An Activist Alternative

Private equity firms are feeling the credit crunch, but their pain could mean opportunity for activist hedge fund managers.

The much-publicized credit crisis, which began in the U.S. subprime mortgage market and quickly spread to all corners of the globe, has had more than its share of unsuspecting victims. Private equity firms, which rely on leverage to finance deals, in particular have been hurt by the sudden unwillingness of banks to lend on any terms, let alone the favorable ones that had driven the buyout boom of recent years.

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