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When they are being polite, their critics call them asset strippers! On other occasions, they are a swarm of locusts, and then they are Barbarians at the gate. I refer, of course, to private equity companies.
In fact, the phrase “Barbarians at the gate” was first used to describe private equity in the celebrated book, by Bryan Burrough and John Helyar, which deals with the takeover of Nabisco by Kohlberg Kravis Roberts in 1988. It even spawned a film.
And yet, it seems the mantle Barbarian is often unjustified.
And this week has thrown up two good examples.
First there's the hedge funds. It seems that a much bigger scourge of business is the practice of shorting. This really is short-term economics. Sometimes a hedge funds bets that a company's results will be worse than expected and off it goes, selling stock it doesn't even own. The shorting itself will often cause the share price to fall. The result: the hedge funds get rich and investors in the company whose shares were shorted take a nasty loss. It's this fear of the hedge funds that created an unhealthy pre-occupation amongst management with quarterly and half year reporting.
The practice of shorting is often laughably described as investing. But that is an inaccurate description. It's gambling, and unlike proper investing, does not provide funds that can help businesses grow.
But news this week told a different story. March and April were bad months for speculators who went short.
A part of the problem was private equity. According to the FT, if companies are under-reporting, the private equity people often move in. This has kept up the share price in companies that would previously have made nice little victims for the short sellers.
Then there are analysts. Sir Nigel Rudd, chairman of Alliance Boots, the very company that is currently in the throes of a buy-out with KKR, called analysts "stupid" this week. Sir Nigel told the FT: "When I did the Alliance Boots deal, everyone hated it. The greatest pleasure out of all of this has been the analysts…I actually love that. They are so stupid most of them... they are very bright or stupid."
The whole thing about the Alliance Boots buy-out is this. Its deputy chairman, Stefano Pessina, is a great dynamo of the pharmaceutical retail sector. And he is disenchanted with the city and its obsession with reporting. He has teamed up with KKR to enable Alliance Boots to focus on the long-term - a time frame that promises exceptional opportunities, because the ageing population across the developed world brings with it an unprecedented potential market for health-care.
It was this short-term attitude in the city that Sir Nigel was complaining about. It was thanks to this that the gates were left open for KKR. But it wasn’t Barbarians that crossed the drawbridge and entered the portcullis, instead it was builders, wanting to create a prosperous future, even if that means putting the short-term considerations of analysts to one side.
And that's the point about private equity. Sure there are risks, anything that involves debt rather than equity investment carries risk, but it does provide the promise of better business for the future. If private equity is a swarm of locusts, then it eats inefficiency and short-termism, leaving a business environment ripe for sustainable growth.
Yesterday, the Works Foundation revealed their thinking on private equity. It’s good and bad, they said. When private equity buys into a company and keeps the management in place, then more jobs are the result. But, if it replaces the management team, then jobs fall.
Will Hutton, chief executive of the Work Foundation, said: "Private equity firms pride themselves on their ability to squeeze performance from the organisations they own, and they turn up the pressure on individuals in order to do so. When private equity backs an incumbent management team the result can be improved productivity and higher employment. But we are concerned that often, the price that is paid by workers is too high and that levels of trust between workers and managers suffer."
While, on the face of it, the Works Foundation report seemed to strike a balanced position, with pros and cons for private equity, others are not so sure.
After all, Mr Hutton seemed to sew his colours to the anti private equity mast, when he added "There is now an urgent need to ensure private equity firms throw open their books to proper public scrutiny, that they pay appropriate levels of tax, and that the growth of private equity is not exposing the entire British economy to a risk of instability due to the levels of debt the industry takes on as it grows."
Well, let’s examine the Works Foundation research.
It found that if private equity replaces management, job losses follow. All I can say to that is 'duh'.
Of course job losses follow. If private equity feels management needs replacing, then the chances are that it’s not happy with the way the firm is run at all.
The higher level of gearing that private equity purchase entails, does bring with it dangers.
But then so too, does the current way. British business remains relatively poor in terms of productivity, and we face more and more competition from abroad. Private equity holds part of the answer.
While private equity eyes up potential targets for its amorous eyes, retail seems to draw its attention, creating a rush a of blood like no corporate candy.
For one thing, there's cash flow. Not for retail land that agonising wait while customers decide when they are going to settle their bills. (Though no doubt suppliers to retailers have to suffer that wait.) And then there's the property portfolio that so many retail giants possess.
In the past, it's been their ownership of property that has seen many stores through the hard times. They didn't have to pay rent - or at least much rent - and so the lower overheads created a store with sufficient backbone to stand the toughest times.
But, then again, is that really a sign of strength? Or is it a sign of management weakness?
Look at it from the point of view of competition? If you are an up and coming retail entrepreneur, maybe you have an idea for a new outlet and you just open the one store first, how do you compete? It's one thing taking on the huge buying muscle of the retail giants, but another if you have to pay rent, while your competitors don't. Perhaps, in the long run, retailers owning their own portfolio of properties hold back competition.
Recession often has the effect of cleaning out business, leaving just the lean and ultra efficient. But, when that store can pull through the hard times thanks to its property portfolio, it can emerge relatively unscathed despite abysmal management failings.
Maybe that's why so many of the UK's oldest and established retailers have been struggling so much of late: their property portfolio gave them strength which none deserved - and allowed them to fight on, when they should have thrown in the towel long ago.
And there's another thing. Isn't it time retailers made their mind up as to what they really are?
Are they property development companies or retailers? If they can only retain their competitive advantage through their ownership of property, then maybe they are in the wrong business. Perhaps, they should lease their stores to retailers whose management can make a store run profitably without the luxury of property ownership?
Private equity may have its critics, but at least, when applied to retail, it results in a sector that is better able to meet the needs of customers.