Private equity is now front and center in the public spotlight.

Big firms like Blackstone and Kohlberg Kravis Roberts have gone public, or are planning to do so. Politicians have spoken out about the wave of American companies that have been bought out. And the frenzied pace of dealmaking has turned some private equity moguls into financial celebrities, with glamorous parties and lavish spending rivaling that of the Hollywood set.

But it wasn't always like this.

"I preferred the industry when it was obscure," says Kevin Landry, the chief executive of TA Associates, a Boston-based private equity firm.

Sometimes overlooked in all the talk about the rise of private equity's New Money is how old the business actually is.

Landry, 63, has watched the industry evolve over the past 40 years. When he started in 1967, most people had no idea what the business was. Landry isn't afraid to admit that he was one of those people. Despite that, it's clear that he was born for it. His easygoing manner and disarming tone put the most sophisticated company owners at ease.

Private equity has gone under different names, but it has always involved taking over troubled or neglected companies, investing in young businesses, and reaping profits for investors-often pension funds and other institutions.

What has changed is the scale. Instead of the traditional focus on middle-market companies, private-equity firms have turned to larger and more prominent businesses. In recent years, buyout firms have made deals for some of the country's biggest brand names, from Toys "R" Us to Chrysler. And the deals have gotten bigger, including the record $45 billion buyout for Texas energy giant TXU and the recent $29 billion deal for Hilton Hotels.

Fueling the explosion of deals has been the flood of cash available for investment.

Private equity firms raised $197 billion for investment last year and $41.4 billion in the first quarter of this year, a 66 percent increase over the first quarter of 2006, according to Buyouts, a Thomson Financial publication. Private equity firms' corporate investments totaled about $315 billion last year.

Still, many firms have borrowed huge amounts of money to buy companies.

Heaping on the debt is not Landry's style, and the trend leads him to believe that the private equity industry is in trouble.

"We're not there yet, but we are heading toward a crash. We're driving pretty fast through the fog,'' he warns.

"Debt is the horse; private equity is the cart. The industry has lost touch with reality. We know we are paying big prices, but we think we can always bail out to another private equity firm-the debt can bail out to distressed debt. But this is a high-wire act, and when we fall, it's going to be a long fall."

TA Associates, which has $10 billion in assets under management, has taken a more conservative approach since it began in the 1960s, when Peter Brooke, a venture capitalist, launched the business. Landry started right out of Wharton business school; it was the first white-collar job he'd ever had. (Before joining, Landry did a stint in the Army.)

While many private equity firms routinely take on debt of 50 percent or more when buying a company, TA typically does not use more than 30 percent. The firm considers this sound investment practice and sticks to it.

TA has been busy putting capital to work from its most recent $3.5 billion fund. It recently acquired Jupiter Group from Commerzbank for $1.5 billion.

As C.E.O., Landry makes certain TA does not get caught up in any of the hoopla surrounding the industry.

 "Applying more debt got some very big deals closed recently. Generally, when financial markets get a good thing going, they take it to success, and success usually breeds excess," says Landry.

Excess can be seen all over the industry these days and came to a head recently when Stephen Schwarzman, co-founder and chief executive of the Blackstone Group, threw himself a multimillion-dollar 60th birthday party last winter. He made headlines again when his firm filed for an I.P.O., from which Schwarzman stands to make more than $7 billion.

"I don't know why anyone would want to draw that type of attention to themselves with a party," Landry says. "It's not smart, and looking back, they probably don't think it was a smart thing to do anymore either.

"We really didn't need all that publicity, especially because most of it has been negative," he adds. "But the I.P.O. is appropriate, and the only part that is surprising is that it didn't happen sooner."