Private equity firms manage investment capital obtained from institutional investors or high-net-worth individuals (HNWIs) to acquire equity ownership of companies through a variety of strategies, including leveraged buyouts and venturecapital. Private equity firms operate with long-term investment horizons, typically five to seven years.
After obtaining an equity interest in a company, the private equity firm looks to eventually profit through either selling the company outright or through an initial public offering (IPO). When especially large investments are required, these firms often partner with other private equity firms to raise the necessary capital and to reduce their risk. Most firms specialize in one or more industries or investment strategies where they have particular expertise.
Here are 10 of the top private equity firms. Readers should note that private equity assets under management (AUM) may be a subset of a company’s total AUM. We report private equity AUM in the list below where available.
Key Takeaways
- Private equity is an alternative form of private financing, occurring away from public markets, in which funds and investors directly invest in companies or engage in buyouts of such companies.
- Private equity investments are typically available only to high-net-worth individuals (HNWIs).
- Private equity can take on various forms, from complex leveraged buyouts to venture capital.
- Private equity firms are typically ranked by their assets under management (AUM) and success in returning gains to investors.
- The Blackstone Group Inc. had the most AUM of the firms in this list as of the end of the first quarter 2022.
1. The Blackstone Group Inc.
Founded in 1985 and headquartered in New York, with offices in London, Hong Kong, Beijing, and Dubai, The Blackstone Group Inc. (BX) leads with $941 billion in total AUM.
The company invests across a broad range of market sectors, including energy, retail, and technology. While private equity is its largest category of investments, Blackstone also has hundreds of billions of dollars in holdings in real estate, credit, and hedge fund solutions. Among its portfolio companies are financial markets data and infrastructure provider Refinitiv, digital family history services provider Ancestry, and dating and social networking apps owner and operator Bumble.
2. KKR & Co. Inc.
KKR & Co. Inc. (KKR), formerly Kohlberg Kravis Roberts & Co., has total AUM of $479 billion. Founded in 1976 and headquartered in New York, KKR is known for being one of the first firms to engage in large-scale leveraged buyouts, which are still one of the firm’s specialties.
Among the firm’s noteworthy transactions are its 1989 leveraged buyout of RJR Nabisco and its 2007 buyout of TXU, the largest leveraged buyout on record. Among its current portfolio holdings are Fiserv Inc., Optiv, and PetVet.
3. CVC Capital Partners
CVC Capital Partners has nearly $127 billion of total AUM, and its private equity platforms manage $87 billion of assets. Founded in 1981, CVC has 25 offices worldwide. Its private equity portfolio includes more than 110 companies around the globe.
4. The Carlyle Group Inc.
The Carlyle Group Inc. (CG) has a total AUM 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. Its corporate private equity unit has AUM of $167 billion. and notable current holdings include Supreme and Workforce Logiq.
5. Thoma Bravo
Thoma Bravo has $114 billion AUM and more than 40 years of experience in providing capital and strategic support to experienced management teams and growing software and technology companies. Some of the most notable companies in its portfolio include McAfee, Conga, and Anchorage.
Private equity firms provide financial backing tostartups and companies that are not traded on public stock exchanges.
6. EQT
Based in Sweden, EQT A.B. (EQT.ST) has a total AUM of 73.3 billion euros, or nearly $81.7 billion at the exchange rate as of this writing. Founded in 1994, the firm has approximately 1,200 employees in 24 countries across Europe, North America, and the Asia-Pacific region. Flying Tiger Copenhagen is perhaps its best-known portfolio company among U.S. consumers.
7. Vista Equity Partners
With more than $86 billion in AUM, Vista Equity Partners invests exclusively in software, data, and technology-enabled organizations. The company has strategic investments across companies in healthcare, advertising, and risk management, among other industries. 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 a total AUM of $109 billion. Founded in 1992 by David Bonderman and Jim Coulter, TPG Capital is headquartered in San Francisco. The company has 12 additional offices across eight countries.
Among the firm’s noteworthy transactions are its buyout ofContinental Airlines in 1993, its acquisition of Petco in 2000 (with Leonard Green and Partners), and its leveraged buyout (along with Bain Capital and Goldman Sachs Capital Partners) of Burger King in 2002. Among its current portfolio holdings are Chobani, Fender, and Airbnb.
9. Warburg Pincus LLC
Warburg Pincus LLC has more than $73 billion in total AUM, invested in more than 235 companies. The firm’s roots are in E.M. Warburg & Co., founded in 1939, and Warburg Pincus was established in 1966. Headquartered in New York, it has offices in 13 countries.
10. Neuberger Berman Group LLC
Neuberger Berman Group LLC has $460 billion in total AUM, including $70 billion in private equity. Citing more than 25 years of experience in alternative investments, Neuberger Berman employs more than 648 professionals in the field in 25 countries worldwide.
Which private equity firms pay the most?
Private equity is a very lucrative career. In 2019, according to a Heidrick & Struggles survey, 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).
Our research found that the total average pay in 2019 ran from $596,000 to $2.2 million for partners and managing directors, depending on the firm’s AUM. Average compensation for associates and senior associates was less variable across firm sizes, ranging from $193,000 to $315,000.
According to the H1B Database, which compiles the base salaries of all U.S. employees under the common H-1B visa, in 2019, the firms that paid the highest figures for an associate position were Apollo Global Management, KKR & Co., and Brookfield Asset Management. An associate is typically the lowest-ranking employee at a private equity firm. They are typically in their mid- to late 20s and have a prior background in investment banking, consulting, or other deal-related financial services.
Peak Frameworks is a finance career prep platform founded by private equity and investment banking professionals. Peak Frameworks reports that Apollo Global Management is frequently reputed to be the highest-paying private equity firm in terms of all-in compensation, paying their associates upward of $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 employees at its global offices. Bain is well-known in large part as a result of its co-founder: Mitt Romney, who was the 2012 Republican presidential nominee. He has served as thejuniorU.S. senatorfromUtahsince 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 retail, restaurants, and other consumer brands.
How much does a vice president in private equity make?
In private equity, your total compensation typically depends on the AUM of the firm for which you work. Firms that have larger AUMs usually pay their vice presidents more.
According to the 2020 North American Private Equity Investment Professional Compensation Survey by Heidrick & Struggles, those in the vice president position at firms with an AUM of less than $500 million had a mean total cash compensation of $329,000 in 2019. For firms with an AUM of $10 billion to $19.99 billion, the mean total cash compensation was $592,000.
Which private equity firms are publicly traded?
The four largest publicly traded private equity firms are Apollo Global Management (APO), The Blackstone Group (BX),The Carlyle Group (CG), andKKR & Co. (KKR).
Alternatively, Advent International, Bain Capital, TPG Capital, and Warburg Pincus are all private companies.
The Bottom Line
Professional investors at private equity firms raise a large fund (usually from affluent investors) and reinvest those funds to seek the biggest possible profits. The nature of the private equity industry is risky, as firms often engage in large acquisitions and controversialleveraged buyouts. It is also not totally unheard of for private equity firms to lose billions of dollars or for the firms to fold completely. However, the firms in this article have all emerged as the largest and most successful private equity firms.
