Buy-out firms also protected themselves by aggressively buying back bank debt at distressed prices when they could.
That has enabled buy-out firms to start dialling back the amount of equity they put into portfolio companies.
ECONOMIST: Are private-equity firms able to escape their past?
Blackstone has pioneered the model of buy-out firms diversifying into other business lines.
Much of the debt at companies that buy-out firms purchased at the market's peak will fall due between 2012 and 2014.
Public pensions, which provide more than a quarter of buy-out firms' assets, should take note as they choose their future investments.
Buy-out firms are also returning to some of their more controversial practices.
ECONOMIST: Are private-equity firms able to escape their past?
But most of these gains, Mr Swensen points out, came from heavy borrowing by buy-out firms seeking to multiply their private-equity bet.
Conflicts of interest are possible: some buy-out firms' in-house dealmakers conduct valuations, which are reviewed by consultants and auditors and approved by senior executives.
Valiant efforts to interpret these rules are being made by the International Private Equity Valuations Board, an industry body that some buy-out firms support.
But other buy-out firms considering the same move, and that have not yet established its type of partnership, will not benefit from the grace period.
Investors are pressing buy-out firms to deploy that money, so they can start generating returns, and in the meantime are refraining from pledging more capital, making fund-raising for private-equity firms a struggle.
Doug Lowenstein, who runs the Private Equity Council, the industry's lobby group, says that the tax change could wreck buy-out shops by discouraging young talent from going into private equity and driving buy-out firms to relocate to countries that offer more favourable tax treatment.
ECONOMIST: Private-equity firms battle to keep their tax perks
The fairest objection comes from venture-capital firms, says Mr Lerner, which depend more on carried interest than buy-out shops to incentivise managers.
ECONOMIST: Private-equity firms battle to keep their tax perks
Smaller firms that had followed the leveraged buy-out path got whacked, too.
Strictly speaking then, these legendary companies are no longer really technology firms anymore, but rather giant leveraged buy-out companies.
Shortly afterwards he led a management buy-out, after which First emerged as one of Britain's two leading private bus firms.
ECONOMIST: The man who took the bus from Aberdeen to America
Buy-out executives themselves admit that performance will be more ordinary in future, since debt, which powered private-equity firms' profits, won't quickly return to pre-crisis levels.
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