Companies listed on Aim, especially those with high levels of cash and a large strategic shareholder, could provide tempting targets for private equity, according to research published on Friday.

Likely targets include: Panmure Gordon, the mid-market brokerage; Character Group, the maker of Dr Who toys; and WH Ireland Group, the Manchester stockbroker, according to Noble Group, the investment bank.

The research, produced by Absolute Strategy Research, a consultancy, says credit market turmoil will prompt private equity groups to seek targets with healthy cash balances and strong growth potential, as shown by some Aim companies.

To compile a "private equity watch list" for Aim, it used a filter including only companies with a market capitalisation between £15m and £100m, net cash positions, an institutional investor with a holding of at least 10 per cent and staff with at least 5 per cent.

John Llewellyn-Lloyd, chief executive of investment banking at Noble, said: "In a post-crunch world, conservative financing structures will be the norm. Aim-listed companies, which have on average the lowest net debt-to-equity ratios in the UK equity market space, will look very attractive to private equity buyers."

Other companies thrown up by the watch list included Gulf Keystone Petroleum, an oil exploration company; Financial Objects, a software developer for the financial services sector; and Arden Partners, the stockbroker.

While figures this week from the Centre for Management Buy-out Research showed a steep drop in the value of buy-outs in the first six months of this year, many of the biggest deals were public-to-private buy-outs of listed companies.

These included Emap, the publishing company; Abbot Group, the oilfield services company; and Biffa, the waste management group.

"There has been a continuing interest in private equity-backed public-to-privates but this may be set to accelerate, which is undoubtedly positive for the [Aim] market," said Mr Llewellyn-Lloyd.