Guy Hands, one of Europe's top private equity bosses, has criticised "pass the parcel" deals, in which buy-out groups sold companies to each other for everincreasing prices, for inflating the bubble that left investors facing big losses.

Adding to the waves of grim predictions for private equity at this week's Super Return conference in Berlin, Mr Hands yesterday said the recent merry-go-round of deals meant investors were now pulling back from the industry at the wrong time.