Dec 3, 2023

The 10 Largest Private Equity Firms In The World The 10 Largest Private Equity Firms In The World Private equity (PE) firms have become a formidable force in the global financial markets. They obtain capital from investment firms,… Private equity (PE) firms have become a formidable force in the global financial markets. They obtain capital from investment firms, pension funds, high-net-worth individuals (HNWIs), etc., and deploy it to acquire equity stakes in companies. PE firms usually acquire companies outright or at least purchase a majority stake. They operate on a long-term scale, requiring between 5 to 10 years to manage and exit an investment. The aim is to make a profit by selling the acquired company for a higher price or listing its shares on the public markets. Sometimes, PE firms acquire a company primarily with borrowed money, putting up just small equity funding from their pockets. This process is called a leveraged buyout. These are the top ten private equity firms by assets under management (AUM)*: Blackstone Inc. – $1 trillion AUM. KKR & Co. – $520bn AUM. TPG Capital – $212bn AUM. EQT – $130bn AUM. Advent International – $89bn AUM. Let’s dive deeper into these firms below. Blackstone Inc (USA): It was founded in 1985 by Stephen Schwarzman and the late Peter Peterson, who served as U.S. Secretary of Commerce before launching the firm with Schwarzman. Blackstone has investments spanning real estate, technology, media, manufacturing, energy, etc. In 2023, it became the first private equity manager to top $1 trillion in AUM. Co-founder and CEO Schwarzman earned $1.3bn in salary, dividends, and carried interest in 2022 alone. KKR & Co. (USA): It was founded in 1976 by three Wall Street luminaries: Henry Kravis, George Roberts, and the late Jerome Kohlberg Jr. KKR unleashed the swarm of leveraged buyouts after putting up just $15mn of its own money to acquire American conglomerate RJR Nabisco in a $25bn deal in 1988. Barbarians At The Gate: The Fall of RJR Nabisco chronicles the fascinating saga. Carlyle Group Inc (USA): It was founded in 1987 by Bill Conway Jr., Dan D’Aniello, and David Rubenstein. The three founders still hold active roles at their firm, although Rubenstein is more famous for hosting a Bloomberg Television show where he interviews fellow industry titans. TPG Capital (USA): It was founded in 1992 as the Texas Pacific Group by David Bonderman, James Coulter, and Bill Price III. The firm debuted with a leveraged buyout of Continental Airlines, a major U.S. airline (it merged with United Airlines in 2012). Bonderman is TPG’s current Chairperson, Coulter is co-chief executive, and Price focuses on winemaking while holding a passive position at TPG. CVC Capital Partners (Luxembourg): It spun out of Citibank in 1993 and morphed into Europe’s biggest private equity firm over time. It invests primarily in European companies. EQT (Sweden): It was founded in 1994 by the prominent Wallenberg family of Sweden. Seven non-family partners have become billionaires and many more hold multi-million dollar stakes in the publicly-traded firm. EQT has investments across Europe, North America, and Asia. Thoma Bravo (USA): It was founded in 2008 by billionaire Orlando Bravo, hence the name. It primarily invests in enterprise software companies and has been on a fundraising and dealmaking spree since 2020. Vista Equity Partners (USA): It was founded in 2000 by Robert Smith, America’s wealthiest black man by Bloomberg rankings. Smith admitted to tax evasion in 2020 and paid $139mn in fines (he entered a non-prosecution agreement with the U.S. Justice Department). He remains chief executive, and Vista has been on a dealmaking spree since then. Advent International (USA): It was founded in 1984 by the late Peter Brooke. It’s a global private equity firm with investments across Europe, Asia, North America, and Latin America. It remains a privately held company owned by its partners. Warburg Pincus (USA): It was founded in 1966 by the prominent Warburg banking family, making it one of the oldest private equity firms. The firm’s current President, Timothy Geithner, served as U.S. Secretary of Treasury under the Obama administration from 2009 to 2013. From the above information, you can observe that 8 of the top 10 private equity firms are based in the USA and two hail from Europe. The top four (Blackstone, KKR, Carlyle Group, and TPG Capital) are publicly-traded companies in which anyone can buy shares and earn dividends. Blackstone chief executive Stephen Schwarzman is the highest-earning private equity titan worldwide, taking home over $1bn annually in salary, dividends, and carried interest as Blackstone’s biggest shareholder. He has a net worth of nearly $40bn, according to the Bloomberg Billionaires Index. Share this...