When the credit turmoil clears is anyone’s guess. 

“It’s like asking what the weather’s going to be a year from now,” said Oak Hill Capital Partners’ Steven Gruber in a panel discussion at a conference called Buyouts East in New York on Wednesday. “This may be one of the bad hurricanes but the world will recover — it’s a question of how long.”

While banks try and clear the backlog of leveraged buyout debt, the question of how deals are getting arranged and funded in the meantime is left to be answered. From a sponsors perspective, that means doing whatever it takes to get a deal financed, leaving the risk for banks of “disintermediation” — or being cut out – a real one.  Already, buyout firms are going directly to other sources of funding for financing. For example, among the lenders for Hellman & Friedman’s $1.8 billion purchase of manufacturer Goodman Global Inc were GSO Capital Partners and Farallon Capital Management.

Lehman’s head of U.S. loan syndicate, William Hughes, however said at the same panel on Wednesday that the “bread and business” Wall Street has enjoyed would remain intact, with underwriters providing a great deal of value.  

The consensus was that it takes a greater degree of work and co-operation between the debt providers and private equity sponsors now to get a deal done.  ”There’s a lot more work going on upfront,” said Randy Schwimmer from Churchill Financial, on the same panel, adding that a lot of thought was going into the economic situation and determining if deals were in an area investors liked.

It’s also a bit of a waiting game for bargains to be found. On a separate panel at the same conference, Carlyle’s Stephen Owens said that sellers and buyers’ expectations haven’t yet come into alignment but he didn’t feel as though Carlyle was behind in its investment pace. “The last thing we are going to do is race to get deals done,” he said.