What Are the Four Biggest Private Equity (PE) Firms In London
The four largest private equity (PE) firms headquartered in London have been ranked by Private Equity International based on how much capital they have raised over the last five years. For 2019, they are: CVC Capital Partners, Apax Partners, Permira Advisors, and Bridgepoint. Here, we profile London's most prominent PE firms.
- London is a global financial hub and a hotbed for private equity investments.
- Private equity is a facet of high finance that invests in privately held firms and arranges leveraged buyouts or venture capital investments.
- For 2019, the most prominent private equity firms in London are CVC Capital Partners, Apax Partners, Permira Adviors, and Bridgepoint.
Understanding Private Equity Firms
Private equity (PE) firms provide investment capital and investment management services. PE firms raise investment capital from individuals and institutional investors, such as pension funds, to fund equity investments in companies either through direct purchase of an equity stake in private companies or through leveraged buyouts (LBOs) of publicly traded companies. PE firms often obtain an equity interest by providing venture capital, sometimes in partnership with other PE firms.
Once it acquires a controlling interest in a company, a PE equity firm then directs the management of the acquired company with the ultimate goal of substantially increasing the company’s value so it can be sold for a profit. PE firms often specialize in investments in particular industries or market sectors. A PE firm’s portfolio is composed of companies it has acquired or in which it holds a substantial equity interest. The investment horizon for most PE firm investments is five to 10 years.
CVC Capital Partners
Founded in 1981, originally as an investment division of Citigroup, CVC Capital Partners subsequently managed its own LBO. It has over $82.4 billion in AUM as of 2020, making it the largest PE firm based in London, and one of the 10 largest PE firms worldwide.
CVC Capital engages in a broad range of PE investing, including venture capital investments, LBOs, recapitalization, and acquisitions. The firm invests primarily in large-or medium-sized companies engaged in market sectors that include technology, telecommunications, financial services, health care, energy, and the industrial sector. CVC also invests in infrastructure in Europe, such as public utilities and transportation.
Primary geographical focuses for CVC’s investments, in addition to Europe, are North America, the Middle East, Asia, specifically Hong Kong and Singapore, and Australia. For CVC's European and Americas' private equity strategy, typical enterprise values are between €500 million and €5 billion. CVC usually holds an investment for a minimum of five years. It prefers to have a seat on the board of directors of the companies in its portfolio. CVC Capital also operates a private debt firm, CVC Credit Partners, that invests in debt securities of companies principally owned by private equity funds.
As of May 2020, CVC’s portfolio has 86 companies in its portfolio with large interests in retail, service, and manufacturing businesses. Some of its portfolio holdings include Alvogen, a pharmaceuticals company; Breitling, the luxury watchmaker; and Petco, the petfood supplies retailer. CVC Capital Partners operates globally, with approximately 23 offices spread throughout Europe, the United States, and Asia.
Apax was originally a venture capital business. In the 1980s and early 1990s, the company was a leader in U.S. and European investments. The firm began to specialize in specific sectors to grow country funds in the United Kingdom, Germany, the United States, and Israel.
From 1993, Apax began to invest in buyouts. Country teams merged to create regional funds. The company continued to focus on pure-play LBOs with a sector focus. The company has aggregate commitments to buyout funds raised since 2005 of €30.8bn ($35.2bn). Apax opened offices in China in 2005 and 2008, and India in 2006.
Apax Partners typically invests in large companies across four global sectors: Tech and telco, services, healthcare, and consumer goods. The firm has a global network of seven offices in three continents and employs over 220 people. As of May 2020, Apax Partners had a total of $50 billion in funds raised.
Bridgepoint Capital Group was founded in 1984 and has approximately $20 billion in AUM. Bridgepoint states it aims to be a bridge between buyouts and successful, long-term growth for the companies in which it invests. The firm’s primary focus is on the acquisition of majority equity interests in middle-market European companies engaged in providing financial, consumer, business, and healthcare services. The company invests in market-leading companies valued up to €1 billion. Geographically, its investments are primarily located in the United Kingdom, France, Germany, Italy, Turkey, China, and Switzerland. The company invests in six principal sectors: business services, consumer, financial services, healthcare, manufacturing and industrials, and media and technology.
The Bridgepoint Capital investment portfolio is composed of almost 60 companies. It includes a diverse selection of businesses. Among Bridgepoint’s portfolio holdings are Burger King, Casino France Operations, and sports apparel maker Fat Face. One of Bridgepoint’s notable accomplishments was acquiring, in 1999, a 50% share in 13 of London’s West End Theatres through its equity interest in Andrew Lloyd Webber’s Theatre Group.
Bridgepoint’s investor base includes pension funds, asset managers, and insurance companies. A subsidiary of Bridgepoint Capital, Bridgepoint Development Capital, invests in small-cap companies valued from between £30 million and £200 million. In addition to its London headquarters office, Bridgepoint has 12 offices in Europe, the United States, and China.