Here is a list of the top private equity funds, ranked by size over the last five years. The top fifty private equity funds in this list account for 75% of the world’s global buyout activity and have a total buyout power of $2.76 trillion, according to IUF.
Top 50 Private Equity Funds
1 The Carlyle Group $32.5 billion 2 Kohlberg Kravis Roberts $31.1 billion 3 Goldman Sachs Principal Investment Area $31 billion 4 The Blackstone Group $28.36 billion 5 TPG $23.5 billion 6 Permira $21.47 billion 7 Apax Partners $18.85 billion 8 Bain Capital $17.3 billion 9 Providence Equity Partners $16.36 billion 10 CVC Capital Partners $15.65 billion 11 Cinven $15.07 billion 12 Apollo Management $13.9 billion 13 3i Group $13.37 billion $ 14 Warburg Pincus $13.3 billion 15 Terra Firma Capital Partners $12.9 billion 16 Hellman & Friedman $12 billion 17 CCMP Capital $11.7 billion 18 General Atlantic $11.4 billion 19 Silver Lake Partners $11 billion 20 Teachers’ Private Capital $10.78 billion 21 EQT Partners $10.28 billion 22 First Reserve Corporation $10.1 billion 23 American Capital $9.57 billion 24 Charterhouse Capital Partners $9 billion 25 Lehman Brothers Private Equity $8.5 billion 26 Candover $8.29 billion 27 Fortress Investment Group $8.26 billion 28 Sun Capital Partners $8 billion 29 BC Partners $7.9 billion 30 Thomas H. Lee Partners $7.5 billion 31 Leonard Green & Partners $7.15 billion 32 Madison Dearborn Partners $6.5 billion 33 Onex $6.3 billion 34 Cerberus Capital Management $6.1 billion 35 PAI Partners $6.05 billion 36 Bridgepoint $6.05 billion 37 Doughty Hanson & Co $5.9 billion 38 AlpInvest Partners $5.4 billion 39 TA Associates $5.2 billion 40 Berkshire Partners $4.8 billion 41 Pacific Equity Partners $4.74 billion 42 Welsh, Carson, Anderson & Stowe $4.7 billion 43 Advent International $4.6 billion 44 GTCR Golder Rauner $4.6 billion 45 Nordic Capital $4.54 billion 46 Oak Investment Partners $4.06 billion 47 Clayton, Dubilier & Rice $4 billion 48 ABN AMRO Capital $3.93 billion 49 Oaktree Capital Management $3.93 billion 50 Summit Partners $3.88 billion
Permanent Link: Top Private Equity Funds
Tags: Top Private Equity Funds, Best Private Equity Funds, Largest Private Equity Funds, List of Private Equity Funds by Size, Biggest Private Equity Funds
Salary of Private Equity Dealmakers Could Drop 75%
The trouble in the financial sector inevitably promotes caution in the private equity industry, especially among buyout firms and some believe that this will cause major reductions in the salaries paid to dealmakers at buyout firms. Bloomberg news reports that private equity salaries could face major reductions–as high as a 75% cut–as a result of the credit crunch.
British financier Guy Hands makes the projection based on the idea that private equity deals will have a longer life than before–an average of 8 years–as firms exercise more caution. This would inevitably lead to huge cuts in the salary of private equity dealmakers who have been compensated very well in the past as more buyouts were executed. Hands believes that the current economic crisis will force private equity firms to reevaluate their strategy and focus on safer, more long-term focused deals–a sharp departure from the way buyout firms have operated up until this economic decline.
“Compensation for everyone in the financial services industry is clearly going to fall over the next few years,” Mr. Hands told Bloomberg. “This will be particularly true for private equity general partners who are having the reduction, both because of the time it takes to invest and because of the time it takes to harvest.”
The federal reserve has been actively pursuing private equity as a solution to the banking crisis. The latest and most obvious move by the Fed to attract private equity is Monday’s announcement that it will loosen regulation on how much of a bank a private equity firm can own.
