Candover pulls plug on £2.7bn buyout fund

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The move, which has sent shock waves around the City, is symptomatic of a widespread malaise in the once high-flying, money-minting private-equity industry.

Candover, based opposite the Old Bailey, is best known as the backer of the struggling Gala Coral casinos and bookmaking group from a previous fund.

Today it said it is terminating its 2008 fund whose sole outstanding investment is in the Expro oil and gas services company. It comes amid reports that Candover's once-burgeoning dealmaking team has been cut from 100 to about 40 and that it has closed offices in eastern Europe and Asia.

The fund has been in trouble ever since its quoted arm Candover Investment did not back it with an expected 1 billion investment this year.

Mark Spinner, a private-equity expert at lawyers Eversheds, said: "This news is indicative of what is happening in the bigger end of the buyout market. Traditionally the bigger buyout funds have relied upon the availability of significant amounts of reasonably cheap debt, debt that is just not available at this time. This makes deals at the top end much more difficult to structure and close."