The End of the Private Equity Party

Investing in a publicly traded private equity firm such as The Blackstone Group (BX Quote), KKR (KFN Quote) and Fortress Investment Group (FIG Quote) during a credit crunch requires a bold dismissal of due diligence.

Unlike most investment companies, large private equity firms' portfolio construction and performance are impossible to know because of a lag in reporting and a secrecy of holdings. In addition, exorbitant fees and new accounting rules may make private-equity firms crumble in the new world of tight credit and renewed conservatism.

Blackstone, KKR and Fortress are all rated "sell" by TheStreet.com Ratings. Blackstone's shares have fallen 54% in the past year, and KKR's have tumbled 84% and Fortress' 85%. ...