Buyout Firms Are Magically -- and Legally -- Pumping Up Returns

  • The practice can boost rate of return by 25 percent or more
  • ‘It can make a mediocre fund look terrific,’ says consultant
Photographer: Daniel Acker/Bloomberg
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The steroid era has arrived in private equity.

Much like a raft of baseball sluggers in recent decades, buyout shops have seized on a performance enhancer that artificially jacks up results, according to many industry executives.