PEI 300: Immune response to covid

What pandemic? The industry’s 300 largest firms raised a record $2.25 trillion in fresh capital over the past five years.

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Private Equity International’s 14th annual ranking of private equity’s largest managers shows the covid-19 pandemic has not impaired mega-firms’ fundraising efforts or diminished investors’ appetites for funds managed by established names.

Although the industry has had to reckon with few in-person meetings and limited on-site due diligence, the firms comprising the PEI 300 still managed to amass a record $2.25 trillion over a five-year period, 13 percent more than last year’s list. To appear on the PEI 300 list firms need to have raised at least $1.55 billion, up from a minimum of $868 million in 2010. To enter the top 100, firms must have raised at least $5.96 billion, and the bar for the top 10 is set at $37.49 billion.

Blackstone was the biggest fundraiser, topping the list for the fifth year, with a five-year fundraising total of $93.22 billion. That figure is more than 50 percent greater than Blackstone’s total for 2016, when it claimed the top spot for the first time. (The New York firm’s 2021 total dipped 2.84 percent from the prior year.) When Blackstone reported its first-quarter earnings in April, chief operating officer Jonathan Gray compared private equity to growing plants, saying the firm “grows and harvests before starting the process again”. In recent years, Blackstone has been “planting a lot of these perennials, and they should be blooming more and more in greater amounts and at different times of the year”, Gray said.

“Perpetual capital remains in the ground and compounds in value, generating management fees and, in most cases, recurring performance revenues without asset sales,” Gray added.

Blackstone’s haul was $13.3 billion more than the $79.93 billion collected by the second-largest fundraiser on the PEI 300, KKR, which moved up one place from last year. In third place is London’s CVC Capital Partners, which raised $60.42 billion over five years, storming up the list from seventh last year, on the back of its €22 billion eighth flagship fundraise.

Carlyle Group, typically in the PEI 300’s top three, moved down two spots to fourth, having raised $50.83 billion, about 18 percent less than its five-year total in 2020. Overall, the 10 largest firms collectively raised $531.09 billion over the previous five years, a 15 percent increase from last year’s top 10.

The largest capital raisers were powered partly by the stunning growth of technology-focused funds. San Francisco tech specialist Thoma Bravo was the biggest mover in the top 10, leaping from 15th place last year to fifth this year, with a five-year fundraising total of $46.65 billion, including $17.8 billion for its 14th flagship buyout vehicle.

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On a similar note, Silver Lake (11) nearly cracked the top 10, with a five-year fundraising haul of $37 billion, about 2.5 times more capital than it raised in the five years ending in 2020.

And another tech-focused investor, Vitruvian Partners, rocketed 84 places from 163 in 2020 to 79 this year. The London-based firm closed its €4 billion fourth flagship fund in June last year after just three months in the market. Other significant movers this year include:

• Shenzhen’s China Merchants Capital, which debuted at number 27, having raised $19.1 billion over the five-year period;
• London’s Hg, which raised $17.8 billion over the last five years, soaring from 88th place last year to 31 this year;
• New York’s New Mountain Capital, which climbed 40 positions to 34 after raising $16.6 billion over five years, including a $9.6 billion flagship vehicle and a debut non-control private equity fund;
• Boston mid-market investor Charlesbank Capital Partners, which zoomed from 168 to number 60 thanks to a five-year haul of $8.6 billion.

Notable falls this year include GCM Grosvenor, which plummeted from 91st on last year’s list to number 216 this year, and Australia’s Pacific Equity Partners, which dropped from 120 to 199. At least two firms, Summa Equity and OrbiMed Advisors, fell off the list, after being ranked at 300 and 234, respectively, the previous year.