Private equity is mimicking venture capital, banking on revenue growth instead of cost-cutting.

Why it matters: PE firms may struggle to maintain historical returns, particularly if the bull market slows its rampage and they're stuck with overpriced and overleveraged portfolios.

Driving the news: Bain & Co. this morning released its annual private equity report, highlighting how private equity has been paying dizzying prices:

• U.S. buyout multiples last year averaged 11.4x EBITDA, a record.
• A majority of U.S. leveraged buyouts last year were done above 7x debt-to-equity ratios, also a record.
• Some of this is driven by tech, which keeps seeing its sector-leading deal share increase.
• Per Bain & Co: "The simple math says that GPs buying companies at these prices will have to generate more value if they are to make good on return expectations — and they will have to do so in a highly volatile and uncertain business environment. A Bain analysis of hundreds of funds in which we co-invest shows that multiple expansion and revenue growth (not margin improvement) are by far the biggest drivers of PE returns."

But, but, but: Private equity would be quick to remind us that a bear market would mean new buying opportunities and that bondholders were mostly happy to amend-and-extend the last time things went bad.

The bottom line: When everything is going up and to the right, a venture-like returns model for private equity can work. But when things slow, PE investors may quickly remember why their VC peers are loathe to leverage portfolio companies.