The previous rules restricted non-banking entities from purchasing more than 25% stake in a bank. Now, under the new loosened regulation, buyout firms can not only own as much as one third of a bank but also are allowed to have a stronger presence in the boardroom. Previously, the Fed had resisted the idea of opening up banks to outside investors but the credit crisis has forced the Federal Reserve to consider new options in private equity.
The buyout industry possesses a lot of capital and the Fed would like to see that capital invested into the struggling banking industry. The buyout industry is estimated to hold $400 billion in capital that could be invested, according to the research company Preqin. While Monday’s announcement may heighten buyout firms’ interest in the banking sector, it is not likely that the move will fix the banking problem according to Jaret Seiberg, a financial services analyst at the Stanford Group in Washington. In a research note he wrote that “These changes are helpful, but they do not open the floodgates to private equity investments as some investors had hoped. While this could mitigate the current crisis, we see it as unlikely.” One reason that buyout firms may be skeptical about investing in the banking sector is the unsuccessful investments in banks already this year.
However, private equity firms have expressed some interest after the Federal Reserve’s recent move. But buyout firms are expected to wait until the Federal Reserve and Congress reach an agreement on a bailout plan. If private equity does invest in banks, many believe it will not be in the form of big investments in major banks, but rather smaller and middle-market banks that are less subject to the volatility of the market. It is clear that the future of the financial market will in some way be determined by private equity.
Tags: Private Equity and Banks, Private Equity Credit Crisis, Private Equity and Federal Reserve, Private Equity Firms, Private Equity and Buyouts, Buyouts and Banks
David Rubenstein is personally one of my favorite figures in private equity, as may be evident in past videos. Mr. Rubenstein is the co-founder of the Carlyle Group, since its creation in 1987 the Carlyle Group has grown into a firm that manages more than $87 billion. Rubenstein is a prominent voice in private equity, his name is almost always among the lead speakers at major private equity forums such as the Private Equity Segment of the World Economic Forum. Currently, David Rubenstein holds the position of Managing Director of the Carlyle Group.
The following interview is an interview with Mr. Rubenstein, where he appears a bit more solumn while addressing a serious subject. He offers his take on the current economic crisis, in particular the federal government’s response to the situation. An important note is that David Rubenstein suggests that private equity will have an important role in buying the assets that the government has acquired. Here is the video interview of David Rubenstein discussing the current financial market: Private Equity On Pause
David Rubenstein and President George W. Bush
A little known fact about the Carlyle Group is that President George W. Bush once held a seat on the board of directors on one of the Carlyle Group’s first acquisitions. While President Bush did not seem to be cut out for the private equity industry, he went on to greater success by becoming the governor of Texas almost immediately after leaving the Carlyle Group. David Rubenstein has a great account of President Bush’s time with the Carlyle Group:
Let me talk about a bad deal. At the beginning of Carlyle – early – we didn’t have any funds. We didn’t have any dedicated funds. And we had a deal that seemed like it would be the greatest deal since sliced bread. It was handed to us. Marriott said to us, look, we’re going to sell our airline catering business [Caterair].It’s number one in the world. Management team has been there for 10 years. We dominate all the markets and we’re not going to do an auction. We’re going to sell it to you guys ’cause some of our people [Carlyle co-founders Steve Norris and Dan D'Aniello and Bush crony Fred Malek] used to work at Marriott. You know, what could be better?
So the financing was there. And we thought, this is an easy business. So they’re going to give us a company. Number one in the world. Gold plated. Got all the equipment you need. Good management team.
Well, then the Gulf War came. And all of a sudden people stopped flying. And then those who were flying realized that they weren’t going to be getting the food that they thought they were going to get. . . . So no matter how good you think a company can be something can go wrong. We couldn’t anticipate the Gulf War. So the airline catering business has gone this way.
I mention this because it reminds us all the time we shouldn’t have hubris. You know no matter how smart we think we are or how good we are, something can go wrong. And if something seems too good in life to be true, it usually is. In this case, the only interesting thing about the deal–and we lost all our money in it. Our money and our investors’ money in it. In that deal.
