But the evidence points to a cyclical rebound ahead. The top private equity firms have a solid track record of delivering large returns consistently in good times and bad. Institutional investors remain committed to allocating capital to private equity and other alternative assets, and new fundraising will recover. Indeed, some of the best funds are those that are raised and deployed in turbulent times. Moreover, private equity firms are sitting on a war chest of $1 trillion in equity capital globally. They will be ready to strike as soon as debt markets turn. Meanwhile, many private equity firms are widening their geographic reach and taking advantage of opportunities in a broader range of asset classes and industry sectors.

Global private equity report 2010

Private equity's "golden age" of low interest rates, abundant leverage, mega-deal making and effortless returns is over, but what new direction will the industry take? This report, Bain & Company's update on issues facing PE in 2010 and beyond, explains how the downturn rearranged established rules, reset expectations and planted the seeds of PE's next phase.

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In today's challenging environment, private equity, hedge fund and sovereign wealth fund investors must understand how to create real strategic and operating value within and across their portfolios, and that's where Bain & Company can help. We advise firms across the entire value-creation spectrum, from fund strategy and operations, to sector specialization, to strategic due diligence, to achieving peak value creation in portfolio companies following acquisition, to planting the seeds for portfolio companies' future growth that has become essential to successful exit planning.

Serving the U.S., European and the Asian-Pacific private equity markets, Bain's private equity consulting practice is three times larger than the next-largest firm. Bain & Company founded this type of consulting as part of the creation of what is now a separate company, Bain Capital, established in 1984 by Bain & Company partners. Since 1997, we have worked on more than 3,500 deal evaluations and 1,000 portfolio company projects. We maintain more than 400 dedicated professionals serving private equity clients on four continents and, over the past decade, have advised clients in fully half of all global deals exceeding $500 million.

Bain & Company not only helps private equity firms achieve superior returns, we are prepared to align our interests with client success. In situations where Bain has co-invested with clients, we have generated returns on invested capital that are 2.4 times higher than the industry average and squarely in the top quartile of industry returns.

To find out more about Bain's work in this capability area, please contact the practice.