Sandra Robertson, the head of Oxford University Endowment Management, has sharply criticised the standards of the private equity business.

Ms Robertson manages £1.4bn for the university, its charitable trusts and colleges. Speaking at the Private Equity & Venture Capital Association conference in London last Thursday, she called the self-justification and ethics of the industry into question.

She argued that if the industry wanted to continue to raise money, it would have to demonstrate its worth and stop taking undeserved fees. Ms Sanderson said that in the last decade private equity had on generated an average return of only 8.5pc despite buoyant credit markets.

She commented that the industry was comparatively unsuccessful compared to other asset classes such as credit or equities. The difference, she said, was that private equity contained more hidden fees and charges.

“You make it so hard for us to invest and you can’t pretend to be exceptional any more. Times have changed, and in the West we live in a lowgrowth deleveraging environment.

“The industry is at an inflection point. It has gone from a cottage industry to a global industry. Entrepreneurs have been replaced by brands, and partnerships replaced by organisations.

“The industry supports a huge ecosystem, from M&A advisers, debt advisers, layers, accountants, consultants, debt providers, and much more – that is a lot of mouths to feed and that means a lot of fees.”

She described herself as “quite frankly disgusted” by the way in which large companies make money from management fees and not through ‘carried interest’ — payment from investment profit.

Ludovic Phalippou, Lecturer at the Said Business School and expert in private equity said Ms Robertson’s basic message was “clear and correct”, though he suspected her comments had been taken out of context by the media. He explained “in large private equity companies hidden fees are extremely big so they don’t have the incentive to work hard and get bonuses.”

Ms Robertson told the paper the speech “was designed to be heard by an audience who are very knowledgeable about private equity”.

She added, “The comments from the general press seem to have taken things out of context. I do believe that private equity done well is a useful part of portfolios.”