But when we were putting the board together, somebody [Fred Malek] came to me and said, look there is a guy who would like to be on the board. He’s kind of down on his luck a bit. Needs a job. Needs a board position. Needs some board positions. Could you put him on the board? Pay him a salary and he’ll be a good board member and be a loyal vote for the management and so forth.
I said well we’re not usually in that business. But okay, let me meet the guy. I met the guy. I said I don’t think he adds that much value. We’ll put him on the board because – you know – we’ll do a favor for this guy; he’s done a favor for us.
We put him on the board and [he] spent three years. Came to all the meetings. Told a lot of jokes. Not that many clean ones. And after a while I kind of said to him, after about three years – you know, I’m not sure this is really for you. Maybe you should do something else. Because I don’t think you’re adding that much value to the board. You don’t know that much about the company.
He said, well I think I’m getting out of this business anyway. And I don’t really like it that much. So I’m probably going to resign from the board.
And I said, thanks – didn’t think I’d ever see him again. His name is George W. Bush. He became President of the United States. So you know if you said to me, name 25 million people who would maybe be President of the United States, he wouldn’t have been in that category. So you never know. Anyway, I haven’t been invited to the White House for any things. (Source)
If you are viewing this through e-mail subscription please click this link to view the video.
Permanent Link: David Rubenstein Interview
Tags: David Rubenstein, Private Equity Managers, Private Equity, Private Equity Manager David Rubenstein, David Rubenstein Carlyle Group.
This question of why private equity firms are not blogging at the same pace as the rest of the business world was originally by Private Equity Database’s Blog and it led to the rather long response that follows:
First, I agree that there is a certain amount of limitation placed on private equity firms because they aren’t promoting or offering a product as well as just how vast private equity investing ranges by industry, size etc. So the nature of the business kind of inhibits blogging.
Second, private equity initially spent a great deal of effort trying to escape the public attention rather than attract it. So opening a blog about a firm is a little counter-intuitive to the industry, especially with so much negative scrutiny by the media and the public in general.
But to that I argue that it would benefit private equity firms to start a blog too, and it may outweigh the aforementioned negatives.
First, to the problem of how private equity is not really designed for blogging, look at the venture capital blogs. As you mentioned, there are a lot of VCs blogging. Many VCs aren’t even blogging strictly on venture capital, they offer tips and strategies or just talk about their life. I remember a news story that talked about venture capital bloggers talking about everything…except venture capital. While I don’t know how that translates to business for the specific VC, I do know that the ones blogging are making contacts and familiarizing the public with venture capital. So while private equity is not automatically geared for blogging there are other avenues that the firm could use that would help draw awareness for the firm and potentially expand their contacts.
This leads to my second argument for the benefits of private equity firms blogging: creating a firm blog enhances the accessibility for the firm to the public. The industry has attracted criticism for its lack of transparency with investors but more so with the public, who want to know more about the firm that is acquiring familiar public companies. Even a small effort like a blog is a step in the right direction for the private equity industry as it works to transform its bad public image.
The biggest problem, I think, is that private equity firms are so large and impersonal by definition, so having a blog would mean either using a willing member of management that is authoritative for the entire firm or hiring an impersonal writer that is limited to press releases and firm/industry data. The first is pretty unlikely, the latter wouldn’t be very popular.
So while I agree that this could strongly benefit whatever private equity firm takes the lead and starts blogging, I don’t see it happening anytime soon.
I recently found this PowerPoint presentation from Richard Wilson’s Hedge Fund Blog. It focuses on different private equity funds and hedge funds that is pretty extensive. It provides a great overview of how funds are structured and operate but also delves into some of the more complex aspects.
It seems all anyone is talking about is the recent collapse of Lehman Brothers and how the financial crises will effect the economy, specifically private equity. While a major decline in the market is potentially harmful to private equity, it is worth noting that private equity often thrives in down markets. This is because the nature of private equity is to buy large firms, which may be selling unusually low in a bad market, and turn enormous profits on the acquisitions. Here is a brief private equity video that talks about the state of private equity under the economic crisis (click the link to watch the video):
If you are searching for qualified private equity recruits for your firm or, on the other side, if you are hoping to connect with a private equity firm then Private Equity Recruitment is a great tool.
