Corporate raiders, asset strippers, predators. The words used to describe private equity have never been flattering. The infamous Gordon Gekko from Wall Street (played by Michael Douglas) has immortalised an image of private equity firms being run by powerful, ruthless men, callous in their regard for the companies they take over.

But like all stereotypes, they tend to obscure a bigger picture. And the industry has moved on since the days of men in braces following the Regan-era creed that 'greed is good'. So why has there been such growth?

Private equity is a cyclical industry. Like all cyclical industries it requires a favourable combination of factors in order to flourish. Recently, the industry has been blessed by a heady cocktail of low interest rates, inexpensive companies with healthy cash flows and thriving operations. This has meant that private equity firms have been able to borrow money cheaply to buy large, cash rich companies that they believe could be run more efficiently and/or that show attractive growth potential. Of course, changes in any one of these conditions could make life tougher for the industry.

Unlike the asset stripping image portrayed in the cinema of the late 1980s, private equity firms nowadays tend to be about helping improve businesses rather than breaking them up. In a number of cases they work a bit like personal trainers for the corporate world, buying inefficient listed or unlisted companies, putting them through the 'private equity gym', then re-offering them to the public or some other private buyers once their fitness has been improved.

They are doing this with some success. Private equity backed companies that are re-offered on the London Stock Exchange have been generally more dynamic and globally competitive than their peers. Their stock prices have performed better too. This is certainly good news for the UK economy and investors.

But the industry is not always about making significant changes to businesses. It is often involved in taking minority stakes in management buy-outs, providing businesses in good shape with the additional capital they need to achieve their goals. Jupiter's management buy-out, which has been supported by TA Associates, who are renowned as growth investors, is an example of this sort of arrangement. Under this arrangement, TA has taken a minority stake in Jupiter's business in order to back the management's existing strategy.

Like us, private equity firms are, at heart, investors. Their success is ultimately linked to the success of the businesses they buy into, which is a strong incentive not only to make the right investment decisions, but also to follow the best strategy for the growth of that business.