The Impending Fight for Private Equity Buyout Lending

A battle is looming over private equity buyout financing.

After nearly a year on the sidelines, Wall Street banks are beginning to lend to private equity firms again for their buyout deals. Meanwhile, the direct lenders that stepped in to finance buyouts while the banks were absent—oftentimes PE firms themselves—are ratcheting up the amount of money they’re willing to lend for such deals.

Apollo Global Management, for example, has recently told clients and advisers it is capable of providing a bigger slice of financing for buyout deals worth as much as $5 billion to $7 billion in total, up from the $1 billion to $2 billion deals it previously sought to participate in, according to people familiar with the matter.