Capital fundcompanies manage investment capital obtained frominstitutional investorsofhigh net worth individuals (HNWIs)to acquire equity ownership of companies through a variety of strategies, including leveraged buyouts and venture capital. Private equity firms operate with a long-term investment horizon, typically five to seven years.
After acquiring an equity stake in a company, the venture capital fund ultimately tries to make money by selling the company directly or through aIPO (IPO). When particularly large investments are needed, these companies often partner with other private equity firms to raise the necessary capital and reduce their risk. Most companies specialize in one or more sectors or investment strategies in which they have particular expertise.
Here are 10 of the best private equity firms. Readers should note that private equityassets under management (AUM)may be a subset of a company's total assets under management. We report private equity AUM in the list below, where available.
Key learning points
- Private equity is an alternative form of private financing that takes place outside the public markets, where funds and investors invest directly in companies or participate in the acquisition of such companies.
- Private equity investments are typically only available to high net worth individuals (HNWIs).
- Private equity can take different forms, from complex leveraged buyouts to venture capital.
- Private equity firms are typically ranked based on their assets under management (AUM) and their success in distributing profits to investors.
- Blackstone Group Inc. had the most assets under management of the companies on this list at the end of the first quarter of 2022.
1. De Blackstone Group Inc.
The Blackstone Group Inc., founded in 1985 and headquartered in New York, with offices in London, Hong Kong, Beijing and Dubai. (BX) leads with $941 billion in total assets under management.
The company invests in a wide range of market sectors, including energy, retail and technology. While private equity is the largest asset class, Blackstone also has hundreds of billions of dollars in investments in real estate, credit and hedge fund solutions. Portfolio companies include Refinitiv, a provider of financial market data and infrastructure, Ancestry, a provider of digital family history services, and Bumble, owner and operator of dating and social networking apps.
2. KKR & Co. Inc.
KKR & Co. Inc. (KKR), formerly Kohlberg Kravis Roberts & Co., has built up assets under management of DKK 479 billion.Founded in 1976 and headquartered in New York, KKR is known as one of the first companies to engage in large-scaleleveraged buy-outs, which is still one of the company's specialties.
The company's notable transactions include the acquisition of RJR Nabisco in 1989 and the acquisition of TXU in 2007, its largest acquisition ever.Current portfolio holdings include Fiserv Inc., Optiv and PetVet.
3. CVC Capital Partners
CVC Capital Partners has nearly $127 billion in total assets under management, and its private equity platforms manage $87 billion in assets. CVC was founded in 1981 and has 25 offices worldwide.The private equity portfolio includes more than 110 companies around the world.
4. De Carlyle Group Inc.
De Carlyle Group Inc. (CG) has total assets under management of $376 billion, employs more than 1,900 professionals worldwide and operates through 26 offices across five continents. The company was founded in 1987 and is headquartered in Washington, D.C.The private equity unit has $167 billion in assets under management.and notable current holdings include Supreme and Workforce Logiq.
5. Thomas Bravo
Thoma Bravo has $114 billion in assets under management and more than 40 years of experience providing capital and strategic support to experienced management teams and growing software and technology companies.Some of the most notable companies in the portfolio include McAfee, Conga and Anchorage.
Private equity firms provide financial support to startups and companies that are not traded on public exchanges.
6. EQT
Based in Sweden, EQT A.B. (EQT.ST) has total assets under management of 73.3 billion euros, or almost $81.7 billion at current exchange rates. The company was founded in 1994 and has approximately 1,200 employees in 24 countries in Europe, North America and the Asia-Pacific region.Flying Tiger Copenhagen is perhaps the best-known portfolio company among American consumers.
7. Vision of equity partners
With more than $86 billion in assets under management, Vista Equity Partners invests exclusively in software, data and technology-enabled organizations.The company has strategic investments across businesses in healthcare, advertising and risk management, among others.In September 2019, Vista closed a $16 billion technology fund, the largest fund ever raised by an independent private equity firm.