Unlike the broad financial recruitment websites, this resource specializes exclusively on the venture capital and private equity industry. One major benefit is the international reach of Private Equity Recruitment Ltd. which spans globally including Asia and the Middle East. Another benefit is the size of the agency, Private Equity Recruitment hosts more jobs on their website than any other private equity recruiter in the UK and Europe. This is a valuable resource for professionals interested in entering the private equity and venture capital industry.
Until I can correct the link problem for e-mail subscribers, here is the URL for Private Equity Recruitment: http://www.perecruit.com/
Lehman Brothers Holdings is a finance giant that has dominated the news this week with speculation that the firm would file for bankruptcy. This rumor was confirmed when Lehman Brothers filed for Chapter 11 bankruptcy protection on the morning of September 15, 2008.
In response, Lehman Brothers’ shares plummeted bringing the Dow Jones to its largest drop since the wake of September 11, 2001. Aside from the broader economic implications, what does this mean for Lehman Brothers’ substantial private equity business?
Since entering private equity in 1984, Lehman Brothers has been a major player in private equity by investing in merchant banking, venture capital, real estate, credit related investments, infrastructure and private fund investments. The private equity department of Lehman Brothers has amassed $30 billion in assets under management, according to the firm’s website. With a dim future for the company, the future of the private equity department is in jeopardy.
The only hope is to seek out potential buyers that would absorb the private equity branch. According to the Street Insider, the top firms that may buy the investment management division are limited to Bain Capital, Hellman & Friedman and Clayton Dubilier & Rice. Lehman Brothers will likely take its time searching out potential buyers and selling off the remaining assets of the company. The fall of Lehman Brothers Holdings is only the latest in a series of major blows to the market, following the government takeover of mortgage giants Freddie Mac and Fannie Mae. Ultimately, the impending purchase of the Lehman Brothers’ investment management division will decide how private equity is directly effected.
Most people have seen Jim Cramer excitedly shouting financial advice on CNBC’s “Mad Money.” In addition to his popular TV show, Jim Cramer is a best-selling author and former hedge fund manager. Today’s post features a video interview of Mr. Cramer discussing private equity and its role in reviving the economy. He suggests loosening the rules limiting the ability of private equity firms to buy large shares in banks. Cramer believes “breaking the private equity rules” will inject some capital into the struggling banking sector. I can’t get the size right, hopefully this looks alright.
Permanent Link: Jim Cramer on Private Equity
Tags: Private Equity Jim Cramer, Jim Cramer, Private Equity Firms, Private Equity Capital, Private Equity and the Economy, Private Equity Videos
The Private Equity Council is a information and research center based in Washington, D.C. The PEC is a great informational resource that has extensive white papers, research and data on private equity. The website is updated fairly frequently with research on current events effecting private equity. I recommend visiting the Private Equity Council to learn more about private equity.
A bolt on acquisition is a term in private equity that refers to when a private equity-backed company acquires another company as a “bolt on” to enhance the private equity-backed company’s value.
This method has gained popularity particularly in down markets when private equity firms need another source to enhance the appeal of the company prior to sale. According to a recent news article, the current economic decline has given way to a rise in bolt on acquisitions.
This is especially evident in a new BDO survey of private equity firms in the UK. The survey reports that private equity firms still want to make acquisitions, with 51% of the private equity firms expecting to acquire another business prior to being sold on. As valuations decrease, 97% of private equity firms predict that at least one in four of the companies in their portfolios to undertake a bolt on acquisition prior to exit. Additionally, 70% of the firms responded that at least have of their portfolio companies would add a bolt on acquisition.
