Where Buyout Firms Require Expertise

Looking to work for a buyout firm? Your best shot is if you've got experience in the health care sector, business support, infrastructure or logistics, or in restructuring troubled corporate debt.

That's the takeaway from Grant Thornton's latest survey of private equity executives. Almost two in three respondents (64 percent) say they're shifting toward targeting companies in defensive sectors. The health sector was cited by 55 percent, according to Reuters, while 48 percent said their busiest area is business support, infrastructure and logistics.

But a still larger majority will need some form of refinancing help. Eighty-one percent expect some of their portfolio companies to breach banking covenants, the story says. And fifty-two percent anticipate some difficulties with refinancing - meaning they could lose control of portfolio companies to banks or other creditors.

The common theme is the global economic downturn's impact on cash flow, together with the excesses of the burst bubble during which buyout firms found it all too easy to saddle their acquisitions with crippling debt loads. To attact capital for new deals, more PE executives "feel compelled to shift their focus to those sectors that are popular with the institutional investors" thanks to steady cash flow, says Mo Merali, Grant Thornton's head of private equity.