What are private equity firms? Which are the largest PE firms in the world?

Oct 14, 2019 | 1 month ago | Read Time: 4 minutes | By iKnowledge Team

Private equity is a source of investment capital, involving individuals of high net – worth, or companies that buy shares in private organizations. Private equity firms buy shares in private entities, or public companies with the intention to take them private. To compete for the market share, the private equity firms are now placing a greater emphasis on managing regulatory change, market volatility and the risks involved.

In 2017, the investment activity grew by 65%[1] in India over 2016, leading to many experts terming this as the ‘golden age’ of private equity and venture capital, believing it to be one of the best plans for investment. This increase in investment activity has been attributed to three key reasons.

1. Structural reforms in India

2. India being the fastest growing large economy in the world

3. Increased confidence from Limited Partners (the individuals that put money into venture capital and private equity funds) [2]

Best investment plans for private companies

India is currently the fastest growing largest economy in the world and is expected to continue growing for the foreseeable future. With the increasing capital expenditure needs, and the steady growth of the economy, there is a large demand for capital, leading to increasing opportunities for foreign savings by way of private equity [3]

Largest PE firms in the world

Private Equity International, in 2017, ranked the top 10 largest private equity firms in the world, based on the capital they raised over the last 5 years, for private equity investment. Below are the largest PE firms in the world, based on the capital they raised over the five-year period.

1. The Blackstone Group

Specializing in private equity and hedge fund investment strategies, The Blackstone Group had a reported $434 billion under management [5]. Blackstone’s buyout deals earlier this year to buy Thomson Reuters also marks the biggest buyout deal in over a decade. Their five – year fundraising total amounts to $58,319.58 million.

Source: Bloomberg [6]

2. Kohlberg Kravis Roberts

Kohlberg Kravis Roberts & Co., the global investment firm manages private equity, real estate and infrastructure asset classes, among others. The firm reportedly has a total enterprise value of $545 billion [7], and their five – year fundraising total amounts to $41,623.40 million.

3. The Carlyle Group

The Carlyle Group is one of the largest private equity and alternative asset management firms on the globe, specializing in corporate private equity and real assets. As of 2017, their five – year fundraising total amounts to $40,732.73 million.

4. TPG Capital

Texas Pacific Group is one of the largest private equity investment firms on the planet, focusing mainly on leveraged buyouts, and also manages investment funds specializing in growth capital and public equity. As of 2017, their five – year fundraising total amounts to $36,051.64 million.

5. Warburg Pincus

Warburg Pincus, LLC is a private equity firm, and currently has $40 billion in assets [8] under management. Warburg Pincus invests in the ICT (information and communication technology) sectors, and as of 2017, their five – year fundraising total amounts to $30,812.05 million.

6. Advent International

Advent International is a private equity firm and has invested $40 billion in private equity capital [9] since its inception. As of 2017, their five – year fundraising total amounts to $26,951.37 million.

7. Apollo Global Management

Apollo Global Management, LLC became the second largest US – based alternative asset management firm earlier this year, managing investor commitments of over $247 billion [10]. As of 2017, their five – year fundraising total amounts to $23,998.35 million.

8. EnCap Investments

EnCap Investments is a private equity firm, that specializes in the oil and gas industry, and the total market value of all the financial assets EnCap Investments manages was estimated to be around $11.8 billion[11]. As of 2017, their five – year fundraising total amounts to $21,220.08 million.

9. Neuberger Berman

Neuberger Berman manages private equity and hedge fund portfolios for global institutional investors, and individuals of high net – worth. As of 2017, their five – year fundraising total amounts to $20,398.43 million.

10. CVC Capital Partners

CVC Capital Partners is a private equity firm, and manages over $52 billion of assets, and about $80 billion in secured commitments across Asian and European private equity, credit and growth funds [12]. As of 2017, their five – year fundraising total amounts to $19,896.65 million.

Private equity firms analyze the risk – reward profile before investing in businesses with high – growth potential. The minimum amount to invest in a private equity fund is about $1,00,000, but there are other investment ideas individuals can opt for. To know about Aegon Life’s life insurance products like term insurance and other products, visit our home page.


Citations:

[1] https://www.livemint.com/Companies/BfqbFlxsx2z2bEcQQBXrvL/Private-equity-sector-sees-record-244-billion-inflow-in-20.html

[2] https://www.bain.com/insights/india-private-equity-report-2018/

[3] https://www.bcasonline.org/ContentType/ITF%20Material/ITF-Bhavin%20Shah.pdf

[4] https://www.livemint.com/Industry/DZYKCErQomg1vBKjrCfBDO/Private-equity-investments-in-India-highest-in-2015-report.html

[5] https://en.wikipedia.org/wiki/The_Blackstone_Group

[6] https://www.bloomberg.com/news/articles/2018-01-30/blackstone-to-acquire-thomson-reuters-unit-in-20-billion-deal

[7] https://en.wikipedia.org/wiki/Kohlberg_Kravis_Roberts

[8] https://en.wikipedia.org/wiki/Warburg_Pincus

[9] https://en.wikipedia.org/wiki/Advent_International

[10] https://en.wikipedia.org/wiki/Apollo_Global_Management

[11] https://en.wikipedia.org/wiki/EnCap_Investments

[12] https://en.wikipedia.org/wiki/CVC_Capital_Partners


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