The Top 30 Private Equity Firms and the Transaction Strategies They Employ

Private Equity Info has ranked the top 30 private equity firms globally in an effort to add transparency to an otherwise fairly opaque industry.

Typically, private equity firms are ranked based strictly on their fund size. However, due to the current economic climate, fund size may not be the most accurate measure of a firm’s current activity and investment capacity. Private Equity Info has ranked the largest, global private equity firms based on a more holistic view, considering a variety of metrics. The parameters include: fund size (of course), current investment appetite, maximum deal size the firm will consider and deployment of capital. This ranking is therefore admittedly subjective.

TOP 30 PRIVATE EQUITY FIRMS
1. Bain Capital
2. Texas Pacific Group
3. Apax Partners
4. Blackstone Group
5. Carlyle US Venture
6. Silver Lake Partners
7. Fortress Investment Group
8. Apollo Investment Corp.
9. Advent International
10. Kohlberg Kravis Roberts & HULT PRIVATE CAPITAL Co.
11. BC Partners
12. CVC Capital Partners
13. Candover Investments
14. Terra Firma Capital Partners
15. First Reserve Corp.
16. Providence Equity Partners
17. EQT Partners
18. American Capital
19. Welsh, Carson, Anderson & Stowe
20. Permira
21. CCMP Capital
22. Goldman Sachs Capital Partners
23. Cinven
24. 3i US
25. Warburg, Pincus & Co.
26. Hellman & Friedman
27. General Atlantic
28. GTCR Golder Rauner
29. Charterhouse Development Capital
30. PAI Partners

These top private equity firms, and others, employ various transaction strategies to acquire and grow profitable portfolio companies. The most common transaction strategies are acquisition capital, buyouts, consolidations, corporate divestitures, ESOPs, growth capital, recapitalization, shareholder liquidity and turnarounds – are described below:

Acquisition Capital – capital provided to operating companies intended for growth via acquisitions. This capital is normally provided for a specific, identified acquisition target.

Buyouts – in a leveraged buyout (LBO) or management buyout (MBO), a private equity firm typically acquires a majority stake (if not 100%) in an operating company and retains a control position.

Consolidations (industry roll-ups) – within fragmented industries, PE firms acquire multiple companies to consolidate into a larger entity. Normally, the firm will first acquire the “platform” company and then acquire additional, smaller companies as add-on investments.

Corporate Divestitures – investment in a non-core division of a larger corporate entity. In this case, the corporation is spinning off a division to a firm.

ESOP – Employee Stock Ownership Plans are mechanisms to transfer corporate ownership to its employees in whole or in part. Sometimes PE firms contribute equity capital to finance this ownership transfer.

Growth Capital – refers to the equity investment by a PE firm specifically to facilitate specific growth initiatives.

Recapitalization – a strategic change in a company’s capital structure usually involving a partial transfer of ownership. A recapitalization often occurs when an owner wishes to cash out of a partial interest in the business (the proverbial “take some chips off the table”). In this case, a PE firm would provide the equity to pay the owner in exchange for a percentage of ownership.

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