When The Blackstone Group (NYSE: BX) went public, many observers -- myself included -- were concerned by the total lack of corporate governance checks and balances.

But at the time, the private equity industry was so hot that Blackstone could do no wrong, and no one cared enough to complain. But now that KKR is mulling a plan to list on the New York Stock Exchange, things could be different. The wheels have come off the industry, at least for now, and the arrogant attitude of "We'll tell you what we feel like telling you and you'll like it" may not play so well.

Leveraged buyout guru Henry Kravis, cofounder of the legendary private equity firm Kohlberg Kravis Roberts, tells Forbes that he believes private equity will come back from the hit it has taken from the financial crisis.

"It's not dead at all, but it will take different forms," he said.

Kravis compares the current economic environment to 1979, when, the U.S. economy was struggling, inflation was at 13%, unemployment at 11%, and zero financing was available. But then, of course, followed the explosion of private equity in the 1980s and 1990s.

Back in mid 2007, something unusual happened. That is, major private equity funds couldn't get funding for their deals. Yes, it was an ominous sign, which propelled the credit crunch and led to a grinding recession.

Now, the doom-and-gloom is fairly pervasive. In fact, there's talk that private equity is headed for a mega bust.

But, might this be an exaggeration? This is the sentiment of one of the legends in private equity, KKR's Henry Kravis.

After all, private equity has survived some tough times, such as the early 1980s (the prime rate reached 21%, after all). Oh, and there was the S&L implosion during early 1990s.

KKR is the firm that pioneered the private equity business getting its start in the mid 1970s. Over the years, the firm has established 14 funds and generated average returns of 20% (net of fees).

Lately, though, KKR has come under attack (as have many other private equity operators). So, when the firm's Private Equity Investors holding, which is publicly traded in Amsterdam, had its conference call recently, Henry Kravis talked about the state of private equity.

It was not an easy talk since the fund had to mark down the valuations of seven holdings. In fact, the return of the portfolio was a horrible -0.1% last year, and the fund is trading at a 38% discount to its net asset value.

Simply put, Kravis says that dealmakers will need to be creative. This means locating capital from alternative sources, such as private investors and hedge funds. There will also be more minority investments.

Kravis also stressed that KKR will continue to stick to its investment philosophy. This means focusing on companies that have stable revenues, diversified global platforms and room for operational improvement.

More importantly, Kravis said that the private equity business is about the long-term. If anything, the best opportunities are when markets are in the midst of dislocations – which is certainly the case now.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

It's been three weeks since our Money Face-Off feature ran here at BloggingStocks and on AOL, offering you the opportunity to share who you though had the financial edge in a series of twenty head-to-head match-ups. So I thought I'd take another look and see how things have worked out.

It's hard to pick just one big winner. In terms of the largest lead over a rival, Ivanka Trump easily beats Paris Hilton with 89% of the vote. Others holding big leads over their opponents include Tiger Woods, Warren Buffett, Steven Spielberg, and Rupert Murdoch.

In terms of receiving the most votes, the clear leader is the Oprah Winfrey vs. Martha Stewart match-up, with just short of 150,000 votes. Other big vote getters were Tiger Woods vs. David Beckham, Rudy Giuliani vs. Michael Bloomberg, and Bill Gates vs. Steve Jobs. In terms of the liveliest discussions in the comments, the winners are Oprah Winfrey vs. Martha Stewart, Erin Burnett vs. Maria Bartiromo, and Bono vs. Angelina Jolie. Also check out the comments for the J.K. Rowling vs. J.R.R Tolkien, Tiger Woods vs. David Beckham, and Ivanka Trump vs. Paris Hilton posts.

As for the face-off posts here that got the most attention, the clear winner is Erin Burnett vs. Maria Bartiromo, with more than 13,000 hits. Lindsay Lohan vs. Britney Spears and Oprah Winfrey vs. Martha Stewart also attracted lots of readers.

Results for all the face-offs follow below, but keep in mind that the voting is still open. It's not too late to add your vote or let us know what you think.

