“Make poverty history. Raise management fees!”

“This may be the last fun dinner we have for some time,” was the different tack taken by Jeremy Coller, head of secondaries private equity specialist Coller Capital, addressing delegates at his sponsored dinner closing the first day’s activities at the 2008 European Private Equity and Venture Capital Association’s Investors’ Forum in Geneva.

Last year’s chief concern was the pincer movement orchestrated by a global press, US and European regulators and UK unions in hauling the private equity industry – or at least its buyout regulars – over the coals. That, and how to spend the many billions raised in what, even last March, was clearly going to be a record year for private equity fundraising.

This year, a number of fund managers privately admitted that the latter question was equally relevant, but for different reasons: the banks have shut shop, making the massive amounts of capital sat in war chests effectively redundant without the all-singing all-dancing leverage to make the returns on investment promised to the investors who provided that liquidity.

The shutting of banks looked to be permanent too, in some cases, with news of Bear Stearns’ collapse filtering through, even as the likes of former Olympic medal winner Lars Nielsen was giving a motivational speech on winning ways – Rule number 5, “Know when to say ‘no’”, would probably have been useful for investment banks at last year’s conference.

Despite the gloomy outlook in much of the business news and the occasional thousand-yard stare of some of the delegates, the atmosphere was broadly optimistic and defiant, albeit with a “let’s write off 2008 for now” approach to investing by the majority of those in front of and on the main stage.

It’s next to impossible to lose money on buyouts, said one speaker, who also found favour with the not-much-loved venture capital sector, which despite a substantial loss rate could be pulled back into the black with a couple of Facebooks and a YouTube.

Thomson Financial data show that private equity pulled its weight last year, almost matching the €71bn of investment in 2006 (and potentially exceeding it once final data are in), while returns were close to 2005 figures – still strong, if not record-breaking. Still, everyone admitted that it would be next year before we could really see where the credit had crunched.

This year might be helped, though, by Alistair Darling’s recent Budget ruling on capital gains tax, with a number of firms expected to sell their investments in the next few weeks in order to avoid the shift from 10% to 18% and the end of taper relief’. The charge to the exit may stall, however, once the new laws on CGT kick in at the beginning of April (see page opposite).

“Make poverty history. Raise management fees!” Coller’s parting gag may have met with an awkward silence – save the sound of (presumably expensive Swiss) tumbleweed blowing through the room – but it deserved better. After all, he was paying. And there might not be many free lunches for a while.