What goes up must come down. It’s a rule of science that may soon need to be applied to the world of private equity.

The industry is certainly on the up. Pension funds and other investors have been increasing their allocations to private equity for years. This is understandable given buyout funds generated such good returns in the years following the financial crisis. And with sentiment so good, firms are taking advantage. PAI Partners put a €5bn cap on its latest fundraising, it emerged last week, and Bridgepoint Advisers is talking to investors about raising the same amount. Even Terra Firma, which has had a disastrous decade, is attempting to raise £3bn.