HE TOP TEN PRIVATE EQUITY FIRMS WORLDWIDE

Rebounding from a horrific 2008, these 10 firms dominate the world of private equity.

Investors found little shelter in private equity funds during the aftermath of the financial crisis. Many funds suffered major write-downs in their portfolio holdings, while the largest struggled to secure financing for buyouts. But performance improved in 2009, according to returns released in June by London-based Preqin, an alternative-assets research and consulting firm. Net asset values rose an average 13.5 percent for the year, nearly recovering from a 15.8 percent drop in 2008. Here are the 10 largest private equity firms ranked by aggregate capital raised over a 10-year period ending June 2010, according to Preqin.

01 GOLDMAN SACHS PRIVATE EQUITY

$121.9 BILLION

Goldman may be best known for banking, but its private equity group employs a range of strategies including buyout, fund of funds, distressed debt and real estate funds. These funds focus on large, high-quality companies with strong management. One recently announced deal was the sale of Michael Foods, based in Minnetonka, Minn., from affiliates of Thomas H. Lee Partners to affiliates of GS Capital Partners. The deal valued Michael Foods, the largest producer of egg products in North America, at $1.7 billion. goldmansachs.com, 212.902.8848

02 BLACKSTONE GROUP

$74.9 BILLION

Blackstone’s private equity funds roam Asia, Australia, Europe and North America with a focus on buyout, distressed debt, real estate and infrastructure deals. This publicly traded company reported a $360 million profit during the first quarter of the year, versus an $82 million loss for the same period in 2009. “We are witnessing a positive trend in most asset classes as the economic recovery takes firmer root and the outlook for growth improves,” chairman and CEO Stephen A. Schwarzman said in April. “We are seeing concrete signs of economic improvement in our portfolio, and as a result, the carrying value of investments in Blackstone funds rose meaningfully in the first quarter.” blackstone.com, 212.583.5000 

03 CARLYLE GROUP

$62.6 BILLION

David M. Rubenstein, co-founder and managing director of the Carlyle Group, credited the firm’s financial strength, diversity, sector expertise and geographic diversity for helping its260 portfolio companies weather the recession and “tectonic” changes in private equity in 2008 and 2009. “Deals were fewer and smaller, equity was up and debt down, fundraising was difficult, distributions were minimal and full exits were scant,” Rubenstein said in a statement in May. “But in the latter half of 2009, fear gave way to cautious optimism. ”Carlyle Group funds focus on buyout, venture, distressed debt and special situations in regions including Asia, the Middle East and South America. carlyle.com, 212.813.4900

04 TPG

$53 BILLION

Formerly known as Texas Pacific Group, TPG follows an investment philosophy built around creating value by investing in change created by industry trends, economic cycles or specific company situations .Funds focus on buyout, distressed debt, bridge and venture strategies. One recent deal includes TPG’s purchase of IMS Health, together with the CPP Investment Board, during the fourth quarter of2009. TPG’s other healthcare investments have included Axcan Pharma, Biomet and Fenwal.tpg.com, 817.871.4000

 05 KOHLBERG KRAVIS ROBERTS

$46.7 BILLION

Kohlberg Kravis Roberts’ emphasis on buyouts helped the publicly traded private equity firm capture a $674.8 million profit during the first quarter of this year. In reporting first quarter earnings KKR noted that the value of one of its portfolio companies, the hospital operator HCA, had nearly doubled from its cost, off setting others such as First Data Corp. that fell by more than a third during the same period. Henry Kravis and George Roberts founded KKR in 1976. kkr.com, 212.750.8300

06 OAKTREE CAPITAL MANAGEMENT

$45.2 BILLION 

Howard Marks, chairman of Oaktree Capital Management, sounded a cautionary note in his May chairman’s memo: The improving economy was making investing more difficult. “The pendulum has moved away from the depression, panic, skepticism and excessive risk aversion we saw in the fourth quarter of 2008, and with the disappearance of those characteristics have gone the great bargain opportunities,” he wrote. Oaktree’s private equity funds include distressed debt, mezzanine, buyout and real estate. oaktreecapital.com, 213.830.6300

07 BAIN CAPITAL

$38.2 BILLION

Bain Capital’s private equity funds focus on buyout, mezzanine and venture strategies. Since its founding in 1984, Bain Capital and its affiliates have invested in more than 300 companies including SunGard, Staples, Double Click and Linked In. Most recently it was reported to be a contender, along with Blackstone, KKR and TPG, to take over RadioShack. baincapital.com, 617.516.2000

 08 CVC CAPITAL PARTNERS

$37.7 BILLION

Many private equity funds struggled to attract investors in 2009, the worst fundraising year since2004; 482 funds worldwide raised $246 billion, a 61 percent decline from the $636 billion gathered in2008. But the buyout-focused private equity shop CVC Capital Partners nevertheless managed to raise the largest amount in 2009 when it closed its fifth buyout fund at about $15 billion. In May CVC used some of that money to help launch Irish jet-leasing company Avalon. cvc.com, 44.20.7420.4200

09 APOLLO MANAGEMENT

$34.2 BILLION

Founded in 1990, Apollo Management focuses on buyout, mezzanine and distressed debt private equity funds. Its better-known portfolio companies include Harrah’s Entertainment, the world’s largest casino operator, and AMC Entertainment. Last spring Apollo moved aggressively to take over CKE Restaurants, operator of Carl’s Jr. and Hardee’s fast food joints. apolloic.com, 212.515.3450

10 APAX PARTNERS

$32 BILLION

Apax Partners oversees venture, balanced and buyout private equity funds and invests primarily in five sectors: technology and telecom, retail and consumer, media, healthcare and financial, and business services. One recently announced deal is the purchase of a majority interest in the technology data protection firm Sophos; the transaction valued the company at $830 million. apax.com, 44.20.7872.6300


Source: Worth Magazine