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NEW YORK ( TheStreet) --This was not a big year for private-equity deals. In fact, the biggest buyout of a public company in 2014 was the $8.7 billion deal for PetSmart (PETM) .

The lack of big deals is expected to continue in 2015. It's not hard to see why: Investors are losing faith in private equity.

The reason is companies that went private for over $10 billion have not performed well since being bought out. That has scared off some of the investors in the biggest private equity funds. As a result, more private equity shops are turning to smaller, middle-market deals instead of behemoth buyouts to generate returns. That strategy appears to be more successful.

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The toxic combination of too much leverage and overpaying for assets tarnished the reputations of some of the industry's top names: David Bonderman, Henry Kravis, Stephen Feinberg. Each one did debt-laden deals in the LBO boom that preceded the financial crisis -- only to see assets levered with billions of dollars default. Other sponsors are still nervously looking for an exit. 

Henry Kravis and KKR's (KKR) - Get KKR & Co. Inc. Report partnership with David Bonderman and Goldman Sachs' (GS) - Get Goldman Sachs Group Inc. (The) Reportprivate equity arm produced the $45 billion buyout of TXU in 2007. It also produced the biggest bankruptcy in the history of private equity this April. Stephen Feinberg's $7.4 billion Chrysler bet had to be bailed out by the U.S. government -- although, according to reports, Cerberus Capital Management managed to salvage much of a soured deal.

For Bonderman and TPG Capital, the headaches are only beginning: Friday, Caesars Entertainment Operating Co., which runs Caesars Entertainment (CZR) - Get Caesars Entertainment Inc. Report , said it plans to file Chapter 11 early next year in an attempt to reduce $18 billion in debt.