And because companies that are owned by private equity firms don”€™t have the same disclosure requirements, they have an advantage. They don”€™t have to tell the public how much they are worth, how much they invested in new technology, or how many employees they have. This can give businesses a competitive edge in the business world and allow them to develop things under the radar.

This privacy is also what helps set buyout firms as great go-to villains. A cadre of wealthy investors that keeps things confidential is a boon to conspiracy theorists. With its many political connections and ties to the defense industry, the Carlyle Group was accused of everything short of kidnapping the Lindbergh baby, and in the last decade it has mostly divested itself from its defense holdings.

About 10 years ago, several private equity and venture capital firms had to disclose more information than they wanted to because their investors included state pension funds. State disclosure laws were brought to bear, and private equity firms had to disclose private company information that even many pro-disclosure law advocates agreed should remain private. The losers in the end were the state pension funds and other public entities, which were later shut out of some of the more lucrative funds.

Private equity can be a place of respite from the public market’s demands. However, many of the large private equity firms today have either gone public themselves or have some kind of publicly traded entity attached to them. They have investors, public and private, demanding they put money to work, and if they can avoid the temptation of easy money on the debt markets, they will be better for it in the future.