Bear Stearns’ sale to JP Morgan has come as a blow to private equity bankers, who were counting on the fallen bank to provide greater liquidity to the European buyout market as part of its expansion plans this year.

Although Bear Stearns was much bigger in the US financial sponsors and private equity mid-market, it had been looking to expand in Europe and increase its overall staffing from 1,300 last year to about 2,000 by 2009. The bank hired Mark Goldstein as co-head of European investment banking last May and appointed Michel Pérétié as Bear Stearns' first European chief executive in September 2006.