My biggest question is how are the sovereign wealth funds and other middle eastern investors reconciling their religious principles against the fact that private equity investments involve the application non-trivial amounts of leverage? Owning non-controlling stakes in Carlyle or any other PE firm isn't going to position them to remake the business along Islamic finance lines. I doubt they would want to anyway (hopefully) seeing as how they are investing on the basis of the returns the firms have generated using levered tactics. If a private equity firm can't lever, is it a private equity firm anymore? I think not; now its just a mutual fund with worse overhead.