The Top 10 Biggest Private Equity Firms in the World

Highlights Sep.27,2022 00:00

The largest private equity firms in the world manage billions of dollars of capital.

After a booming year of deals in 2021, the market has slowed significantly so far in 2022. The end of the current business cycle will likely bring an end to record-setting private equity performance. Investors have become increasingly uncertain about the outlook for i interest rates, economic growth and asset valuations. Data from the first half of 2022 revealed a sharp decline in private equity exits and deal volumes. Still, global private equity firms generated $512 billion in buyout deal value during the first half of 2022, with an average deal size of about $1 billion. Here's a look at how private equity works and the top players in the private equity world.

How private equity works

Private equity firms raise capital from pensions, endowments, sovereign wealth funds and other institutions and use this capital to invest in private companies. These private companies do not trade on the public stock market, making them inaccessible to the typical retail investor. Private equity firms often implement structural or strategic changes to underperforming businesses to help streamline their performance and potentially increase their valuation. Once a company's business metrics improve, the PE firm can then sell the business to public investors for a profit via an initial public offering. PE firms refer to these sales as exits. Private Equity International recently released its annual PEI 300 list of the top private equity firms in the world based on money raised over the past five years. Here are the 10 private equity firms that topped this year's PEI 300 list.

KKR & Co. Inc.

KKR took over the top spot as the top private equity firm in the world in 2022. As of the end of June, KKR has $491 billion in assets under management, or AUM, and holds a total of 121 companies in its private equity funds. Those companies generate a total of about $223 billion in annual revenues. KKR's cumulative gross internal rate of return, or IRR, since its inception in 1976 is 25.6% compared to just an 11.7% average annual return for the S&P 500 in that time. The PE firm went public via an in 2010 and its stock is up more than 350% in the roughly 12 years since. KKR has raised $126.5 billion in capital in the past five years.

Blackstone Inc.

KKR dethroned Blackstone as the top private equity firm on this year's list. Blackstone has roughly $941 billion in AUM, including $320 billion in real estate, $276 billion in private equity investments, $80 billion in solutions, and $265 billion in credit and insurance investments. As of the end of June, the firm had $127 billion in corporate private equity AUM, $36 billion in available capital to invest and 115 private equity portfolio holdings, including Candle Media, Transmission Developers and Ancestry. Blackstone also went public via an IPO back in 2007, and its stock has generated a more than 900% total return over the past decade. Blackstone has raised $82.5 billion in capital in the past five years.

EQT Partners AB

EQT is a PE firm based in Sweden, and it made headlines earlier this year by announcing a planned $7.5 billion of Hong Kong-based PE firm Baring Private Equity Asia. EQT estimates Asia will account for 42% of global GDP growth and 85% of new members of the global middle class by 2030. EQT reported about $76 billion in AUM as of the end of the second quarter, but that number is expected to grow to nearly $100 billion after the BPEA deal, which is expected to close in the fourth quarter. EQT has raised $57.3 billion in capital in the past five years.

CVC Capital Partners SA

CVC Capital Partners is a Luxembourg-based alternative investment manager focused on private equity, secondaries and credit. CVC was originally founded as part of Citigroup Inc.'s business. The firm has $131 billion in AUM, including $87 billion in private equity AUM. CVC has more than 500 global, blue-chip clients and is invested in more than 120 companies around the world. CVC Capital Partners was planning to conduct an IPO in summer 2022, but the firm told analysts earlier this year that it is delaying its IPO until later in 2022 or early in 2023 due to the difficult IPO market. CVC Capital has raised $55.4 billion over the past five years.

Thoma Bravo LLC

Thoma Bravo is a Chicago-based PE firm focused on investing in software and. The firm had more than $122 billion in AUM as of the end of June. More than 20 years ago, Thoma Bravo pioneered the buy-and-build investment strategy of expanding a company's operation in a given direction by acquiring other companies with established expertise in that area. Thoma Bravo has invested in more than 400 software companies representing more than $220 billion in value. The company's current PE software portfolio includes more than 70 companies that generate a combined $25 billion in annual revenue. Thoma Bravo has raised $50.3 billion in capital in the past five years.

Carlyle Group Inc.

The Carlyle Group is a Washington, D.C.-based PE firm that was founded back in 1987. The firm has $376 billion in AUM, including $167 billion in PE AUM. The company's PE portfolio contains more than 270 companies in a wide range of industries, including aerospace, government services, financial services, media and Carlyle Group's total AUM was up 25% in the first half of 2022, including 34% growth in fee-earning AUM. The firm went public in 2012, and its stock has generated a total return of 120% over the past decade as of Sept. 23. The Carlyle Group also raised $19 billion in the first half of 2022 and has raised $48.4 billion over the past five years.

General Atlantic Service Co. LP

General Atlantic is a growth-focused PE firm founded in 1980 and headquartered in New York. It began as Atlantic Philanthropies, the charitable foundation of billionaire Charles Feeny. Today, General Atlantic has $64 billion in AUM, including a current portfolio of 202 companies that have a average revenue growth rate of 63%. The company emphasizes , investing, and its holdings are focused on six themes: climate, consumer, financial services, health care, life sciences and technology. Current portfolio holdings include India's ASG Eye Hospitals, specialty pharmacy PANTHERx, and business sustainability rating company EcoVadis. General Atlantic has raised $44.8 billion over the past five years.