As I posted earlier this month, Blackstone Group's CEO Stephen Schwarzman gave an interview to the Wall Street Journal with a compelling theme -- Schwarzman is the Napoleon of private equity. Napoleon-watch tracks his moves on the business battleground.

Yesterday I posted that The Blackstone Group's (NYSE: BX) IPO was close to breaking below its initial offering price. And today, it happened -- Blackstone's master limited partnership units currently trade 13 cents below its initial offering price of $31.

One reason could be that the market for lending to private equity appears to be cooling off. According to The New York Times [registration required], one recent deal was unable to raise the amount sought. Thomson Learning, a former division of the media publisher Thomson Corp. (NYSE: TOC) is seeking $1.6 billion -- $540 million less than the $2.14 billion it initially requested for a private equity financing of its management takeover.

Moreover, lenders are no longer as willing to accept potentially worthless payment-in-kind financing -- which pays back a loan in the form of more debt. For example, Thomson needed to eliminate a $540 million provision for a pay-in-kind toggle, a type of debt that allows interest to be paid in cash or with the issuing of more bonds. The entire offering must now be paid back in cash, and Thomson Learning agreed to add more covenants -- which set strict requirements a borrower must meet to satisfy the lender -- to both the loan and the bond portion of the sale.

The point? The golden era of private equity may be over for this cycle. And BX investors don't want to stick around for the scary part of the movie.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.