From the London Guardian:

More than half the profits generated by private equity firms in recent years have been made by piling debt onto the companies they invest in, according to a report published today.

The findings of the first annual report on the industry, designed to increase transparency and improve the image of private equity, instead provided further ammunition for the industry's critics.

The analysis by accounting firm Ernst & Young claims that just one fifth of returns achieved come from strategic and operational improvements.

Is it reasonable to expect that these ratios would be about the same for U.S. private equity firms?

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