However, he noted that City finance houses and private equity need to do a better job in explaining the benefits they create, or they could fall foul of clumsy attempts to curb them which might easily ‘kill the goose which is laying the golden egg’.

Speaking at a business seminar at London’s Dorchester hotel, Lambert commented that private equity-backed companies account for one in five private sector jobs in the UK, offering a compelling economic model with potential to raise the efficiency of businesses both in terms of their operations and their financial structure.

He added: ‘Since the whole aim of private equity investment is to sell on the asset at a profit after its underlying performance has been improved, managers have a real interest in the long-term health of their business.

‘If they strip out its assets and close down its factories, as the critics claim, they won’t have a viable business left to sell at the end of their holding period. The evidence, at least until recently, has been that companies refloated on the stock market after private ownership have performed better than have other new issues.

‘According to data produced by the British Venture Capital Association, private equity-backed companies have created more new jobs in recent years than their publicly listed counterparts. None of this squares with the allegations of robbery and plunder.’