London Briefing:Delegates at the annual CBI conference in London earlier this week were treated to a rare sighting of one of the biggest beasts in the private equity jungle, writes Fiona Walsh

In his first public outing since the multi-billion dollar flotation of the Blackstone Group in June, chief executive Steve Schwarzman defended his under-fire industry, insisting that private equity was "a force for good" and, whatever its critics say, was here to stay. But he admitted some failings. "Our industry has been guilty of telling our story badly, if at all," he said. "That has to change."

He also accepted that, as private equity targets increasingly well-known companies, they must be prepared to come under greater scrutiny.

But he defended the industry against the key criticism that is levelled against it - that it is only interested in making a quick buck. At Blackstone, he said, investments were typically held for five and a half years, against just 10 months for the average stock market investor.

He also quoted a raft of recent studies to his receptive audience, which he said backed up his belief that private equity-backed companies create more jobs and outperform industry peers.

Businesses backed by private equity have, over the past five years, increased employment by an average of 9 per cent a year, compared with 1 to 2 per cent for publicly-held companies, he claimed.

Average returns on private equity shareholdings have outperformed the stock market by over 100 per cent over the same period, he said, with Blackstone's funds consistently beating the S&P index - by about 1,200 basis points over the past 20 years.

The stats went down well, but then the Blackstone boss chose a friendly forum to break cover for his first public outing. Had his audience been anything other than representatives of the employers' organisation, he would undoubtedly have been given a far rougher ride.

His claims on job creation will not have impressed the trades unions, who are increasingly critical of the private equity industry's record on employment. Nor did the Blackstone boss address the issue of the huge profits earned by the leading private equity players in recent years, or the minuscule amount of tax paid on those profits.

While Schwarzman was among friends at Islington's Business Design Centre, the venue for the conference, delegates were not entirely uncritical of private equity.

In an interactive survey, a high proportion - 45 per cent - of the conference audience voted that the industry deserved its poor publicity and an even greater proportion - two-thirds - said they believed the negative coverage of the industry had damaged the reputation of business as a whole.

CBI delegates were too polite to mention it, of course, but Schwarzman has himself been blamed for much of the critical coverage of the private equity industry, hence his low profile in recent months.

Blackstone is the world's largest private equity player and is renowned for its sharp elbows and even sharper deals. When it floated on Wall Street in the summer, its prospectus laid bare the lavish rewards enjoyed by Schwarzman, whose personal wealth is put at over $10 billion.

The flotation documents revealed that the Blackstone boss received $398 million last year. He also scooped $449 million in the flotation and retains a 23 per cent stake in the firm.

The huge figures sparked a furore, as did the tales of Schwarzman's lavish lifestyle - from the $400-a-time stone crabs that he apparently likes to dine on, to the $3 million party he threw for his 60th birthday party last year.

Even in the super-rich private equity industry, the party set new standards of excess. There were private performances from Rod Stewart, Patti LaBell and composer Marvin Hamlisch. There was a brass band, the Abyssinian Baptist Church choir was in attendance and the venue on Manhattan's upper east side was decorated to look like Schwarzman's own living room - complete with a large portrait of the birthday boy himself. Among the guests were Donald Trump and mayor Michael Bloomberg.

The subsequent rash of publicity did not go down well with the more low-profile players in the private equity world, many of whom blame Schwarzman for fuelling the negative coverage of the huge riches that have been earned by the industry in recent years.

So, next time the Blackstone boss takes to the stage to complain about private equity players being portrayed as asset-strippers whose only aim is "to enrich a few nasty people [like me]", he might perhaps take a moment to consider his part in generating some of the less favourable coverage for the sector.

Fiona Walsh writes for the Guardian newspaper in London