Between 20% and 40% of private equity firms are expected to fail due to the current financial turmoil and deepening economic crisis, according to a management consultant and Spanish business school, in one of the most pessimistic reports about the industry's future so far.

Professor Heinrich Liechtenstein, of Spain's IESE Business School, and Heino Meerkatt, a Munich-based senior partner and private equity expert at Boston Consulting Group, predicted that around a third (30%) of private equity firms should survive, but that the future was more bleak for the other companies.