YOU have to admire Damon Buffini, head of Permira, Europe’s biggest private-equity house, who has been running a one-man crusade to defend his industry. Since he gave his first interview to us earlier this year, he has used every opportunity to mount a robust argument against critics who have called his industry the ugly face of capitalism.

But Buffini must be deeply disappointed by the lack of public support from others in his sector. The City has been pathetic in rallying round an industry that has generated hundreds of millions of pounds in fees for advisers and lenders.

As a result, the level of debate about private equity over the past two weeks has developed little beyond pantomime level — a “yes you are, oh no we’re not” slanging match between angry union officials concerned at job losses and Buffini saying his industry is a force for good. It’s nothing more than old-fashioned boss-bashing by unions.

Private equity’s biggest failing has been an inability to communicate its message and it is being mauled as a result. This paper has been highly critical of that, as well as the industry’s lack of transparency and accountability. But we do not stand in the way of what it is doing.

This is a now multi-billion industry accounting for one-third of Britain’s workforce, and with that must also come a greater sense of corporate responsibility.

But where are the big banks such as Barclays, HBOS and Royal Bank of Scotland who have lent billions of pounds to this industry and collected huge fees as a result? Why aren’t they speaking out about private equity’s benefits? Lenders couldn’t ask for better clients who reshuffle their debt as fast as a croupier.

Where are the lawyers and the accountants when private equity needs them? Both professions have whole teams dedicated to serving their needs and now account for 30% or more of some lawyers’ fee income. Their supine behaviour has allowed the private-equity debate to be hijacked by unions.

But of all the parties with a vested interest in the success of private equity, where are the sector’s biggest investors, the pension funds that have enjoyed stellar returns over the past decade?

It is the lack of participation by the last group that amazes me, and the reason is simple. Most institutions are still struggling to intellectualise the contradictory forces of private equity and traditional long-term investment in quoted companies. They are too scared to speak out individually, for fear of getting squeezed out of the next fundraising by a KKR or a Blackstone. Yet privately, most institutions do want private equity to make changes in the way it behaves.

They believe the management fees, for the scale of funds they are running, are ridiculously high. Do private-equity firms really need a 1.5% management fee on a $10 billion fund just to pay their utility bills? That was fine 10 years ago when the big funds were only $1 billion.

Unlike the quoted firms they invest in, institutions cannot sack the boards of private equity, their corporate-governance teams are powerless and they tie up their capital for five years or more with no right of redress.

But despite all this, the financial returns have been fantastic. The debate over private equity needs the voices from all the participants, and the one so far heard from the City has been pitiable.

Princely role

FOR some six years the Duke of York has been acting as a roving trade ambassador. In that time he has had little recognition for his efforts other than earning the soubriquet Airmiles Andy, and his detractors say the only thing he carries when he goes abroad is his golf kit.

Prince Andrew has taken the criticism on the chin, but in the business community he wants to be taken more seriously. To help increase awareness of his role and the benefits it can bring, he entertained a handful of journalists last Wednesday at Buckingham Palace. His business mentor Sir Digby Jones, former CBI director-general, had persuaded the prince to take this open approach.

In essence, what the prince believes is that Britain should not take a protectionist stance; he echoes the mantra of Gordon Brown that we should excel at research and development and education. And if manufacturing jobs can be done cheaper abroad, we should not stand in the way. He also believes Britain is doing far better overseas than it is given credit for.

Where the prince believes he can be useful is opening doors to British industry, particularly in the developing world where royalty carries a lot of prestige.

I wish the prince well. Not enough people champion British industry and unlike the succession of trade ministers who come and go every few years, he is a permanent fixture. That allows time to create some genuine relationships and if the prince is serious about his role, he can make a difference and I hope he does.

Sour dough

WHAT were Rob Templeman, Debenhams’ chief executive, and his board colleagues Chris Woodhouse and John Lovering doing buying shares in the retailer last week at some 30p below the price the group floated at? The share dealings come three weeks before a trading update and in the same week that a huge number of shares changed hands on speculation that Bauger and other Iceland groups were building a stake. It is not as though the trio are short of Debenhams shares. Their investors want them to run the group, not buy stock on the cheap. It leaves a bad taste.

john.waples@sunday-times.co.uk

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