Roger Buckley, corporate finance partner at BDO Stoy Hayward’s Birmingham office observed:
“Although private equity company sales are slowing, there is a massive demand to bolt on acquisitions to existing investments. There are over 1,200 mid-market private equity portfolio companies and bolt-on deals will underpin a lot of M&A in the mid-market for the next few years.”
In an uncertain global financial market, private equity firms are using bolt on acquisitions to add value of their portfolio companies.
Investing in a private equity fund has a lot of advantages compared to other investment areas, here are just five advantages of private equity for not only investors but also the companies that private equity firms acquire:
Companies that are backed or acquired by private equity firms are often made more efficient and produce higher profits, which benefits now only the private equity firm but also the company. Private equity firms use skilled management teams to correct the problems and ineffective parts of the company and many times this intervention prevents the company from further declining or even failing.
The management receives carried interest, a portion of the profits, so managers and their staff are motivated to produce good results to investors. Although carried interest is often criticized for taking money from the investors, it is a very big incentive for managers.
By definition, private equity firms work outside the public eye and do not have to follow the same transparency standards that public firms and funds must adhere to. This allows private equity firms to reform the companies without the constraint of having to report quarterly to the SEC or similar distractions.
Private equity firms generally perform very rigorous due diligence on potential investments. By utilizing a team of researchers the private equity firm is able to identify most risks that would not otherwise be found.
Private equity managers are paid very well and so it is easy to attract high caliber, experienced managers that tend to perform very well. The same goes for lower level employees at private equity firms, they tend to be the top young business school graduates.
Private equity firms along with hedge funds have received a lot of criticism asserting that they receive preferential tax treatment. The charge stems from a “tax loophole” involving the substantial performance fees that private equity managers, which make up a large part of the managers’ income. The performance fees are taxed by only 15% rather than the top income tax of 35%. This has caused some public criticism, especially among politicians who have put forth legislation to correct the tax treatment of management fees.
Private equity and hedge fund managers have protested any changes to the current tax code. Private equity managers argue that they should not be taxed at 35%, claiming that their performance fees are different than general income. They believe that carried interest is a logical reward for their invested time, resources and services, and the risk of loss involved in private equity.
Whether carried interest will be considered as general income is of huge importance to managers, as they stand to lose substantial earnings through this tax reform. Here is a really well done and extensive article that looks at the possibility of increasing tax on private equity carried interest and the possible ramifications of this.
The following video is an interview of Linley Capital Managing’s John Jonge Poerink, he discusses how his new firm plans to succeed in the rough financial market. Also, Poerink speaks of the future of private equity and how big buyouts can still happen after the credit crunch:
Private equity is expanding past the traditional major financial regions like the UK and United States to the recently booming economies in the East. One of these newly emerging private equity markets is India.
Private Equity Private equity has exploded in India, in terms of both the volume and the size of deals. Last year was a big year for India domestically, with the number of total mergers and acquisitions and private equity deals increasing from 697 in 2006 to 867. The more impressive increase from 2006 to 2007 is in the size of deals which rose by 82%. The following chart represents the private equity deals in India:
The United States accounts for a very large part of the private equity investment in India. In 2007 it was estimated that the U.S. is responsible for 45% of the private equity investment into India. Asian countries, excluding India, account for 18% and Europe only 12%. These numbers will likely change in 2008 as the U.S. private equity deals have declined this year and China is predicted to rapidly increase its investing abroad.
Venture Capital As for venture capital, India has seen a similar boom with a strong start to 2008. In the second quarter of 2008, India attracted $238 million in venture capital investment, a 120% increase over an already impressive last year. Over all of 2007, venture capitalists invested $928 million in 80 deals in entreprenuerial companies based in India. Led by large venture capital investments in marketing/advertising companies, this year promises to be another big year for India’s venture capital sector.
India has secured its place as a top destination for private equity investment. Last year, for the first time, India surpassed China in terms of the value of private equity deals over a 12-month period. Private equity funds focused in India are expected to raise at least $5 billion in the last two quarters of 2008, more than double the amount raised between June and December of last year. If this prediction comes true, 2008 will be an incredible year for India private equity. Permanent Link: Private Equity India
Tags: Private Equity India, India Private Equity, Private Equity in India, Private Equity Investment in India, Private Equity Funds in India, Venture Capital India
The number of private equity deals have declined as the credit crunch hurts the financial industry, but in terms of compensation and hiring private equity has remained strong in 2007.
