Research and development spending as a percentage of company sales, they discovered, rose faster for the buyout companies than for others.

The Manhattan-based buyout company has already spent $36 billion buying companies and has a $5 billion kitty to keep buying others.

Simultaneously the banks, as so-called "equity underwriters", together invested around £1.4 billion in the buyout company.

"I also think there will be more than a few leveraged buyout companies that will need to be recycled."

But is this a good time, in the wake of the stock market collapse, to be starting a buyout company?

What is more, with the debt loads under which many buyout companies operate, they have little choice but to become extremely efficient.

At the time, they both worked at Narragansett Capital, one of the first leveraged buyout companies in the nation.

TRW sold most of Experian, which provides credit and marketing information, to two buyout companies two months ago for $1.01 billion.

Other American and British buyout companies are looking for deals in Germany, too.

To my surprise, the buyout companies typically underperformed those projections.