Intro: Finding the Top 7 Private Equity Firms
Many newcomers to the financial world may be intimidated by seemingly complicated financial terms. Some newbies may be unable to differentiate between varied investment strategies and funds. You may wonder, “What is private equity?” and “What is a private equity firm?”
This article offers a window into the complex financial landscape of investments and funds. Here, we’ve put together a brief look into private equity firms and the investments they commonly make.
Hopefully, we’ve provided a useful educational breakdown of private equity for those who are looking for clarification and understanding.
Award Emblem: Best Private Equity Firms
AdvisoryHQ’s List of the Top 7 Best Private Equity Companies
List is sorted alphabetically (click any of the names below to go directly to the detailed review section for that firm):
- Apollo Global Management
- Ardian
- Bain Capital
- Blackstone Group
- Kohlberg Kravis Roberts
- The Carlyle Group
- TPG Capital
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Largest Private Equity Firms in the World (Total Assets Under Management)
| Top Private Equity Firms | Total (AUM) |
| Apollo Global Management | AUM: $173 Billion |
| Ardian | AUM: $55 Billion |
| Bain Capital | AUM: $75 Billion |
| Blackstone Group | AUM: $95 Billion |
| Kohlberg Kravis Roberts | AUM: $126 Billion |
| The Carlyle Group | AUM: $178 Billion |
| TPG Capital | AUM: $60-$80 Billion |
What is Private Equity? Definition
Private equity is a grouping of assets comprising equity securities and debt in private companies, which means that the companies are not traded on a public stock exchange. Private equity funds may also come from high-net-worth individuals.
A private equity firm is an investment firm that invests in private equity, although private equity investors are not limited to such firms. Private equity investments often involve investing in an ailing company by offering an influx of funds as leverage. The investor will also often make operational changes or take other actions to make the company more profitable.
Middle Market Firms
Middle market private equity firms are a tier of private equity firms. Such companies have revenues that range from around $50 million to $ 1 billion. The term “middle market” references the fact that such firms sit between smaller investment companies and the largest billion-dollar firms that have the largest private equity funds.
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Features to Consider When Researching Private Equity Firms
While researching private equity firms, there are a number of factors that may be applicable during the search. Of course, everyone’s search will be different depending on varied needs, limitations, and goals.
Many people may simply be interested in learning about the largest private equity firms for the educational value and to enhance their understanding of the economy or financial sector. This list includes some of the necessary information needed to understand how private equity firms operate and the important features of the firms.
Image Source: BigStock
Consulting a financial advisor or expert is also recommended as it may provide necessary information to enhance the decision-making process and perspectives.
1. Assets Under Management (AUM)
Some of the biggest private equity firms have over one hundred billion dollars of assets under management. The term “assets under management” (AUM) refers to the measure of the total value of all of the financial assets under a particular institution.
The term is occasionally referred to as funds under management. Although not a comprehensive compilation, this article has included some of the largest private equity firms internationally.
2. Global Reach
Many of the largest private equity firms have an international presence and have offices not only here in the U.S. but also in many of the international finance hubs.
3. Investment Industries
Many firms have particular areas of interest with which they typically invest. That information is generally readily available on a firm’s website. A few of the industries included at private equity firms include aerospace/defense, automotive aftermarket, distribution, energy services, infrastructure products/services, transportation & logistics, and many more.
4. Community Involvement
Some private equity firms are committed to giving back to the community. Some companies encourage employees to volunteer with charitable organizations, and others have established mentorship programs and are otherwise actively engaged with the community.
If this is an important factor for you, review the firm’s citizenship or foundation page on their website or research the firm’s charitable involvement.
5. Returns
A firm’s success rate and ability to create a profitable return is also a likely factor of interest. Review the firm’s portfolio or consult an expert to learn about a company’s ability to make successful investments.
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AdvisoryHQ’s Selection Methodology
What methodology does AdvisoryHQ use in selecting and finalizing the firms, services, and products that are ranked on its various top rated lists?
Please click here “AdvisoryHQ’s Ranking Methodologies” for a detailed review of AdvisoryHQ’s selection methodologies for ranking top rated firms, products, and services.
