Investment leaders defended the prevalence of mega funds of US$10 billion and more at a conference in New York. Executives from The Carlyle Group, Warburg Pincus, The Blackstone Group, Bain Capital, and Technology Crossover Ventures stated their case at the Dow Jones Private Equity Analyst Conference. These funds have boosted private equity fund raising to US$154 billion so far this year, they pointed out.

The year is almost assured to surpass last year’s level and break the previous record set in 2000. And the numbers could keep climbing. David M. Rubinstein, founder of The Carlyle Group, said he would not be surprised if mega funds grew to US$50 billion in size, if large funds continue to generate a higher rate of return.

The new funds are already being put to work, according to Hamilton E. James, president of The Blackstone Group, noting that the overhang of funds is down and 40% of his firm’s recent fund is already being invested.

It’s not just about the funds. Rubenstein noted a “real paradigm change” in private equity as larger companies are being bought out, causing private equity to have a greater impact on the economy in general. Even the term “private equity” needs to be rethought, he suggested, proposing that the term “change equity” might be better suited.

He called on the industry to do a better job of explaining the benefits private equity brings to the economy from improving companies to increasing shareholder value to job creation to increasing returns to pension funds-which are major investors in private equity funds.

The conference has more than 1,000 attendees including more than 130 limited partners and is an important networking event in the private equity industry. It continues this afternoon and tomorrow at the Waldorf-Astoria Hotel in New York.