton Hotels and Freescale Semiconductor will struggle to service debts. Likewise, KKR’s European listed vehicle also saw nothing but red ink. It slashed valuations by 48 per cent as companies such as First Data, Alliance Boots and ProSiebenSat struggled. The picture will be the same for many deals done by still private competitors, particularly the most aggressive 2006 and 2007 vintage.