Private Equity Capitalism's Misunderstood Entrepreneurs and Catalysts for Value Creation

Private-equity partnerships, especially in the form of leveraged buyouts (LBOs), have grown in size and number at an unprecedented rate during the past few years. In 1990, the business attracted less than $10 billion from investors. In 2006, however, more than 680 private-equity funds raised $432 billion, and the value of deals reached more than $700 billion (see figure 1). Driving this growth has been the impressive record of a number of large buyout groups in consistently generating superior returns for investors by overhauling the ownership structures of private and