The Australian Tax Office might be seeking more than $500 million of Texas Pacific Group’s Myer profits, but its deals whose entire enterprise value is less than that which represent the best opportunity in private equity today, according to Credit Suisse.

Middle-market buyouts are wooing patient investors who are wanting to add value through operational improvements rather than financial engineering and debt, according to Josh Peel, Credit Suisse’s vice-president alternative investments. Lower EBITDA purchase multiples of middle-market businesses – one to two times lower than the mega buyout end – meant there was significant upside for the old-fashioned private equity disciplines of strategic business reviews and implementation of real process changes, managing director of Credit Suisse’s private equity group, David Russell, said.

The mid-market buyout sector is already gaining popularity, despite the long J-curve where investment is generally in the first five years with returns occurring in years four to 11, Peel said.