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Now's not the time to be a leveraged financier: the credit crunch is snuffing out recruitment.

With private equity activity slowing to a trickle, recruiters say the most active banks in leveraged finance in Australia have effectively pulled down the shutters on new hirings.

"It's pretty much ground to a halt given the fluctuations in the credit market in the US," says Oliver Darkes of Carmichael Fisher. "The traditional big players in that business are not interested in talking to people about hiring right now.

"I've recently had a very senior candidate that I've been marketing to the leveraged finance businesses and none of them are interested."

In terms of headcount, the biggest leveraged finance operator in Australia is Bank of Scotland International, with a team of about 30. The other bigger players are Macquarie Bank, UBS and Deutsche Bank. All are understood to have put hiring plans are on hold for now.

One exception to the trend has been Société Générale, which has just established a Sydney-based three-person leveraged finance team, hiring from Barclays Capital, ANZ and Italian M&A boutique Banca Leonardo.

Darkes says Soc Gen had been looking to do that for some time. "When they started to do that the market was very buoyant, and the thing is you commit to the process hoping it's just a glitch."

It may prove more of a long term rout, however. Luke Heath, chief executive of Chandler Heath, says leveraged finance is strongly correlated with private equity. "The number of transactions that are occurring are less and, in general, with the tightening of credit conditions within banks and the expansion of spreads … recruitment is just subdued at the moment."