Detailed Review – Top Ranking Private Equity Firms
Below, please find the detailed review of each firm on our list of best private equity firms. We have highlighted some of the factors that allowed these private equity firms to score so high in our selection ranking.
Apollo Global Management Review
Apollo Global Management is an alternative investment management company founded in 1990. Some of the firm’s investments include private equity, credit, and real estate investments.
Key Factors That Enabled This Firm to Rank as a Top Private Equity Firm
Below are primary reasons we selected Apollo Global Management to be rated as one of the top private equity firms.
Firm Snapshot
On its website, Apollo refers to itself as one of the world’s largest alternative investment managers. In March 2016, the firm’s assets under management totaled around $173 billion. The firm staffs over 900 employees and has offices in 15 countries globally.
Of those $173 billion assets under management, about $38 billion is attributable to the private equity business activities of the firm (as of March 2016).
Industry Concentrations
Apollo typically makes investments within nine core industries. Over time, Apollo has established expertise and an important network within these industries. Those sectors include:
- Chemicals
- Commodities
- Consumer and retail
- Distribution and transportation
- Financial and business services
- Manufacturing and industrial
- Media, cable, and leisure
- Packaging and materials
- Satellite and wireless
Investment Strategy
Apollo applies several strategies in making private equity investments. Those strategies include the following:
Opportunistic Buyouts
Opportunistic buyouts have made up the majority of Apollo’s past investments. Check out more about Apollo’s opportunistic buyouts here.
Distressed Buyouts and Debt Investments
Throughout Apollo’s business history, about 40% of private equity investments consist of distressed buyouts and debt investments. These are made in alignment with Apollo’s traditional buyout strategies and are generally aimed at businesses with high potential but low balance sheets. Check out more about Apollo’s distressed buyouts and debt investments here.
As described on its website, Apollo’s investment strategies also include corporate partner buyouts and new company creation.
Veterans Initiative
Apollo encourages recruitment, hiring, engagement, and retention of veterans inside of Apollo itself and connected investment companies.
Apollo’s hiring practices have earned it a Military Friendly employer title from GI Jobs.
Ardian Review
Ardian is an investment company with $55 billion in assets under management and 12 total offices, two of which are in the United States. The firm explains on its website that it believes a long-term investment approach leads the way to success.
Key Factors That Enabled This Firm to Rank as a Top Private Equity Firm
Below are primary reasons we selected Ardian to be rated as one of the top private equity firms.
Firm Snapshot
Founded in 1996, the firm’s president is currently Dominque Senequier. The firm is composed of 410 employees in 12 offices globally.
Since 1996, the firm has worked with over 250 companies, and its website explains that its current portfolio consists of 130 businesses.
Company Portfolio
To view the businesses with which Ardian has an investment relationship, check out its portfolio list online. Companies are easily sorted by industry, year of involvement, country, and more.
Ardian has also posted standout success stories with companies that include:
- 2i Rete Gas
- Competence Call Center
- Diana
- Keolis
- Rollon
- Spotless Group
Ardian Foundation
Ardian supports social engagement and charitable works through its activities with the Ardian Foundation.
The Foundation supports initiatives that encourage bright and promising students to reach their potential regardless of social and economic disadvantages. The Foundation works with disadvantaged students through bursaries, grants, financial help, and mentoring from Ardian employees.
Over five years, the foundation’s budget has reached 2.5 million euros that have assisted 84 students of modest backgrounds to reach their full potential. Beneficiaries include students of all ages in France, Italy, the US, and China.
Investment Activities
Ardian mainly works with private equity investments and asset management in regard to institutional investors. Ardian clients have access to a varied range of funds through:
- Ardian Funds of Funds
- Ardian Private Debt
- Ardian Infrastructure
- Ardian Real Estate
- Ardian Mandates
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Bain Capital Review
Bain Capital is an international investment and financial firm that is active in private equity, ventures, credit, and public equity.
The firm was founded in Boston in 1984 and has since grown into a major global private equity firm. Bain Private Equity has nine international offices and has raised private equity funds in several countries.
Key Factors That Enabled This Firm to Rank as a Top Private Equity Firm
Below are primary reasons we selected Bain Capital to be rated as one of the top private equity firms.
