Secondary deals are winner for much of the private equity deal supply chain. Sellers generate large profit. Buyers get to deploy capital that perhaps had gone unused. And the investment banks earn big fees for advising and lending. But this elaborate exercise of selling among themselves for a wide spread and big fees tends to irk investors.

The New York Times notes the case of CalPERS, which owns a stakes in a TPG fund that bought Vertafore and a Hellman & Friedman fund that bought it. The CalPERS CIO told the paper: "We still have exposure to the company but at a higher valuation. To me, this isn't a sign of strength in the private equity business, but more a sign that firms must commit their capital before their investment period runs out."

Another controversial deal: Dividend recaps, in which portfolio companies are forced to issue debts only to pay a hefty dividend to the owners. About 56 private equity-supported companies have issued about $23 billion in dividend debt this year. In one sense, this demonstrates the resourcefulness of the industry, which is always bent on finding ways to get paid (on behalf of their limited partners) and keep the deal machinery alive. This certainly does not burnish the industry's reputation with outsiders and the public.

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