According to a Private Equity Analyst study, the salaries for North American private equity professionals rose by 5.3%, from $190,000 rose to $200,000 in 2006. When you factor in bonuses, private equity compensation increased 25%, to $375,000. If you thought that was high, there is still the remaining factor of carried interest which brings the total to $401,000 from $315,000.
Hiring increased too, of the 167 private equity firms surveyed, the majority of the firms responded that they were adding staff more than reducing. This compares pretty impressively to the investment banks that have been cutting staff with mass lay-offs.
Other optimistic notes from the study are that of the participating private equity firms only 5% expect to diminish in size. Also, compensation consultants expect the pay for entry-level positions to stay the same or even rise in 2008.
So why is the private equity industry surviving while other financial sectors are making huge cuts in staff and salaries? A major factor may be the cushion of management fees. Private equity firms receive notoriously high management fees that are paid throughout the life of the deal, which sometimes lasts at least 10 years.
The study is not completely optimistic–the marked decline in deals is worrying many in the industry for instance–but in a struggling economy the study reveals good news for those considering entering private equity and those currently working at a private equity firm.
Private Equity and Venture Capital Networking Tips
The private equity job market is very competitive and it may be difficult to break into the industry. While a large part of securing an interview at a private equity or venture capital firm is having the proper credentials (i.e. MBA and financial work experience), another important aspect is networking.
By putting in some extra work networking you make a contact who leads you to a job opening, or you may just learn valuable tips from other private equity or venture capital professionals. No matter your field, networking is critical for advancing in the financial world. Here are a few basic networking opportunities you may have overlooked:
Linkedin.com: The biggest and probably the best networking website is LinkedIn. This website’s sole purpose is to connect professionals and make business contacts, so having an updated and active LinkedIn account is an easy networking tool that often leads to great contacts. Make sure that your profile is professional and shows all your skills and past work experience. A photo will lend some personality to your profile too. Join the private equity linkedin group, if you haven’t already.
Facebook.com: Another networking website that is Facebook. Although Facebook has a more social networking focus, many business people use this site as a tool for professional networking. Word of caution: if you use Facebook for its social features, like connecting with college friends, then make sure there are no comments or photos on your profile that you wouldn’t be comfortable with a potential employer seeing.
IFA Life: A reader suggested another networking tool, IFA Life,a new professional networking website for financial planners and investment professionals. The site is predominantly in the U.K. but is expanding to the U.S. too.
Join forums: The internet provides so many opportunities to connect with other private equity and venture capital industry contacts, and forums are great for this. The Private Equity Forum is connected to the 9,000+ member private equity group and is a good place to ask questions and meet people. There are also many forums exclusive to venture capital or angel investing.
Attend events: I live in New York City so there is always a networking event or private equity lecture to attend. This goes for most major cities too, especially areas with major financial sectors like Chicago and Boston. Sites like this, are great for keeping up with events. Also, check out online conferences “webinars” that are often led by well-known speakers.
These are some basic but great opportunities to make other contacts and become more familiar with the private equity industry. If you have any suggestions for other professional networking opportunities please send an email to Theo@peblogger.com
Africa is developing good governance and bolstering financial institutions to attract private equity investment.
There are obvious problems preventing private equity in Africa most importantly stability. However, private investment has increased especially this decade with Asian investment strengthening the continent’s economy. Until Africa can modernize its financial sectors with heightened regulation and political reform, private equity investment will realize its potential. The following two part video explains the developments that are taking place in Africa and what to expect in the future:
China’s economy has grown impressively this decade and private equity firms are entering the region hoping to capitalize on the economic growth. The following video is an introduction to private equity in China from the Berkeley China Initiative. This segment examines the sources of private equity as well as the increasing size of private equity deals in China.
