Quote’’ - Peter Cornelius, Head of Research at AlpInvest Partners

‘Even if default rates go up, they will be nowhere near the levels seen previously,’ said Peter Cornelius this morning at the Benelux unquote" Private Equity Congress in Luxembourg. He explained that in the early 1990s and in 2001 default rates hit the double digits ‘but it is not like that this time.’ He presented figures from a Goldman Sachs survey that illustrated the decreasing dependency on debt and increasing reliance on margin improvement for returns: in the 1980s over half the a private equity deal’s return was driven by leverage, but this shrunk to a third in the 1990s and was only a quarter from 2001-2003. Over the same time period the reliance on margin improvement increased from under a fifth in the 1980s to over a third between 2001-2003. ‘A happy slowdown is the most probable outcome.’