Employees at companies owned by private equity firms were far more productive between 2003 and 2007 than those working in rival companies, an influential report by accountancy firm Ernst & Young has claimed, suggesting the buyout sector was able to be profitable without needing to asset-strip or be overly dependent on debt.

E&Y found productivity growth - calculated as gross value added per worker - rose by an average annual rate of 7.5% year on year, well ahead of the overall UK economy where the average between 2003 and 2007 was 1.4%.