Although private equity firms have been talking about investing in distressed assets for some time, there has been little action until recently. TPG’s $2 billion investment in Washington Mutual, the troubled American lender, comes amid signs that other private equity firms are dipping toes into the water. This week Carlyle unveiled a $1.35 billion fund for “distressed debt and corporate opportunities”. Apollo, Blackstone and Texas Pacific are near to buying $12 billion of leveraged debt from Citigroup. Och-Ziff and Oaktree are waiting in the wings, ready to pounce on businesses on the skids. Private equity may have been temporarily grounded by the credit crunch but with billions of dollars to spend they won’t stay on the sidelines for long.

david.wighton@thetimes.co.uk

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