|
|
You might be using an unsupported or outdated browser. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website. |
Reviewed
Private equity is one of the most potent forces in the world of finance. PE firms buy companies and participate actively in their businesses to help them grow and achieve their full potential.
These investment firms operate in some of the most dynamic sectors in the economy, particularly technology, and they foster innovation that has a deep impact across the economy. The U.S. dominates the private equity industry globally, and private equity firms control more than $6 trillion in assets in the U.S.
The following list ranks the top ten U.S.-based private equity firms based on assets under management as of the end of the first quarter of 2023.
| Top U.S. Private Equity Firms | AUM |
|---|---|
|
Blackstone
|
$1.0 trillion
|
|
Apollo
|
$598 billion
|
|
KKR
|
$510 billion
|
|
The Carlyle Group
|
$381 billion
|
|
Bain Capital
|
$165 billion
|
|
TPG Capital
|
$137 billion
|
|
Thoma Bravo
|
$127 billion
|
|
Silver Lake
|
$98 billion
|
|
Vista Equity Partners
|
$96 billion
|
|
Insight Partners
|
$90 billion
|
Private equity firms, commonly called PE firms, pool investor funds to invest in or acquire companies that are not publicly traded on a stock exchange.
Typically, they take controlling stakes in these portfolio companies and work with management to improve the businesses and make them more profitable. A private equity fund may also buy out a public company, take it private and restructure it for future growth.
Once the portfolio company is operating successfully, the private equity firm exits the investment by taking the portfolio company public or selling it.
Private equity investments are largely unregulated by the Securities and Exchange Commission (SEC) since they are not traded in the public markets.
However, since the passage of the Dodd-Frank Act in 2010, large PE firms are required to provide some information about their businesses to the regulators. Nonetheless, investment opportunities for retail investors are very limited.
Private equity is part of a larger asset class called alternative investments, and investment in alternatives has typically been limited to institutions and persons deemed accredited investors by the SEC.
There are several ways to qualify as an accredited investor. Have an annual income of $200,000—$300,000 for a couple—for the past two years, maintain a net worth of $1 million dollars or more, or demonstrate “defined measures of professional knowledge, experience, or certifications” acceptable to the SEC.
Private equity firms are looking for new sources of investment as the industry matures. A recent study by Bain and Company reported that individual investors hold roughly 50% of the estimated $275 trillion to $295 trillion of assets under management globally. However, those investors are responsible for only 16% of assets under management held by alternative investment funds.
