Private equity firms manage investment capital obtained from institutional investors or high net worth individuals (HNWI) to acquire equity ownership of companies through a variety of strategies, including leveraged buyouts and venture capital. 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.
A report by Private Equity International (PEI) ranked the top 300 firms based on total private equity fundraising over the five-year period ending on April 1, 2020. These are the top 10 private equity firms, according to that report. Readers should note that private equity AUM may be a subset of a company's total assets under management. We report private equity AUM in the list below where available.
- 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.
- 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 and success in returning gains to investors.
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 $619 billion in total assets under management (AUM).
The company invests across a broad range of market sectors, including energy, retail, and technology. While private equity ($103 billion) 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 95 portfolio companies are financial data provider Refinitiv, electric power transmission products company Gates Corp., and theme park operator Merlin Entertainments.
2. The Carlyle Group Inc.
The Carlyle Group Inc. (CG) has a total AUM of $256 billion, employs over 1,800 professionals worldwide, and operates through 29 offices located in North America, South America, Europe, Africa, the Middle East, Asia, and Australia.
The company was founded in 1987 and is headquartered in Washington, DC. Its corporate private equity unit has AUM of $90.7 billion, and notable current holdings include Chesapeake Energy Corp., The Nature's Bounty Co., and Orion Breweries Ltd. of Japan.
3. KKR & Co. Inc.
KKR & Co. Inc. (KKR), formerly Kohlberg Kravis Roberts & Co., has a total AUM of $252 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 (LBOs), 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., Gardner Denver, Optiv, and PetVet.
4. TPG Capital
TPG Capital, formerly known as the Texas Pacific Group, has a total AUM of $85 billion. Founded in 1992 by David Bonderman and Jim Coulter, TPG Capital is headquartered in San Francisco, California. The company has 14 additional offices in Europe, Asia, Australia, and other parts of North America.
Among the firm's noteworthy transactions are its buyout of Continental 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 Ducati.
5. Warburg Pincus LLC
Warburg Pincus LLC has over $58 billion in total AUM, invested in more than 195 companies, with particular exposure to China. 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 14 offices in 11 countries.
Private equity firms provide financial backing to startups and to non-public companies. For example, after Airbnb had to postpone its original plans for a 2020 initial public offering (IPO) due to the global pandemic caused by the Covid-19 virus, the company raised more than $1 billion in private equity funding.
6. Neuberger Berman Group LLC
Neuberger Berman Group LLC has $405 billion in total AUM, including $73 billion in private equity. Citing more than 30 years of experience in alternative investments, Neuberger Berman employs more than 160 professionals in the field in seven locations worldwide.
7. CVC Capital Partners
CVC Capital Partners has nearly $109.1 billion of total AUM; CVC's private equity platforms manage $82 billion of assets. Founded in 1981, CVC employs over 525 people, including 250 investment professionals, in 23 offices worldwide. Its private equity portfolio includes 84 companies from across the globe.
Based in Sweden, EQT AB has a total AUM of 52 billion euros, or nearly $63 billion at the current exchange rate. Founded in 1994, the firm has more than 700 employees in 17 countries across Europe, North America, and the Asia-Pacific region. Flying Tiger Copenhagen is its best-known portfolio company among U.S. consumers.
9. Advent International
Based in Boston, Massachusetts, Advent International has $66 billion in AUM. Advent, founded by Peter Brooke, was a spinout from TA Associates. Advent raised its first fund in 1985—a $14 million corporate venture capital program for Nabisco.
The firm raised its first European fund in 1989 and opened its London office. Later, in the 1990s, the company opened additional offices in Frankfurt, Milan, Argentina, Mexico, and Brazil. Today, the company has offices in 15 countries, including Asia, South America, and Europe. Advent employs over 470 employees.
10. Vista Equity Partners
With over $73 billion in assets under management, Vista Equity Partners invests in software, data, and technology-enabled organizations, exclusively. The company has strategic investments across companies in healthcare, event ticketing, advertising, and risk management, among other industries. In September of 2019, Vista closed a $16 billion technology fund, the largest fund ever raised by an independent PE firm.
Largest Private Equity Firms FAQs
Which Private Equity Firms Pay the Most?
Private equity is a very lucrative career. According to a Heidrick & Struggles survey, in 2019 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 AUM.
For partners and managing directors, the total average pay in 2019 ran from $596,000 to $2.2 million, 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 H1B 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 upwards of $400,000 per year.
Is Bain Capital Prestigious?
Bain Capital was founded in 1983 and is based in Boston. The company employs over 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 the junior United States senator from Utah since 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 VP in Private Equity Make?
In private equity, your total compensation typically depends on the AUM of the firm you are working for. 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, Blackstone Group, Carlyle Group, and 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 re-invest those funds in order to seek the biggest possible profits. The nature of the private equity industry is risky, as firms often engage in large acquisitions and controversial leveraged 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.