The City’s surprise success story

Once synonymous with men in red braces peddling junk bonds, the leveraged buy-out industry has become almost respectable. This is in large part thanks to some clever rebranding that would make even David Cameron blush; now invariably described as ‘private equity’, which sounds a lot cuddlier, the industry has even enticed that holier-than-thou old rock star Bono to hop on to its gravy train.

Private equity companies, such as the former U2 star’s $1.9 billion Elevation Partners, are investment funds that borrow money to buy companies, manage them for a few years and then sell them on, ideally at a huge profit. The business pages are full of this industry’s exploits, led by companies which until two or three years ago few of us had heard of — the likes of KKR, Blackstone, Cinven, Carlyle, CVC Capital Partners and Texas Pacific — but which are now involved in virtually every City deal.