This article originally appeared on Forbes.com.

PE investment activity began 2013 much as it ended 2012—directionless and lacking any clear sense of forward momentum. The failure of deal activity to gain traction globally since the financial crisis has raised concerns among many industry observers that PE may be suffering from more than a cyclical slide. But as we point out in Bain & Company’s Global Private Equity Report 2013 those who assert that the experience of recent years defines a scaled-down “new normal” for the PE industry need to contend with several inconvenient facts.

For one thing, industry growth would have been far higher overall across the period had major economic upheavals not disrupted PE deal making. In 2011, the resurfacing of sovereign debt problems in Europe and the US disrupted credit markets, making it difficult to finance deals. Then in 2012, the euro zone’s slide back into recession scrambled expectations of buyers (who were reluctant to overpay) and sellers (who were loath to settle for a lower price) across Europe, making it even harder for the two sides to come to terms. To gauge the underlying health of the PE buyout market, Bain looked at how acquisitions by buyout funds compared with the far bigger number and value of corporate M&A activity in recent years. The data clearly show that the LBO market has held its own and do not suggest that there is anything structurally wrong with PE. Accounting for a steady 8% of total M&A over the past three years, buyouts enjoy a higher market share post-downturn than they did prior to the last upswing. The past few years have simply been a challenging time to do deals, regardless of who the acquirer is.

Furthermore, superficially flat buyout activity between 2010 and 2012 masks shifting regional undercurrents. Despite choppy economic conditions over the past three years, the trend line of buyouts in both North America and Asia–Pacific has increased overall—by 5% and 8% compounded annually, respectively. By contrast, Europe—the epicenter of global economic woes—saw buyout activity shrink by 11% annually over the three-year period through 2012. Indeed, Europe’s troubles and the consequent decline in deal making in that region obscured gains elsewhere in the world.

Finally, in the absence of a major economic shock, prospects are good that 2013 will be a better year than preceding ones. Beyond struggling Europe, market conditions for PE are solid. GPs are armed with plenty of dry powder that they are eager to put to work. Debt markets began 2013 far stronger than they had going into 2012, with both the cost and availability of borrowing for LBOs very favorable. Indeed, the big “open for business” sign hanging over the global debt markets is the biggest factor favoring a pick-up in PE investment activity in 2013. Investors of all sorts, from hedge funds to loan mutual funds, are hungry for yield wherever they can find it in today’s climate of sustained near-zero interest rates in the US and they are flocking to buy new debt issuances from PE borrowers. The recent surge in demand for PE debt with few or no covenants is a major shift. Meanwhile, new collateralized loan obligation (CLO) issuances revived. CLO issuance hit a post-downturn peak of some $50 billion in 2012—approximately four times the total volume for 2011—and appears to be headed far higher in 2013. Indeed, there seems to be no limit to the capital pouring into the high-yield debt markets, which means plenty of debt will be available for LBOs and at a low cost that will make more deals possible.

The PE industry’s growth since 2009, however, does not suggest that the industry will become much bigger anytime soon. Based on current trends, with European PE remaining at its 2012 level of activity and the North American and Asian PE markets continuing to grow at the same rate as they did between 2010 and 2012, the industry would expand from last year’s disclosed deal value of $186 billion to about $195 billion. But such strengthening as the PE market has seen over the past few years only hints at what 2013 could bring. Only a revival in public-to-private conversions that powered PE deal making during the last upswing could push deal activity into a much higher orbit. We will explore the prospects of that happening in our next posting.

Written by Hugh MacArthur, Graham Elton, Bill Halloran and Suvir Varma, leaders of Bain & Company’s Private Equity Group.