Private equity firms invest in the equity of private companies, meaning those not publicly traded on an exchange. They deploy a variety of strategies to make these investments. With a leveraged buyout, a private equity firm uses borrowed money to invest in a company; the target company's cash flow serves as collateral. Venture capital is another type of private equity investment. With venture capital, a private equity firm provides capital to a startup or small business, usually one developing a new or unseen idea or technology, in exchange for an equity stake in the company. Growth capital is similar to venture capital, but rather than targeting a new company, the private equity firm invests in a mature company attempting to grow or restructure.

Regardless of the specific strategy used, the goal of a private equity firm is to seek out promising companies with high-growth potential and to acquire equity in those companies. Though the concept is rather simple, the layperson has long considered private equity to be somewhat esoteric. In fact, this investment type rarely worked its way into the public discourse until Mitt Romney's two presidential runs in 2008 and 2012. Romney was a co-founder of Boston-based Bain Capital, one of the world's largest and most well-known private equity and venture capital firms. This firm is one of the big reasons Boston is considered a stronghold for private equity, but it is not the only reason. The following four companies are the biggest private equity firms in Boston.

Bain Capital

Perhaps the only company on this list that is a household name, Bain Capital, with $95 billion in assets as of 2018, is by far the largest private equity firm in Boston. One of its founders was Mitt Romney, who went on to serve as governor of Massachusetts, CEO of the 2002 Winter Olympics in Salt Lake City, and Republican presidential nominee in 2012.

Romney and his two partners founded the company in 1984 and spent the following year raising $34 million, which they used to make the company's initial investments. Their start was inauspicious; Romney became so discouraged at one point in 1985 he considered closing the operation. Bain caught its first big break, however, with an investment in a struggling office supply retailer called Staples. With Bain sitting on a large equity stake, Staples went public in 1989 and grew rapidly in the 1990s. The deal launched Bain into the top strata of private equity firms.

HarbourVest Partners

HarbourVest Partners started in 1982 as a subsidiary of John Hancock Insurance. The company specializes in venture capital and leveraged buyouts, its target market being financial institutions. Additionally, HarbourVest Partners has teamed up with other private equity firms over the years to make several large secondary market transactions, including the purchase of over $2 billion in funds from the California Public Employees' Retirement System, or CalPERS.

The firm segments its investing activities into many different types, employing specialized teams to handle each type. These subcategories include U.S. venture capital, U.S. buyouts, Europe, Asia, Latin America, and a separate group for emerging markets. HarbourVest has also launched a division exclusively dedicated to investments in clean energy and clean technology companies. Diversification and flexible asset allocation have kept the company's portfolio on solid footing throughout a variety of economic climates. As of 2018, HarbourVest has $50 billion in total assets.

TA Associates

Founded in 1968, more than a decade before Bain Capital, TA Associates has been involved in over 500 investments and, as of 2018, has assets of $20 billion.

The 1970s marked the firm's first big growth period, going from under $5 million to over $125 million in assets. TA Associates achieved this growth through investment activity in a diverse array of industries, including healthcare, consumer products, and financial services. Some of the company's most successful investments include Biogen, ImmunoGen and Digital Research.

Kevin Landry, who became a partner of TA Associates in 1972 and served as its CEO from 1984 until retiring in 2012, is credited with much of the company's growth and success. Despite being business rivals for much of their careers, Landry and Mitt Romney maintained strong mutual respect. Landry was one of the biggest donors to Romney's campaign in 2012.

Summit Partners

Summit Partners was founded the same year as Bain Capital, 1984. Its primary investment arenas are technology and health care. Some very well-known tech startups grew with the help of investment dollars from Summit Partners. These include Answers.com, AVAST, McAfee and WebEx. The firm's largest healthcare investments include Lincare, Pediatrix and Physicians Formula. Summit Partners was also an early investor in Snap Fitness, a gym chain distinguished by its low monthly rates, no-frills business model and 24-hour key card access for members.

As of 2018, Summit Partners has total assets of $14 billion. In addition to its Boston headquarters, the firm maintains regional offices in London and Menlo Park, California.