Community Involvement
Bain Capital’s employees have donated time and or money to hundreds of worthy charitable causes.
Bain Capital established Bain Capital Children’s Charity in 1997. The charity makes monetary donations to more than 100 charitable organizations benefitting children.
Bain’s website explains that beneficiaries receive financial donations and the attention of at least one Bain Capital professional. Some beneficiary organizations include:
- Big Sister Association
- Children’s Hospital Trust
- Horizons for Homeless Children
- Forever Young Foundation
- Room to Read
- And more
Industry Specializations
Bain Capital Private Equity’s investment portfolio encompasses a large selection of sectors and industries. However, over time, the firm has commonly worked with a few particular industries and, therefore, developed a familiarity and expertise working within them. Such industries include:
- Consumer, retail, and dining
- Financial and business services
- Health care
- Industrial and energy
- Technology, media, and telecom
Investment Portfolio
The firm has handled and finished over 280 investments since its founding in 1984. The investment portfolio is available online and is sortable by industry and region.
Approach
Image Source: Three-tiered focus
Bain explains on its website that the firm has a three-tiered focus in its investment strategy.
First, the firm focuses on building great companies over several years. Secondly, Bain forges a strong partnership with the management of companies with which they have invested. And third, Bain provides management with the appropriate resources to promote success.
Blackstone Group Review
Blackstone Group’s private equity arm has $95 billion of assets under management and $39 billion available to invest. Its private equity portfolio of over 92 companies encompasses over $81 billion in annual revenue and employs over 570,000 team members globally. Blackstone Group itself staffs over 250 private equity professionals in the US, Europe, and Asia. These stats were posted on Blackstone’s website as of March 31, 2016.
Key Factors That Enabled This Firm to Rank as a Top Private Equity Firm
Below are primary reasons we selected Blackstone Group to be rated as one of the top private equity firms.
Blackstone Charitable Foundation
Blackstone Group founded its Charitable Foundation in 2007 and is committed to supporting entrepreneurial growth within the communities that Blackstone offices are located.
Some of the organizations that have received grants include:
- 4.0 Schools
- Ashoka
- Coalition for Queens
- Idea Village
- TEDWomen
- Social Innovation Summit
- Village Capital
The firm also supports the Blackstone Launchpad program, which is a company-based program that connects with 500k students internationally. The program mentors students, staff, and alumni in the art of entrepreneurship.
Private Equity Investments
The company makes several types of investments in companies across the globe. Categories of investments typically made include:
- Growth equity
- Development projects
- Buy and build platforms
- Traditional leveraged buyouts
Visit Blackstone Group’s website to view its investment portfolio. Each investment listed on the website has an accompanying breakdown of statistics and other relevant investment information.
Kohlberg Kravis Roberts Review
Kohlberg Kravis Roberts is a global investment firm investing in several asset classes, including private equity, energy, infrastructure, real estate, credit strategies, and hedge funds. The firm was founded in 1976 by Henry Kravis and George Roberts. The firm has $126 billion in assets under management as of March 31, 2016.
Key Factors That Enabled This Firm to Rank as a Top Private Equity Firm
Below are primary reasons we selected Kohlberg Kravis Roberts to be rated as one of the top private equity firms.
Private Equity Investments
Kohlberg Kravis Roberts (KKR) leverages funds in investments that it believes have the potential for significant improvement.
Private Equity core investments in the Americas include consumer products, chemicals, metal and mining, energy and natural resources, financial services, health care, industrials, media and communications, retail, and technology.
Private Equity core investments in Europe include consumer and retail, energy, financial services, health care, industrial and chemicals, media and digital, and telecom and technology.
Private Equity core investments in Asia include Consumer products, energy and resources, financial services, health care, industrials, logistics, media and telecom, retail, real estate, and technology.
Investment Portfolio
KKR has posted its sortable investment portfolio on its website for those who are interested in viewing it.