How to Improve the Private Equity Industry’s Reputation
The private equity industry has suffered from a negative public perception largely stemming from a lack of transparency. The annual Davos World Economic Forum discussed how the private equity industry could improve their reputation, here are some of the solutions offered by the co-founder of the Carlyle Group David Rubenstein:
Improving Transparency: The most important change that the private equity industry must address is the lack of transparency over how the industry operates. To do this private equity groups must appeal to more than their investors by reaching out to labor unions, public groups and communities effected by deals.
Opening to the Media: The media has played a major role in portraying the private equity industry as secretive and untrustworthy. This stereotype is furthered by the private equity industry’s reluctance to respond with openness toward media. Recently, private equity has made attempts to improve its relationship with the media and its critics but more needs to be done to repair its poor public image.
Focusing on Benefits: Private equity has been charged with primarily focusing on profits while the public suffers. As I’ve mentioned previously, a report on private equity revealed that in the majority of acquisitions by private equity groups employment in the company actually rises. Reports and data like this should be used by private equity groups to combat criticism. Despite some highly publicized negatives, the private equity industry has positive effects that it should capitalize on to improve its public image.
Tags: Private Equity Industry, Improving the private equity industry, private equity reputation, private equity pr, private equity public relations, private equity industry and the public
The Private Equity Real Estate Magazine reveals the PERE 30, the top thirty private equity firms investing in real estate. The combined total raised by all thirty private equity firms was $190 billion over the last five years. The Blackstone Group and Morgan Stanley Real Estate topped the list, together the two firms raised more than $36 billion in the past five years.
The associate editor of the PERE Magazine commented “With real estate growing rapidly as an institutional asset class, these 30 firms are primed to continue growing at a tremendous rate and influencing real estate markets around the world.”
Here is the list of the largest private equity real estate firms:
The Blackstone Group
Morgan Stanley Real Estate
Tishman Speyer
Goldman Sachs Real Estate Principal Investment Area
Colony Capital
Lehman Brothers Real Estate
The Carlyle Group
ProLogis
Beacon Capital Partners
LaSalle Investment Management
MGPA
AEW
Rockpoint Group
Apollo Real Estate Advisors
CB Richard Ellis Investors
RREEF Alternative Investments
Grove International Partners
Shorenstein Properties
The JBG Companies
Citigroup Property Investors (CPI) Capital Partners
Tags: Private Equity Real Estate, List of private equity real estate firms, list of private equity real estate, list of private equity firms, top private equity real estate firms, top private equity, top real estate private equity
Private Equity Analyst is the Dow Jones’ monthly newsletter on private equity, and in September it will be hosting industry leaders for a private equity conference.
Private Equity Conference 2009
The Dow Jones’ Private Equity Analyst Conference 2009 takes place September 16-17, 2009 at the Waldorf in New York City. The private equity conference is a great place to get to know other private equity professionals and gain insight from distinguished industry leaders like the CEO of the Blackstone Group and venture capital giant David Rimer of Index Ventures. All this comes at a pretty high price tag of $2,595, but this conference is a smart investment for private equity professionals who can afford it.
The best returns often come during the worst of times. It is a phrase that you’ll hear from buyout firms, big and small, from venture firms, from secondary firms and even from limited partners. They know that out of the troubles of the ’70s, late ’80s, and the collapse of the tech bubble have come deals that have made reputations and paved the way for big returns. The current global crisis is, of course, unprecendented, but the past is one reason why the private equity industry, unlike so many others, is looking at the situation optimistically rather than pessimistically.
Yes, they know keeping companies alive will be difficult, but they also feel that there will be incredible opportunities as well. But just what will prove to be winning bets? Will buyout firms find success in doing deals without leverage? Will venture capital firms generate green in doing clean-tech deals? Will distressed firms find the right companies to buy? Will limited partners have picked the right managers?
The 16th Annual Private Equity Analyst Conference will tackle these questions while also giving attendees insight into what’s next for their firm and the industry. –PEA Conference
For more information on this private equity conference click here.
