The new buy-out: how the financial crisis is changing private equityp

In late 2008, Leon Black declared, "traditional private equity is dead," and signaled that his firm, Apollo Management, would seek investment returns in the credit markets during the coming years. For Black, who has a successful track record in distressed debt investments, the debt market offered an obvious opportunity after plunging to its lowest trading levels in history in the wake of the financial crisis. Also, his prediction of a moratorium on large-scale "traditional" leveraged buyouts has largely been fulfilled. But the events of the past year have shown that private equity is not dead. It is, however, meaningfully different. It has evolved to adapt to the new economic environment, or new world, created by the financial crisis.