Debt investors are predicting a recovery in acquisition finance activity on small and mid-cap buyouts this year, as private equity firms increasingly look to the high-yield bond market to provide financing for larger deals.

Research from law firm DLA Piper says that 41% of acquisition finance investors in Europe found that activity in the acquisition finance markets exceeded their expectations in 2010 and 84% predict either a slight increase in activity or a consistent pace of recovery in 2011.