In the late 1990s, Hellman & Friedman made a bold investment in Young & Rubicam, a struggling advertising agency at the time, and made four times its original stake from the deal.

Ever since, the private equity industry has been waiting for the San Francisco based firm to score a similar coup in the sector.

Hopes were high last year, when H&F joined the auction for Grey Global, the world's seventh-largest advertising group. In the event, WPP, the British industry titan run by Sir Martin Sorrell, snapped up Grey for $1.3bn.

Now H&F has teamed up with WPP to prepare a joint offer for Aegis, the UK media buyer that could be worth more than $3bn. Other bids might come from Publicis, the French advertising company, and possibly its compatriot Havas.

For those close to H&F, founded in 1984 by Warren Hellman, a former president of Lehman Brothers, the spotlight could not have returned at a better time.

Last year, H&F closed a new fund that was capped at $3.5bn after being over subscribed. Its nose for a deal was confirmed last week when it was part of a four-member consortium of private equity groups that made about six times its investment selling Texas Genco, a US utility, to NRG Energy for $5.8bn.

Another payday could come soon in Europe. In the summer of 2003, H&F put money into ProSiebenSat.1 and Axel Springer, two German media companies. ProSiebenSat.1 is now being acquired by Axel Springer in a deal worth €2.5bn ($3bn).

H&F not only has a good track record but a distinctive, even controversial, investment philosophy.

"They look for deals in areas that are less well-travelled than many of its peers," says one first-time investor in H&F's most recent fund.

Unlike most buy-out groups, H&F tends to shy away from putting money into businesses with hard assets (one exception being the acquisition of Texas Genco). Instead, it hunts for less capital-intensive "people'' businesses.

"We have proven throughout our 20-plus year history to be excellent partners to managers of businesses driven by intellectual capital," says Brian Powers, chief executive.

One of these areas is financial services. Last year, H&F backed the management buy-out of Mondrian, the London-based asset management arm of Lincoln National, the US insurer, in a deal worth $172m.

Another is advertising. When in April it agreed a $1.1bn deal to buy DoubleClick, the online advertising group, H&F faced competition only from a consortium of hedge funds, rather than any direct rivals, highlighting how unusual the firm's interest in this sector is among private equity groups.

H&F often finds itself having to defend its idiosyncratic approach. Its defence is that when a "people" business has a strong competitive position in a given market, with a strong brand, like certain advertising groups do, there is little difference with a traditional private equity target.

The free cash flow and the predictability of revenue growth can still be significant, people close to the firm say.

As H&F, flanked by WPP, takes a run at Aegis its more subtle form of private equity investing will once again be put to the test.