In a letter to investors seen by the Daily Telegraph, Guy Hands of the Terra Firma group warned that the credit crunch will impact heavily on the sector, and that what deals that did get financing would be subject to long delays.
It said: "The days of simply buying a good company, financing it well and enjoying a great return are over. The debt simply will not be there.
"No longer will we put deals together in a few weeks; they will take months and possibly years. Banks have become much more reluctant lenders and it will take time for vendors to reduce their price expectations."
Mr Hands' sentiments were echoed by Nick Ferguson, founder of private equity group SVG Capital, who noted that banks' moves to tighten lending conditions will impact heavily on buyout deals in future.
He said: "Since June conditions in the financial markets have change and there has been a repriciing of risk in the credit markets.
"We expect a much quieter period for the next 12 months."