The current modern world is living in the golden age of private equity. Over the years, the Private Equity industry has delivered quite impressive market returns while giving a stable series of investment options to their clients.
What is Private Equity?
Private Equity (PE) is a kind of financing where money, or capital, is invested into an enterprise. To explain in simple terms, PE investments are made into mature businesses in traditional industries in exchange for equity, or ownership stake. PE is a larger subset of a highly complex field of the financial landscape termed as the private markets.
It is a different kind of assets class apart from real estate, venture capital, distressed securities, and more. Alternative asset classes are considered a less traditional equity investment that means they are not as easily accessed as stocks and bonds in the public markets.
Private equity deals is favored by firms because they allow them to access liquidity as an alternative to conventional financial mechanisms, such as high interest bank loans. If an organization is delisted, PE financing will be helpful for such firms to attempt unusual growth strategies away from the eyes of markets, as these organizations don’t have the pressure of publishing their quarterly earnings.
How Private Equity Works?
Private Equity industry operates in a unique part of the marketplace. Not just of taking ownership of publicly traded stocks or bonds, PE can buy up whole organization and look to enhance and optimize its performance. This ownership aspect, plus having access to assets that aren’t publicly traded, can be useful for the industry to achieve major returns when compared to the public market variations.
Institutional investors such as pension funds, endowments and sovereign wealth funds are fastening-up to deploy capital into private equity investments in recent years to reap benefits of these essential special traits.
Read more about how to structure a private equity deal
Largest Private Equity Firms in the World
Here is a list of top private equity firms where an individual can start their private equity career:
- Hellman & Friedman LLC
Hellman & Friedman LLC is a San Francisco-located private equity industry, which is functioning in this business since the year 1984. It has made a name for itself with both leveraged buyouts and investments in growth-related equity investments. Hellman & Friedman has invested in more than various 100 organizations and attained more than USD 70 billion of total capital. Much of that success has been recent, with raising USD 40.9 billion over the past five years.
- General Atlantic Service Co. LP
General Atlantic is a New York-satiated PE firm formed in the year 1980 as Atlantic Philanthropies that was the charitable foundation of billionaire Charles Feeney. Over the years, it evolved into its current form as a top global private equity deals operation. It is located in many emerging markets and has developed a particular acumen for investments in India. Today, it has more than 200 portfolio organizations across six sectors. Assets under management total USD 71 billion. It continues its tradition of locating its employees in crucial technological hubs where there are several opportunities to invest in rapidly-growing growth organizations.
- Apollo Global Management LLC
Apollo Global Management LLC is considered number one PE firm globally in range of the volume of assets typically handling with private equity, credit, and real estates. They are the highly sought-after private equity firm that values customers more than everything else. Several individuals choose this firm for their private equity career.
With an experience of 24 years, during which they have added many values to the customers and earned an incredible reputation. The managing partners are working collaboratively and they have a unique team of 353 members who are dedicated to investment. Their offices are present globally from New York to Chicago to London to Delhi.
They value cultural diversity and functions as a dynamic team for their clients.
They showcases as “contrarian, value-oriented” investors, and their work is evident. Their team operates from building a developed country that helps them become one of the world’s most customer-oriented private equity firms.
- Insight Partners LP
Insight Partners LP is another big private equity firm, which is present in New York and was founded in the year 1995 with specialization in early-stage tech investing. It has been involved in high-profile tech organizations such as both Shopify Inc. (SHOP) and Twitter.
In total, Insight Partners has invested in more than 600 various organizations with greater than 55 of these ultimately gaining a completed IPO. It has continued to have success and raised a gigantic USD 20 billion and also a USD 40.1 billion in fundraising over the trailing five years.
Apart from the above-mentioned firms there are few many other PE firms, such as:
- Warburg Pincus LLC
- KKR & Co. Inc.
- The Blackstone Group Inc.
- Neuberger Berman Group LLC
- The Carlyle Group Inc.
- Bain Capital LP
- CVC Capital Partners
- Vista Equity Partners M
- EQT AB