The market for private equity has all but dried up and billions of dollars worth of deals have been left hanging.

Yet in the midst of it all, CCMP, the former JPMorgan buyout arm, has closed a new, $3.5 billion (£1.7 billion) buyout fund. Blackstone, too, managed to close the world’s biggest ever buyout fund, at $21 billion. Apollo and Carlyle are out there raising new money. KKR is also set to market its new European fund.

Why would any pension fund in their right mind want to be exposed to private equity today?

The golden age of private equity may well be over. A host of pending deals will be either renegotiated or collapse. There will be consolidation in the buyout sector.

But the private equity model is here to stay. Risk will be repriced. As the cost of borrowing goes up, the price of many assets will come down.

The buyout business - the alignment of ownership and management and the reliance on debt - will go on.

Despite the chaos, the pain that has emerged so far in the private equity sector has not been in the core business, but in parts of the empires most people had never even heard of.

Take KKR. It was involved in the lion’s share of all the big deals this year, including TXU Corp, First Data and Alliance Boots. Yet it was KKR Financial, a little-known investment vehicle that bought up mortgage-backed securities, that has suffered the brunt of the troubles. And it was Carlyle Capital, not The Carlyle Group, which was at the centre of the buyout firm’s credit crunch woes.

If the buyout firms learn one thing from this crisis, surely it is to beware the dangers of diversification. The buyout kings would not be the first victims of imperial overreach.

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