Corporate America’s listed presence on US stock markets is shrinking at a record pace as the burgeoning private equity industry delists companies and other groups buy back their shares to placate investors.

American figures analysed by Lombard Street Research, the London consultancy, highlight how the scrapping of equity issued by US-listed firms reached its highest level as a proportion of national income in the fourth quarter of last year (Q4).

The net amount of equity withdrawn from the market by firms outside the financial sector climbed to the annual equivalent of $700 billion (£357 billion) in Q4 — 5.2 per cent of US GDP.

Until last year, so-called “equity retirement” — scrapping shares as a result of buybacks, private equity deals and other takeovers — had significantly exceeded 3 per cent of national income for only a brief period at the time of the 1998 financial crisis triggered by the near-collapse and bailout of the LTCM hedge fund.

The scale of the delisting and equity retirement trend is underlined by separate data also highlighted by Lombard Street’s Charles Dumas, which shows soaring growth in corporate borrowing as private equity groups use heavy leverage to delist companies and gear-up their balance sheets.

The annual growth rate of borrowing by nonfinancial companies surged to about 11 per cent in the fourth quarter, up from zero just three years ago. Combining delistings and buybacks with net dividend payouts, corporate America paid out the annual equivalent of £1,100 billion in cash to shareholders in the fourth quarter. These large payouts ought to justify generous share valuations, Mr Dumas argued.

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