Private equity firms such as KKR, Blackstone and Texas Pacific Group are gearing up for a prolonged spending spree that would dwarf deals already made, a leading private equity figure said yesterday.

David Bonderman, founder and chief executive of Texas Pacific Group, said private equity represented 3 per cent of all transactions in public markets but that volume was destined to rise as the cash-rich financiers hunt for larger deals.

“There’s plenty of room for more to be taken private,” Mr Bonderman told the Super Return conference. He predicted that 2007 would be another record year for private equity dealmaking. “That will continue until the high liquidity in the world changes,” he said.

Mr Bonderman was speaking just days after Texas Pacific and KKR agreed to acquire TXU, the Texas utility group, for $46 billion in the largest buyout on record. The pair have also said they were considering making an offer for JSainsbury, Britain’s third-largest retailer, in a deal expected to be worth about £11 billion.

The billionaire US investor said there had been a dramatic surge in the number of public companies being taken private in the US in the past 18 months. Those figures were far lower in Europe, where most of the biggest players are still focused on selling off businesses.

However, he said that there was a “tidal wave” of chief executives, weighed down by regulatory burdens and investor scrutiny, who would welcome the opportunity to go private: “A lot of people are beginning to think that building a business out of the public eye is better.”

The sheer size and high-profile nature of the deals has attracted widespread criticism, particularly from trades unions, which have argued that private equity buys assets on the cheap, slashes jobs to cut costs and pockets the bulk of profits for itself.

In recent weeks, the debate has become even more heated as unions such as the GMB have lobbied to end the tax breaks on the billions of dollars of loans that make the buyouts possible. A handful of union members yesterday picketed the conference.

Mr Bonderman said much of the considerable publicity was not “fact-based”. He cited studies that showed private equity had created 420,000 jobs in Europe between 2000 and 2004 and that 90 per cent of private equity-backed companies reported higher growth rates than their counterparts in the public markets.

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