Days of Easy Cash Over for Private Equity

""Financial engineering is no longer viable," said Henry Kravis at a private-equity conference in Dubai last week. "Going forward, we need to be thoughtful and even conservative."

It was a startling admission for a buyout king. Private-equity dealmakers normally wince when accused of making billions through mere financial sleight-of-hand. They create value, they say, by identifying companies with untapped potential, taking them private."