As leveraged buy-outs go, the recently announced $33bn (£17.4bn) deal to buy HCA, the US hospitals group, is rated the biggest ever. Now, NTL, the heavily indebted European cable group, looks set to go the same way for an eye-popping $20bn. With private equity investors gobbling up bigger and bigger chunks of the corporate world, fuddy-duddies worry that quoted equity will shortly become extinct. The usual party-poopers see a bubble and warn that hubris will soon lead to nemesis. For them, over-ambitious private equity folk deserve their status, shared with hedge funds, as the new bogeymen of the western world.

They have, of course, got it all wrong. The problem with private equity people is, in fact, their timidity. They have been desperately slow to raise their sights when so many institutional investors have been hurling ever larger sums at them in pursuit of better returns than those available in public markets. Why have they failed to tilt at the scores of companies much larger than HCA or NTL that have far less efficient balance sheets, bigger cash flows and a crying need for focus? Consider Microsoft, which has a balance sheet so inefficient that it would make a private equity investor weep. There was not an iota of debt in the thing at the last year-end. Worse, this mature software giant was sitting on cash and investments of $34.1bn - more than the value of the total HCA deal. True, it has embarked on a programme of share buy-backs, which will deplete the cash hoard, but without doing much to perk up the stock price if the recent past is any guide.