8. TPG Capital
TPG Capital has total assets under management of $109 billion.TPG Capital was founded in 1992 by David Bonderman and Jim Coulter and is headquartered in San Francisco. The company has twelve additional offices in eight countries.
The firm's notable transactions include the acquisition of Continental Airlines in 1993, the acquisition of Petco in 2000 (with Leonard Green and Partners) and the leveraged buyout (with Bain Capital and Goldman Sachs Capital Partners) of Burger King in 2002 .Current portfolio holdings include Chobani, Fender and Airbnb.
9. Warburg Pincus LLC
Warburg Pincus LLC has a total of more than $73 billion under management, invested in more than 235 companies. The company's roots lie in E.M. Warburg & Co., founded in 1939, and Warburg Pincus, founded in 1966. Headquartered in New York, there are offices in 13 countries.
10. Neuberger Berman Group LLC
Neuberger Berman Group LLC has a total of $460 billion under management, including $70 billion in private equity. With more than 25 years of experience in alternative investments, Neuberger Berman employs more than 648 professionals in 25 countries around the world.
Which private equity firms pay the most?
Private equity is a very lucrative career. In 2019, average cash compensation, including bonuses, ranged from $1.1 million to $3.7 million for managing partners at private equity firms with less than $20 billion in assets under management (AUM), according to a Heidrick & Struggles study.
Onsresearchfound that overall average salaries in 2019 ranged from $596,000 to $2.2 million for partners and directors, depending on the firm's assets under management. Average compensation for associates and senior associates was less variable across company sizes, ranging from $193,000 to $315,000.
According toH1B-database, which aggregates the base salaries of all U.S. employees under the common H-1B visa, the companies that paid the highest figures for an associate position in 2019 were Apollo Global Management, KKR & Co. and Brookfield Asset Management. An associate is typically the lowest-ranking employee in an endowment fund. They are typically in their mid-to-late 20s and have a previous background in investment banking, consulting or other deal-related financial services.
Peak Frameworks is a financial career preparation platform founded by private equity and investment banking professionals. Peak Frameworks reports that Apollo Global Management is often known as the highest paying private equity firm in terms of all-in compensation, with their employees paid up to $400,000 per year.
Is Bain Capital prestigious?
Bain Capital was founded in 1983 and is based in Boston. The company employs more than 1,000 people across its global offices. Bain is best known for its co-founder: Mitt Romney, who was the Republican presidential candidate in 2012. Senator from Utah since January 2019.
Bain's portfolio has included some major brands since its inception, including Clear Channel Communications, Canada Goose, Virgin Holidays Cruises and Bugaboo International. Other major past holdings include Staples, Sports Authority, Guitar Center, Gymboree, Houghton Mifflin, Domino's Pizza, Burger King, The Weather Channel and Brookstone.
Overall, the fund has a preference for stores, restaurants and other consumer brands.
How much does a vice president make in private equity?
In private equity, your total compensation generally depends on the AUM of the company you work for. Companies with larger assets under management typically pay their vice president more.
According to Heidrick & Struggles' 2020 North American Private Equity Investment Professional Compensation Survey, vice presidents at companies with assets under management of less than $500 million had an average total cash compensation of $329,000 in 2019. For companies with less than $500 million in assets under management From $10 billion to $19.99 billion, the average total cash compensation was $592,000.
Which private equity companies are listed on the stock exchange?
The four largest listed private equity firms are Apollo Global Management (APO), The Blackstone Group (BX), The Carlyle Group (CG), and KKR & Co. (KKR).
Alternatively, Advent International, Bain Capital, TPG Capital and Warburg Pincus are all private companies.
In short
Professional investors at private equity firms raise a large fund (usually from wealthy investors) and reinvest that money to make the biggest possible profit. The nature of the private equity industry isrisky, as companies often engage in large and controversial leveraged acquisitions. It's also not entirely unheard of for private equity firms to lose billions of dollars or for companies to go bankrupt entirely. However, the companies in this article have all proven to be the largest and most successful private equity firms.
