Anymore, anyway. As rapid-fire filings these days clearly show, life has certainly changed for the private-equity industry, where easy credit, a steady economy and willing sellers created a buying bonanza in the none-too-distant past. And no firm was more voracious than this one – a company that purchased, on average, a business every 11 days for the past three years. An inside look at how its world has turned upside-down.

February was a rough month for Sun Capital Partners Inc.

Two of the buyout shop's companies, retailers Lillian Vernon Corp. and Wickes Furniture Co., filed for Chapter 11 bankruptcy protection. Through a struggling hedge-fund vehicle, Sun also was the largest shareholder of Sharper Image Corp., the gadget retailer that filed for Chapter 11 protection after an abysmal holiday-shopping season.

The crush of filings illustrate just how life has changed for the private-equity industry, where easy credit, a steady economy and willing sellers created a buying bonanza. And no firm was more aggressive than Sun, whose well-oiled deal machine has purchased, on average, a business every 11 days for the past three years.

The Boca Raton, Fla., turnaround specialist seeks businesses that few others will touch. Its portfolio reads like a roster of the misbegotten: women's-clothing chain Limited, bought from Limited Brands; fast-food chain Boston Market Corp.; discount retailer ShopKo; and department-store chain Mervyns.

More than half of the revenue from Sun's 75 companies comes from retailers, restaurants or auto businesses -- all cyclical industries that depend on ever-fragile consumer-spending levels. Many of the buyout targets were already struggling in a robust economy. A weak economy won't help.

Marc Leder, the firm's 46-year-old co-founder, says that while the bankruptcies eat him up inside, they come with the territory. "It's inevitable that in any investment business you're going to have some failures," he says. "We're far from perfect, but we think our results speak for themselves."

Indeed, Sun's returns have been stellar -- its buyout funds have generated annual returns, before fees, of more than 40% a year since 1995. Sun attracted wider notice when it closed a $6 billion fund last spring, four times the size of its previous one.

"They've done a masterful job of building the premier turnaround firm in the country," says Jeffrey Ennis of asset manager Wilshire Private Markets Group, a Sun investor.

But Sun, like the rest of the buyout industry, will have to prove its mettle in the years ahead. It must quickly make tough decisions about fixing, selling or closing pieces of its companies and whether to pour money into their investments that are under water. And lenders have tightened their purse strings, making new deals scarce.

Mr. Leder and 46-year-old Rodger Krouse were classmates at the Wharton School at the University of Pennsylvania and then colleagues at Lehman Brothers in New York. They moved to Florida and started Sun in 1995, hoping to trawl the Southeast for deals.

They soon realized that investors everywhere were competing against them. "There was no advantage in being down here," Mr. Leder says. "But it turned out to be a nice place to live."

From 1995 through 1999, they "passed around a hat" and raised $28 million for a series of one-off deals. Early investors included partners at Boston buyout firm Bain Capital who knew Messrs. Leder and Krouse from their Lehman days. Today, Sun's funds manage about $10 billion. Its companies employ some 165,000.

Sun revels in dysfunction. More than 40% of its acquisitions have negative earnings before interest, taxes, depreciation and amortization, or ebidta. Many targets are nearing a bankruptcy filing; some are already there.

Once a deal closes, Sun moves swiftly. All Sun-owned companies must file identically formatted 18-page monthly reports -- "plus appendices," emphasizes Mr. Krouse -- that force financial rigor.

"We try to impart a sense of urgency," Mr. Krouse says. "People at these companies know there are problems, but these processes help bring them to the surface."

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