15 Biggest Private Equity Firms in the World
In this article we are going to list the 15 biggest private equity firms in the world. Click to skip ahead and jump to the 5 biggest private equity firms in the world. Private equity firms play a huge role in making or breaking businesses. These firms provide financial backing to businesses by investing in their private equity. Often after an initial investment, businesses get stuck in a chasm due to a lack of financial resources and that is often what leads to failure. Thus, sometime for investing more than affordable loss, organizations, especially startups, need the help of private equity firms to generate the necessary traction that is needed to get them recognized in their industry and field of operation.
Typically, private equity firms raise funds from various individual and corporate investors and make investments in the private equity of an organization for which they receive a periodic management fees as well as an agreed upon percentage of the profits. The private equity firm works to increase the value of the organization and maximize the return on the investment that it has made. This is done by undertaking various actions such as changes in technology, human resource, research and development, product portfolio or the overall corporate strategy, goals, and mission of the organization. Private equity firms are not about short-term investments into more liquid assets like those made by hedge fund firms; instead. they provide longer-term investments in organizations that operate within their area of expertise and take up operational roles bringing in substantial changes in the organization’s structure and strategy.
With private equity firms the reward is huge, but the risks associated with it are also massive and if the changes brought about do not work the organization ends up bankrupt. Once a private equity firm is done investing in an organization and bringing about the necessary changes it exits by either mergers and acquisitions whereby the company is sold for cash or an exchange of shares or an Initial Public Offering (IPO) whereby the company’s shares are offered to the public market for trading.
Private equity firms are often struck with controversies and said to be operating on vulture capitalism. This is not true for most established firms but to some extent the modus operandi of private equity firms is such that those rich investors end up making huge profits while the employees and the working class suffers as they are often laid off in the name of restructuring which really is downsizing. Moreover, many a times private equity firms make such investments that pay off huge returns and profits in the short run and when the firm takes an exit the organization soon begins to crumble down and run into losses or worse bankruptcy. However, there is a difference between private equity firms and investment companies, more of which you can learn about in the 15 largest investment companies in the world.
The Wall Street Journal carried out a survey on a renowned private equity firm called “Bain” in which it found out that 22% of the organizations that Bain invested in either filed for bankruptcy or shut down within eight years of Bain's exit. However, there are almost as many success stories as there is evidence of failure and thus private equity firms are still more than relevant in the business arena. Perhaps the time and development stage in which the organization is, is extremely crucial in determining whether going for a leveraged buyout through a private equity firm is a great idea or not. If a company is already making losses and is headed towards bankruptcy going for a leveraged buyout is smart as the right kind of investment influx might stabilize the company and help it remain a going concern. Hence, for the above-mentioned reasons and many more private equity firms are very important for businesses. Following is a list of 15 biggest private equity firms in the world with the highest success rates and returns on investment. The rankings and listings have been compiled from PEI 300 index, Fortune and Visual Capitalist. So let's take a look at the biggest private equity firms, starting with number 15:
15. Thoma Bravo
Thoma Bravo is a US-based private equity firm which is quite well-known because of its long-standing history of more than 40 years. The company’s focus and expertise lie in making investments in software and technology companies mainly and is seen as one of the best private equity firms in the tech industry. The firm has more than 270 acquisitional transactions on its portfolio and is seen as the pioneers who introduced the build and buy strategy to the technology and software industry.
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14. Apollo Global Management (NYSE:APO)
Apollo Global Management was founded in 1990 in the US and later expanded to Europe and Asia. The company is more than just a private equity firm and also specializes in credit and real assets investment beside private equity. Although, Apollo more largely focuses on credit investments, it has also invested in the private equity for many notable organizations. Apollo has an extremely diversified and geographically scattered investor base but more than 50% of the firm’s investors lie in North America where the firm is most popular.
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13. EnCap Investments
EnCap Investments is another American private equity firm founded in 1988. The firm’s expertise lies in the oil and gas industry and it has made most of its investments in upstream and midstream oil and gas companies. EnCap Investments has made more than 240 transactions worth approximately $22 Billion in its 33 years of existence. The firm is the leading venture capital provider in the independent US energy sector and has set a track record of bringing in high return to investments and minimizing losses as much as possible.
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12. Leonard Green and Partners
It seems like all US based private equity firms have made it to our list. Leonard Green and Partners is based in Los Angeles and was founded in 1989. The firm specializes in private equity investments and has proceeded with more than 100 transactions with various clients that belong to different industries and fields. The firm has a track record of keeping safety margins to avoid losses for the acquired company and bringing in great returns on investment by keeping a flexible approach to structure. Although, the firm has much lesser transactions than many other firms that have made to this list but has still managed to raise a good amount of private equity capital.
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11. Bain Capital
Bain Capital is another American private equity firm based in Boston, Massachusetts. The company basically provides management consultancy and specializes in various different kinds of investments such as credit, real estate, public equity, and of course private equity. Bain Capital has not limited itself to a specific industry and instead makes transactions with companies across various industry sectors and geographic regions. The company has pioneered in introducing a model based on management consultancy to the private equity investing field and has over $120 Billion in assets under management.
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10. Advent International
Coming on to the top 10 leading private equity firms, Advent International makes it on the list and ranks 10th. Advent International is another American private equity firm which has expanded globally and now operates in a total of 12 countries which also include countries in Europe and Asia. The firm has made over 360 transactions and has managed about $66 Billion worth of assets. Advent International has made private equity investments in various different sectors such as retail, healthcare, technology, financial and many others.
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9. Clayton Dubilier & Rice
Another American private equity company to make it on the list, Clayton Dubilier & Rice was founded in 1978 and is one of the oldest, most experienced private equity firms in the world and is often seen as one of the pioneers of the industry. The firm has a knack of making investments that mostly involve corporate divestitures. Clayton Dubilier & Rice has expanded to Europe in the 21st century and has made about 100 transactions which are worth more than $140 Billion.
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8. EQT Partners
EQT Partners is an international private equity investment organization which was founded in Sweden and later expanded its operations to London, New York, Shanghai, Hong Kong, Amsterdam, Munich, and various other prominent cities of the world. The firm has two business segments that are private equity and real assets. EQT Partners has about EUR 46 Billion in assets under management across its global clientele and has invested in many important and reputable organizations coming from varying industry sectors, geographic regions, and business models.
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7. Neuberger Berman
Neuberger Berman is ranks number 7th on our list of biggest private equity firms. It is an independent investment management firm that is owned by its employees. Neuberger Berman specializes in various different kinds of investments such as hedge funds, public equities, and private equities. Other than the fact that it is one of the leading private equity firm, the organization is also known for setting new benchmarks for cultivating a positive organizational culture and has been rated as one of the best places to work on various occasions.
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6. CVC Capital Partners
CVC Capital Partners, unlike most other firms which made it to our list, is one private equity firm that is not based in America and is instead headquartered in Luxemburg, Europe. The firm operates in Europe, America, and some parts of Asia. CVC Capital Partners specializes in various kinds of investments but mainly focuses on private equity and credit. The firm is one of the leaders in global investment firms with around $109 Billion in assets under management.
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Disclosure: No position. 15 biggest private equity firms in the world is originally published at Insider Monkey.
