Most private equity firm managers say the credit crisis has ended or will be over by the second half of next year, according to the “Private Equity in 2010” research report from the accounting and professional services firm Rothstein Kass, in New York.

The survey found one-third of private equity firm managers believe the credit crisis was resolved in 2009, and another 10 percent predicted market weakness will dissipate before the second half of this year. In total, more than 80 percent of private equity professionals surveyed said the credit crisis has ended or will conclude before the second half of 2011.

The survey contacted 199 private equity firms during the first half of 2010. Roughly 60 percent of survey participants reported assets under management of less than $50 million, with the balance reporting $50 million or more.

Tom Angell, head of the Rothstein Kass private equity practice, said, “Even during the worst of the credit crisis, many private equity firms maintained ample capital for deployment, but most found it extremely difficult to complete deals. At the same time, mounting liquidity concerns compelled many business owners to pursue a potential sale. In many instances, discrepancies between the owner’s perceived value and the price that potential acquirers would pay kept private equity capital on the sidelines. With lending again less restricted, this gap has started to narrow, leading to renewed activity.”

Angell said observers are looking for “news of the next megadeal as a potential harbinger of better days ahead. However, activity among small and midsized private equity funds is perhaps a better measure of the sector's improving health, and could indicate the start of a sustained recovery.”

E-mail to bfitzgerald@njbiz.com