VIDEO: Bain Capital's John Connaughton

"People suggest the US is the best place to invest - you've got great credit markets, more constructive economic growth - but it's been difficult because volatility in the market has led people to have price expectations that are high when you go into a process," he says. "The flow has come back to maybe 2004-2005 levels but not nearly the level I would have expected given the pent up demand for M&A that I believe exists out there."

Bain, like many of its counterparts, has recapitalized almost every company it owns in the past 18 months, taking advantage of falling interest rates. Connaughton does not expect the spate of refinancing to continue indefinitely, simply because a lot of the deals completed within the last two years have been done at relatively high leverage levels.

"If you look at the market three years ago the levels were 4-5x and now they are 6-7x, so you could re-lever a company you bought two years ago up a couple of clicks and not even improve it," he says. "Now a lot of these assets are already being levered 6-7x so there isn't that opportunity unless you can generate a lot of cash flow."

Deal valuations are particularly frothy in the technology, media and telecom space - Connaughton compares it to "the irrational exuberance we saw in 1999" - but Bain has found its own angles. Connaughton cites BMC Software as an example. The private equity firm and Golden Gate Capital led a consortium that privatized the business in 2013 in a deal worth $6.9 billion, securing an attractive valuation due to the complexity of the transaction.

"It had a high-growth business inside a business that also had a legacy company. We were able to buy it for 6.5x," he says. "A lot of people have bought software companies in the last 24 months at 15x. Why did they do that? Because they can leverage them very high and they are very stable. While I think it would be difficult for them to make a great return it is also hard to lose your money.

"But we have been staying away from that because we don't think it generates as much upside as some of these value-oriented technology deals."

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