It's been a week since our Money Face-Off posts ran here on BloggingStocks and less than a week since the Money Face-Offs were featured on the AOL welcome page, and the response has been terrific. Many of the face-off polls have more than 50,000 votes thus far, and some of the match-ups are very close.

The closest of all is the face-off of CNBC anchors Erin Burnett and Maria Bartiromo: 50/50 with more than 61,000 votes so far. And the post has garnered 39 comments so far. The commenters have strong opinions, whether defending Bartiromo or Burnett, wishing other anchors had been included, complaining about the photos, or even questioning the Money Face-Off feature itself. Be sure to check it out.

The face-off between the former and current New York City mayors, Rudy Giuliani and Michael Bloomberg, garnered more than 67,000 votes. While Bloomberg has his defenders, presidential candidate Giuliani currently has a small lead in this match-up, with a little over half the votes. Can he hold on to that lead, though?

The match-up of supermodels turned businesswomen, Tyra Banks vs. Heidi Klum, also has more than 50,000 votes so far. In this case, it's Klum in the lead with about 55 percent of the vote. Only one reader, a Tyra Banks fan, has commented so far. Feel free to add your thoughts about which former supermodel you think is more successful.

This post is part of our Money Face-Offs feature. Let us know who you think comes out ahead in this head-to-head match-up, and check out our other Money Face-Off posts.

Stephen A. Schwarzman, co-founder of the Blackstone Group vs. Henry Kravis, co-founder of KKR. A showdown so delicious, it's already been immortalized on Page Six -- Schwarzman calls Kravis a "one-trick pony," Kravis calls Schwarzman "the poster boy for greed." Who is more arrogant? More eccentric? Richer? Only the planners of their lavish parties can tell ...

The two have been in a high-stakes tennis match of sorts for years in every financially-oriented aspect of their lives, starting with the companies they target, continuing through their more personal acquisitions and not even ending in their contributions to charity.

Nope. In the world of private equity, KKR had always been the hugest, the most storied, the most secret and powerful. KKR was responsible for the 1988 leveraged buyout of RJR Nabisco, inspiration for thousands of MBAs, as well as a book and a movie. Not many financial deals have inspired so much as a little sonnet, but this, this was the stuff of legend.

Part of that legend? Kravis' formidable ego.

Not that long ago, KKR's Henry Kravis said that private equity had moved into the "golden age."

Well, things have lost some sparkle lately.

First of all, it's getting tougher to raise money in the debt markets. What's more, with the surging stock markets, the valuations are making it difficult to get better returns. Oh, and of course, Capitol Hill is thinking of imposing some taxes on private equity partners.

Hey, just look at the lackluster performance of the shares of the Blackstone Group (NYSE: BX).

So this week, the founding partner at Carlyle, David Rubenstein, gave his opinion on things (this is according to a story in Reuters). Basically, he thinks the golden age of private equity has ended -- and it will get tougher for private equity firms to generate standout returns.

He's not predicting a crash though. After all, there are many investors that want to increase their exposure to private equity. Besides, he thinks top private equity firms will continue to generate better returns than the traditional markets.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Peter Cohan: Debating private equity taxation with The Wall Street Journal
Peter Cohan: Private equity lays a bigger golden egg on Wall Street
Tom Taulli: Private equity cookie monster gets fatter

The New York Times [registration required] reports that KKR partner, Henry Kravis, is belatedly and ineffectively entering the battle to keep Congress from raising his taxes. At issue is the 15% capital gains rate which private equity firms pay on the 20% of the profits their funds generate, known as carried interest. Congress wants to tax this 20% as ordinary income -- meaning Kravis and his pals would pay a 35% tax.

Despite his arguments about the jobs KKR created in Rep. Sander Levin's home state of Michigan and his claim that a tax increase could hurt the investment returns of the pension funds which invest in KKR, Kravis appeared not to have dissuaded Levin in his drive to raise the tax rate from 15% to 35%.

I wrote an e-mail to Rep. Barney Frank (D-MA) who chairs the House Financial Services Committee. My suggestion, on which I posted earlier, is that the real problem is that private equity firms and their bankers get rich by taking risks -- such as borrowing too much money -- and they often leave society to pay the costs of failed deals -- as they did with the $150 billion bailout of the junk-bond fueled collapse of the Savings & Loan (S&L) industry.