Tags: Private equity conference, private equity conferences, private equity analyst, private equity analyst conference in New York, New York private equity conferences, list of private equity conferences, schedule of private equity conferences, private equity conference resource, PEA conference.
Private equity investment in real estate has increased in recent years, here is an overview of private equity real estate:
Private equity real estate is a sometimes risky, but often lucrative investment area that has become increasingly popular in the last few years. Private equity real estate typically involves a private equity firm collecting money from investors to create a private equity fund, which then looks for potentially profitable real estate to purchase. The private equity fund creates a portfolio of real estate investments that the fund manager believes will be relatively low-risk while still lucrative.
Private equity real estate funds three major investing strategies:
Core-Plus: This strategy is generally low risk with low returns. The Core-Plus strategy involves investing primarily in core properties, with a small amount requiring some form of enhancement.
Value Added: This strategy usually generates higher returns than Core-Plus, but carries greater risk. The idea is to buy property, make some improvement on it to raise the property’s value and then sell it at a higher price than originally purchased. Value-added improvements range from solving management/operational problems, physical improvements, or solving capital constraints.
Opportunistic: This approach is generally the riskiest, but sometimes the most profitable. The opportunistic strategy usually involves investing in properties that require a high degree of improvement and other more risky potentially profitable real estate investments like raw land and niche property sectors.
Drawbacks to Private Equity Real Estate
High Entry Fee: Due to the substantial amount of capital needed for investing in real estate many funds require very large minimum investments.
Low Liquidity: Private investment in real estate requires investors to have limited access to their money because it is locked up in long-term investments. Some real estate investments can last more than ten years while the property is improved.
Volatility: As recent failures in the housing market demonstrate, the real estate market is subject to both boom and bust cycles. For investors the real estate market is sometimes incredibly profitable but there is also a high degree of risk as housing prices can fall and the fund can fail.
The private equity real estate industry has increased in size since 2000. While the housing crisis has hurt many in the financial industry it has also led to very cheap real estate that private equity funds are purchasing for huge profits.
Tags: Private equity, private equity investment in real estate, private equity real estate, private equity investing in real estate, private investors real estate, private investing real estate, definition private equity real estate
A new report reveals that despite a rough first quarter, European private equity recovered in a small way during the second quarter of 2008. The improvements in Q2 are increases in both volume and value of 9% and 15% over the first quarter.
However, this quarter’s success is overshadowed by the heavy losses endured last quarter. YTD estimates show a drops in volume (9%) and value (53%) from last year. Although the European private equity market is much weaker than last year, there is hope in the completion of two deals worth in excess of EUR 2bn during the second quarter.
Buyouts
The value of buyouts in the second quarter stayed pretty steady remaining above the EUR 24bn level, with only a very slight decrease. The number of buyouts had a minor increase from 160 to 173 deals.
The trend toward small-cap continues as the volume of deals in the smallest bracket increased 3% and value rose considerably from 143m to EUR 6bn.
On the other hand, the mid-market sector declined over the second quarter, volume dropped 18% and value fell 28%.
Positively, the largest bracket has jumped in terms of value by 58% above the first quarter. The UK remains the leader in European buyouts with 36% of the overall total.
Growth Capital
Two major deals that were collectively worth EUR 3.5bn led to huge success in growth capital in the last three months. The growth capital segment increased in terms of value by 238% from EUR 1.8bn to 6bn. Growth capital also improved in terms of volume, increasing 17% in the second quarter.
Also, six of the top ten growth capital transactions were over EUR 100m. This is a significant leap from the first quarter’s biggest deal of only EUR 88m.
Early Stage
So far, in terms of volume this has been a good year for early stage private equity. The second quarter exactly mirrored the first, with 89 early stage deals made. This is a 24% increase in volume over last year’s first two quarters.
It is a different story for early stage, in terms of value. The value of early stage deals fell 37% from the first quarter; at only EUR 278m, this is the lowest total for early stage in 18 months.
Germany and the UK continued to perform very well in the second quarter.
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