Remember that quaint artefact of the boom, the leveraged buy-out? One in every 50 mergers and acquisitions deals so far this year has been led by a financial sponsor, according to Dealogic. In 2006, when credit ran free and easy, the ratio was almost a fifth.

In many ways, private equity is coming full circle. For much of its history the industry has focused on supplying companies with growth capital rather than buying them with borrowed money; its share of M&A averaged just over 3 per cent in the latter half of the past decade. Fundraising trends now suggest a return to something like normality.

In Asia, a hotspot, four-fifths of the $6.1bn raised so far this year has gone into non-buy-out focused funds, according to the Center for Asia Private Equity Research. Take Carlyle, the US private Equity firm. Carlyle has just raised $1bn for a fourth fund to take minority stakes in closely held companies in China and India. The general partner has always used “no leverage” as an explicit selling point; this time that pledge helped it to raise 50 per cent more cash than its third fund.

The excesses of recent years will not be easily unwound. Preqin estimates that funds are sitting on at least $400bn of cash committed but not invested. How it is spent will cause friction. In the absence of leverage to trump cash-rich trade buyers, general partners may take minority stakes or buy back debt instead, but their investors won’t necessarily like stakebuilding. Coller Capital, the biggest buyer of second-hand stakes in private equity funds, reckons a 10th of limited partners will default on their commitments in the next two years.

There is life still in the buy-out: witness Kohlberg Kravis Roberts’ Oriental Brewery deal in Korea or the interest shown in AIG’s Taiwan assets. But it is telling that the biggest operators are accelerating their push into other areas such as mezzanine loans, property and infrastructure. The branding shift from buy-out shops to “alternative asset managers” began years ago. They know a bull-market phenomenon when they see one

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