Cadbury Schweppes, Mitchells & Butlers and now Virgin Media have all had ambitious strategic plans upset by indigestion in the credit markets. The pay TV and telecoms group has had to postpone its planned £11 billion auction because at least two of the potential buyers are private equity bidders that rely on copious supplies of cheap debt to make their deals stack up. With the debt tap switched off, they would have struggled to bid. With only one trade buyer known to be interested, it would have been much harder to secure a top price for the assets.

Suddenly the prospects for private equity, certainly in the short term, look less golden. Even if banks do start to extend credit to leveraged buyouts again, and the betting is that it will take three months at least, the happy days of no-strings credit like covenant-lite loans are probably gone for good. It’s no coincidence that shares in Blackstone, the biggest private equity player to float on the public markets, are trading far below their spring issue price. Kohlberg Kravis Roberts will be in no hurry now to follow.

So Morgan Stanley’s decision yesterday to announce a push into private equity in Europe and install Brian Magnus, one of its most successful investment bankers, to co-head it is a vote of confidence in the asset class.

This is not the American bank’s only late rush into a new area. Last year it elbowed its way into the hedge fund industry by snapping up stakes in alternative asset managers. John Mack, chief executive, is said to have complained that the bank under ousted chief Philip Purcell had missed the boat. Rightly or wrongly, Mr Mack is demonstrating a ballsy appetite for risk just as his peers are showing a more timid streak.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive