Private Equity’s Creative Wizardry Is Obscuring Danger Signs

As Pete Stavros addressed the private equity industry’s yearly shindig in Berlin last month, the KKR & Co. executive’s words were slightly less headline grabbing than those of Apollo Global Management’s co-president Scott Kleinman. But they were just as troubling.

Whereas Kleinman went in hard with his warning that “everything is not going to be okay” for buyout firms, Stavros joined in with the concession that his industry may have gotten “too creative” lately. Noisy or not, his comment strikes at the heart of an issue that’s starting to disturb everyone from investors to regulators: PE’s current mania ...