Private Equity Investment Approach
On its website, KKR describes its private equity investment approach with a few key elements and values, which include:
- Expertise in creating value
- Stakeholder engagement
- Experienced, stable, and deep investment team
- Strong and consistent performance
- Global reach
- Creativity and innovation
- Deep industry knowledge
KKR Citizenship
KKR supports several programs that encourage giving back to the community. For example, the firm launched its 40 for 40 volunteer program on the 40th anniversary of its founding. The program provides employees with 40 hours of paid time to volunteer with worthy community causes.
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The Carlyle Group Review
The Carlyle Group is an international alternative asset manager that has $178 billion assets under management, which includes $61 billion under the firm’s private equity division. The group was founded in 1987 in Washington, D.C. and now has 36 offices in North America, South America, Europe, the Middle East, Asia, and Australia. These numbers were available on Carlyle’s website as of June 13, 2016.
Key Factors That Enabled This Firm to Rank as a Top Private Equity Firm
Below are primary reasons we selected The Carlyle Group to be rated as one of the top private equity firms.
Company Snapshot
Carlyle operates across four divisions, including corporate private equity, real assets, global market strategies, and investment solutions. The company staffs more than 1,650 professionals across all of its corporate segments.
Currently, more than 1,700 investors from 79 countries work with Carlyle. Investors come from a wide range of backgrounds, including individuals, unions, and corporations.
Industry Awards
The Carlyle Group has been awarded several distinctions from various bodies. Some of its industry awards include:
- 2015 VC Circle: Special Jury Award for Consumer Company of the Year (Tirmala Milk Products)
- 2015 Buyouts Magazine Award: European Deal of the Year (Sermeta)
- 2015 Private Equity Africa: Best Fundraiser in Africa, Best Mid-Cap Deal for J+J, Best PE Firm in Africa
- 2015 Private Equity International: #1 Firm in PEI 300 list of Private Equity Firms in the US
- 2015 Forbes China Best PE Firms: One of China’s Best 30 PE Firms
- 2015 Private Equity Exchange & Awards: Silver for Best Global Private Equity Fund and Best European Mid-Market LBO Fund
- 2015 Finance Asia Achievement Awards: Best Private Equity Deal (Carlyle’s partial divestment of Ganji.com)
Above is a list of distinctions awarded in 2015. Check out Carlyle’s website to view awards listed in previous years.
Investment Portfolio
Carlyle has posted its private equity investment portfolio on its website. Go there to learn more about the firm’s investments.
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TPG Capital Review
TPG Capital is a global investment firm that engages with private equity, credit, real estate, hedge funds, and affiliates.
Its private equity division has several arms, including TPG Capital, TPG Capital Asia, TPG Growth, TPG ART, TPG Biotech, and Pace Holdings. Offices are located in the Americas, Asia, Europe, and Australia.
Key Factors That Enabled This Firm to Rank as a Top Private Equity Firm
Below are primary reasons we selected TPG Capital to be rated as one of the top private equity firms.
Sustainability
TPG’s Environmental, Social, and Governance team works closely with companies with which it invests to establish environmentally-friendly operating initiatives.
TPG also forges a long-term relationship with those companies upon completion of the investment relationship and promotes environmentally sustainable practices.
Community Involvement
TPG considers community involvement an important part of its interaction with the communities where offices are located. Firm employees volunteer in their communities in firm-sponsored events as well as with their own individual activities. In fact, TPG employees participate as board members on more than 50 nonprofit boards across the world.
Some charitable organizations with ties to TPG or its employees include:
- California Academy of Sciences
- America Needs You (ANY)
- St. Anthony’s
- Duniya Center for Arts and Education
- Common Sense
Portfolio
TPG posts its investment portfolio online. The portfolio is sortable by industry, platform or region. Check out its website to learn more about its investments and strategies.
Conclusion – 7 Best Private Equity Firms
There is a lot to consider when researching private equity firms. Whether simply for educational value or for a practical financial purpose, understanding private equity firms and their investments is no simple matter.
This list has provided a brief breakdown of some of the largest private equity firms globally. Hopefully, this article has offered some insight into what a private equity firm is and how they invest in particular asset classes.
Be sure to check out the websites and do your own research as well. Most of these firms have posted their portfolios online, and it can take days to fully read and understand everything. Check out the portfolios yourself to learn more about specific investments and their results.
AdvisoryHQ (AHQ) Disclaimer:
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
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