Competition for European mid-market assets is set to fall as constraints on financing force trade buyers to revise down bid prices, potentially handing a boost to private equity firms, according to new research.

Trade buyers are finding it more difficult to pay for acquisitions amid the credit crunch and are “inclined to limit their acquisition prices in order to avoid dilution of their own shareholders,” according to a report by Argos Soditic, a Swiss mid-market buyout group.