The Top Private Equity Firms
Rankings on Capital Raised, Assets (AUM) and Investor Returns & ROI
The Top Private Equity ("PE") Funds in the world, ranked by assets under management, investment performance, CEO leadership, and IRR and ROI for previous investments in the public and private markets. We also analyzed the private equity firms that have successfully taken companies private and then re-IPO'ed the stock (Initial Public Offering). Big firms in private equity come and go but a handful consistently show up in the top deals and grow their fund size over time for more acquisitions. Some of the PE funds on our ranking list include TPG Partners, Apollo Global, Apax Partners, Blackstone and KKR.
Here are the top five funds for private equity for investors:
#5 TPG Partners VI, $18.9B
TPG, managing a collection of funds worth $75 billion, advertises itself has a unique team of problem solvers and market pioneers at the same time. The key factor, however, is that TPG is darn good at seeing value where others might only see a downward trend or immediately negative position, even despite making big mistakes recently. This is the contrarian philosophy that drives many of the moves and strategies of TPG. It’s a big reward strategy when the approach works, making TPG a standout in the private equity world with a growing bastion of capital, skillsets, resources and even more investments to put together. Some of the more successful deals include:
$1.8 billion to take Par Pharmaceuticals private in 2012, sold to Endo International for $8 billion in 2015.
A release of an ownership stake in China Life Insurance which netted $250 million.
An ownership stake in Uber, the ride-sharing company, has created an $18.2 billion value, a 600 percent increase on TPGs initial investment of $3 billion.
TPG tripled its investment on the public offering sale of IMS Health as well.
TPG faces its biggest challenge currently in continuing its momentum in massive growth and avoiding mega-deal goofs. It has been treading carefully where the most exponential activity is occurring: technology, industrial infrastructure, media and communications, healthcare, and consumer retail. This is done with, as the old saying goes, having a hands-on approach versus working markets at a desk from a distance. The TPG reach is carried out through 17 offices that operate globally and worldwide. Seeing huge opportunity overseas, they were one of the first private equity operations from the U.S. to go into Europe and Asia simultaneously in the mid-1990s. TPG expects to maintain a top five position going forward, but they want to regain their glory days when there was no question about being the top dog in the industry.
#4 Apollo Global Management's Investment Fund VIII, $18.4B
Many might think of Apollo as a leading firm in educational training, but that’s not the company that made this list. Apollo Global Management LLC is in second place because of its investment management strategy and performance in a market world that doesn’t deal with mistakes very well. Again, like the leader of the group by fund size, Apollo Global uses a contrarian approach to investment picks, looking for runs in real estate, credit financing, and companies facing major short-term future problem in terms of viability and going forward. That has placed the equity firm repeatedly in deals with TPG and KKR. Using a holistic or integrated approach, Apollo is famous, at least in the last 25 years, for looking at both the figures as well as the reality on the ground with the businesses it gets involved in. There is still the primary focus on value creation; after all, Apollo is in this market to make money. But money doesn’t just happen with a calculator and a computer. It happens by seeing possibilities, which Apollo is extremely good at, obviously. For example, in 2013 Apollo netted $1.2 billion selling off ownership in Realogy Holdings as well as an additional $330 million unloading Berry Plastics.
#3 Apax Partners' Europe VII, 11.2B Eur
It may sound cliché’ but Apax has a winning success because it looks at each industry sector and carefully identifies investment successes that just need a boost of capital. Their insight and experience have been combined with the right opportunities, and the return has been repeatedly good for both Apax itself as well as the partners behind Apax ($29 billion in gross revenue in 2014). And the companies that have been boosted have enjoyed exponential growth as well, at the corporate, sovereign and even employee and customer level. However, Apax doesn’t spread itself too thin. They have focused their efforts in four areas: healthcare, consumer markets, services and technology/telecommunications. And their investor pool is diverse as well; pension funds make up 43% of Apax's capital, 9% is high wealth individuals, 12% from sovereign funds, and the remainder is a mix of market funds, banks, insurance companies and endowments.
#2 KKR's Fund 2006, $17.6B
Formerly known as Kohlberg Kravis Roberts, KKR has made a well-established name for itself in energy, equity, infrastructure, capital financing, real estate, hedge funding, and credit strategy. KKR is a big promotor on the long position, heavy with patience and discipline in avoiding flash pan investments and focused more on consistent returns year to year. This includes helping companies grow a partnership with KKR versus just reaping a momentary profit from their operations or sale. Additionally, KKR Capital Markets is a big player in helping and managing smaller players consolidate their private equity into bigger transactions and deals where all in the partnership succeed tremendously with the results.
A big recent success in 2014 includes the $15.3 billion sale of the remaining portion of Alliance Boots drugstore chain in Europe. KKR had already sold the first half off to Walgreens for $6.7 billion, recovering its principal investment.
Like many of the big firms in the top five, KKR puts a heavy emphasis on ensuring it has employed the best financial experts to apply its strategy in given markets and industries. From a fund management perspective, these KKR experts become regional and industry voices, examining every aspect of a given economic and geopolitical sector and identify the next trends where it will go. That combination of internal smarts and interplay with external market forces has repeatedly worked in KKRs favor.
#1 Blackstone's Capital Partners VI, $16.2B
As a private equity player, Blackstone looks for emerging markets and new entrepreneurs for much of its equity play as well as the pension market for capital and money management opportunities. For some these two areas might seem opposite ends of the spectrum, but Blackstone has successfully found a way to leverage the big dollars of pension funds with the fast, exponential growth of new startups and growing international markets.
Blackstone made waves when it bought the Hilton Hotel line for $5.6 billion in 2011 and then in 2015 sold the company for $12 billion.
In 2013 Blackstone collected a cool $1 billion letting go of positions in Seaworld and Vlasic Pickle.
Geosouthern Energy Corporation being sold to Devon Energy for $6 billion netted Blackstone a 500 percent profit over its initial $1.2 billion purchase in 2007.
Of all the private equity funds, we've ranked Blackstone (Stock Ticker: "BX") as the number one PE funds and firm in the world. Blackstone is also in the process of acquiring more real estate (commercial and residential) than any other private equity fund. Examples of the Blackstone real estate purchases include: Stuyvesant Town and Peter Cooper Village ($5.3 Billion) and BioMed Realty Trust ($8 Billion).