On the heels of the Blackstone Group LP (NYSE: BX) IPO, which will raise over $4.1 billion, buyout firm Kohlberg Kravis Roberts & Co. is looking at a public offering of its own. The amount that would be taken in is a more modest $750 million.

Much of the media coverage surrounding the Blackstone deal revolves around how rich it will make the founders and management of the firm. Investors have to wonder if the company needs to actually raise money for the core business. Debt capital is readily available and many transactions were public companies are taken private only have a 10% equity component. The balance of the dollars are borrow.

KKR has a number of executives who have been with the firm for very long periods, and an IPO would let them realize the fruits of their efforts. KKR was founded in 1976. Since then the firm has completed more than 150 transactions with an aggregate enterprise value of over $279 billion. Founder Henry Kravis is one of the grand old men of the industry.

Several observers have speculated that IPOs of these private equity firms may mean a "top" for the industry, the smart money heading for the doors. But, that may be no more true for KKR or Blackstone than it was for a company like Google (NASDAQ: GOOG). The founders of the search engine company have been selling a portion of their shares for over two years. If the company were private, getting some return on their work would be much harder.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Texas Pacific Group's (TPG) David Bonderman and KKR's Henry Kravis got a civic lesson yesterday. These buyout wizards met with the Texas House Committee on Regulated Industries on the issue of TXU (NYSE:TXU). Four proposed board members of TXU were there too: Don Evans, former U.S. Secretary of Commerce; James Huffines, Chairman of Plains National Bank Central Region; Ambassador Lyndon Olson, a former member of the Texas Legislature; and William Reilly, former Administrator of the U.S. Environmental Protection Agency.

The message: don't pass legislation that would require a regulatory review of the mega deal.

Hey, but don't politicians like to intervene -- especially when it concerns what consumers may ultimately pay?

Definitely. And it does look like the legislation is getting traction.

This does not mean the deal is doomed. Basically, it looks like TPG and KKR will need to make even more concessions, such as selling off assets and not piling debt on the regulated business units. TXU will also need to report its quarterly filings to the SEC.

The big problem is that the legislation will probably delay the process even more. And that's why TXU's stock has been lagging.

While the buyout offer is $69.25, TXU's stock is currently trading at $63.90.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

The Wall Street Journal Online has a great piece [subscription required] on the legendary private equity firm, Kohlberg Kravis Roberts & Co.

The firm's first deal was in 1979; that is, the $355 million buyout of Houdaille Industries. Of course, now KKR is more accustomed to multi-billion dollar deals -- in 2006, the firm invested about $6.9 billion on 12 deals. What's more, it is eying markets in Europe and Asia.

Along the way, however, things were far from perfect. After all, its $35 billion buyout of RJR Nabisco almost ended in a complete disaster (back in the late 1980s).

Kravis and Roberts agreed to a rare interview with the WSJ.com.

Once upon a time, back in the late 1980s, management of RJR decided to buyout the company. It did not take long until other buyers came to the table – as the stock price soared. The deal eventually turned into history's biggest leverage buyout (LBO). The drama became a best-selling book, Barbarians at the Gate, as well as an HBO movie.

Could the same story be developing at HCA, which recently decided to an LBO? Well, according to a Wall Street Journal story, it appears that the Blackstone Group, which is a top private equity firm, is in the early stages of making a bid.

It would not be cheap. After all, it will need to top the existing offer of $21.3 billion. Even in the universe of master dealmakers, this is still a lot of dough.

Does this mean investors should buy HCA stock? Not really. Blackstone still needs to arrange financing, as well as bring other private equity firms to the table.

Besides, Wall Street pros are skeptical that a bidding war will break out, as the stock price is below the existing $51 offer.

I'm always leery to say "this time is different." But those who are running mega private equity firms are seasoned (such as Henry Kravis of KKR). Some still remember the excesses of the late 1980s and do not want to repeat them.

It's certainly good news for private equity firms, which are likely to get good deals on companies. But, as for public shareholders, they probably will not get nice premiums on these deals.