Starved of credit, and facing a lack of deals and a new bout of indignation over executive pay, the private equity sector has one solace: returns continue to be better than those in stock markets.
Buy-out houses, which make a living buying and selling companies for profit, have agreed some $15.2 billion of deals so far in 2012, down 28 percent on last year.
They have found it hard to raise debt to fund deals, the fuel that drives the industry, and it is equally challenging to sell companies on the stock market, or to other large corporate rivals, who are sitting tight on their cash reserves.
But when the industry gets together in a plush hotel in historic heart of German capital Berlin, it can at least point to returns of 11.5 percent in 2011, compared with a drop in global median total equity returns of 3.7 percent, according to data from Wilshire Trust Universe Comparison Service.
It may be significantly lower than the 20 percent plus annualised returns that private equity firms usually target but it has been enough to satisfy many investors who typically look for them to outperform equities by 300 to 500 basis points.
The returns that this asset class has generated for our pension fund are superior to other asset classes, said Jane Rowe, senior vice president at Ontario Teachers Pension Plan last month.
It marked a rare intervention by one of the world's largest private equity investors as the industry faced political and public vilification over claims of job cutting and asset stripping.
The real measure of success for private equity and its investors is the cash that flows into their accounts when companies are sold. That drives returns and fills executive bonus pots.
That tap is dripping, not flowing, but large businesses are attracting global attention. CVC's brewing business in Central and Eastern Europe, which has Czech beer Staropramen at its heart, has drawn the world's largest brewers including AB InBev and Japanese groups like Asahi <2502.T> and Suntory .
Returning confidence in global stock markets and a more stable outlook for the euro zone, combined with an improvement in debt markets, for now at least, may herald an increase in private equity deals.
Equity markets are healthy and that instills confidence. said one banker who advises private equity firms on deals.
It has not been a lack of capital that has hampered buyouts in recent months, as private equity firms sit on some $370 billion for deals, according to data firm Preqin, but an inability to access debt at the right prices.
The $15.2 billion of deals agreed so far in 2012 is about a fifth of what private equity firms inked in the same period of 2007, according to Thomson Reuters data.
The capital and the appetite for lending and underwriting loans by the large investment banks is coming back, the banker said. But others are disappointed dealmaking has not picked up more quickly.
Given the uptick in public markets, it's a little bit quieter than we were hoping, said a second banker who advises private equity firms on deals in Europe.
Buyout firms and their advisers will have to sit on their hands a little longer, as confidence and appetite for risk filters through into the lending markets that grease the wheels and make buyouts work.
But as one cloud lifts another sweeps in.
Politicians and commentators are turning a spotlight on the industry's activities and the compensation of its leading figures, drawn by Bain Capital founder Mitt Romney and his bid to become the next President of the United States.
IN THE SPOTLIGHT
Buyout firms and their leading executives are used to navigating choppy markets and have experience of coming under fierce attack from critics, who have dubbed them locusts and asset strippers.
As hundreds congregate for the annual SuperReturn conference, attention will focus on how they fend off unwanted scrutiny and counter sometimes vicious attacks.
The signs, at least, are that the public pension funds, endowments and sovereign wealth funds that back the private equity groups are still providing funds to the biggest and best performers.
BC Partners last week said it had raised 6.5 billion euros for its latest buyout fund, more than it originally expected.
That will give heart to the many firms that are following, such as Apax , Permira and Cinven , all looking to raise multi-billion euro pools of capital, now joined by Advent International, which is looking to raise 7 billion euros for deals, people familiar with the situation said.
But cautious investors are taking longer to make decisions.
The process for BC Partners took some 18 months from the point of issuing documents to potential investors. Blackstone , meanwhile, has taken four years to raise about $16 billion for its latest buyout fund.
Fundraising was very difficult and much more complicated than in the past. It never took so long to close a fund, said Stefan Zuschke, German country head for BC Partners.
(additional reporting by Philipp Halstrick, editing by Mark Potter)