David Walker of Morgan Stanley has been conducting the review over a five-month period having been commissioned to do so by the banking industry in a bid to circumvent increasing pressure for greater regulation of the area.
Mr Walker said: "The industry has come to be seen as needlessly secretive, feeding suspicion and in some quarters close to hostility…there is thus a major transparency and accountability gap to be filled."
In response to the study's findings, he has posited that the industry should adopt a voluntary code of conduct, under which private equity companies would issue annual reports and statements online within a four-month period of the year-end and would provide details of their balance sheet management.
The report did however stop short of recommending that legislation is required to bring about a change of approach in the LBO sector, with Mr Walker arguing that such measures would create a "mess".
He added: "If we intervene in a fast-moving business like private equity and legislate, it's very hard to change at a later stage.''