Private equity used to be about changing the rules: taking on new targets, using different management tools, inventing new ways to obtain financing.

By playing by the old, conventional rules, private equity is raising even more eyebrows. T.P.G., formerly Texas Pacific Group, is leading a group of investors to pump $7 billion, with virtually no leverage, into the nation's largest savings and loan, Washington Mutual.

With the deal, T.P.G. resembles Vanguard, Legg Mason, and Barclays—mainstream institutional investors who also happen to be big shareholders of WaMu already.

As Andrew Ross Sorkin of the New York Times put it in his DealBook column today: "The buyout kings have been reduced to playing in the same sandbox as the rest of us."

Under the deal announced today, Washington Mutual sold the investor group 176 million shares of its common stock at $8.75 per share, or $1.54 billion. It also issued 55,000 convertible shares  that have an exercise price of $8.75 per share for $5.5 billion.

T.P.G.'s founding partner, David Bonderman, who served as a director of WaMu from 1996 to 2002, will return to the board.

Washington Mutual also said that it expects to report a first-quarter loss of $1.2 billion, or $1.40 per share, as it sets aside $3.5 billion for bad loans. It is also slashing its dividend to 1 cent per share, down from 15 cents, a move that will save it $490 million a year. Shares of Washington Mutual tumbled 9 percent, to $11.99.

There have been a number of prominent minority investments by private equity firms in recent years. At first glance, few look promising.

Deutsche Telekom: Blackstone Group bought 4.5 percent of the German telecommunications giant for 14 euros a share. It also got a seat on Deutsche Telekom's supervisory board. Today, the shares traded at 11.28 euros, or $17.17.

Sun Microsystems: Kohlberg Kravis Roberts & Co. invested $700 million in Sun in January 2007 through convertible notes with an conversion price of $7.21 per share. Sun shares are trading at $15.45.

Palm: Elevation Partners invested $325 million in convertible stock in June 2007. The conversion price is $8.50 per share. Palm shares are now at $5.60.

MBIA: Warburg Pincus agreed in December 2007 to buy 16.1 million shares of the bond insurer at $31.00 per share. MBIA is currently trading at $13.35.

To be sure, the use of convertibles in some of the examples above will guarantee a yield, and private equity firms generally have a longer time frame than most other money managers.

Still, why do the same thing that other big investors do?

For one thing, the private equity firms need to put the billions of dollars they have raised over the last year to work, as Sorkin and others have noted.

And they are certainly able to make big, risky bets that other big investors can't (a pension fund), or won't (the risk-averse Warren Buffett), or have come to regret (the sovereign wealth funds).
 
With the high-yield debt markets still seized up, there are few other investing alternatives available to private equity. 

The Financial Times' Lex column contends his deal could be the wave of private equity's future, saying that firms "will increasingly target distressed companies which require capital and have scope for a big profit if the business can be turned around."