PEI 300: On the up

While US firms continue to dominate the top 10, this year’s PEI 300 welcomed ten newcomers into the top 50

Click here to read the PEI 300 section which features in our May issue

The downward trend in overall fundraising by the world’s 300 largest private equity firms following the 2008 global financial crash has finally ended.

This year’s PEI 300, which ranks private equity firms by the amount of capital raised over a five-year qualifying period from 2010 to 2015, shows a modest 6 percent jump year on year in total fundraising to $1,086.9 billion.

The US continues to dominate the top ten, with US firms taking nine of the top spots. Only London-based CVC Capital Partners, ranked sixth, made it into the top ten.

The Carlyle Group continues to occupy the top spot, having raised $31.9 billion. TPG, which headed the pack between 2011 and 2013, is snapping at its heels, having raised $30.3 billion and moved up from fifth in 2014. The largest ten firms raised $227 billion over the past five years, up from $199 billion in 2014, yet significantly down from the $368.5 billion raised in the five years to 2009.

Entering the realms of the ranking’s top 50 segment is no mean feat. As our rankings take into account funds raised over the past five years, to break into the coveted higher echelons requires firms to ratchet up their fundraising substantially – and for previous heavy hitters to slide down the charts.

This year, a remarkable 10 firms made the grade. As a quick comparison, just three organisations – the Russian Direct Investment Fund, Permira, and the Georgian Co-investment Fund – debuted in the top 50 last year.

New York-based Centerbridge Capital Partners leapt from 60th place in 2014 to 15th this year, catapulted by the close of its third flagship fund at its $6 billion hard-cap in October after just four and a half months on the road. The firm, which now manages around $25 billion, has collected just shy of $10.5 billion in the last five years, with LPs in its latest vehicle including the California Public Employees’ Retirement System, the California State Teachers’ Retirement System and the Oregon State Treasury.

Jean Eric Salata’s Baring Private Equity Asia shot up from 119th place in 2014 to 44th on the back of its heavily oversubscribed sixth pan-Asia vehicle, which hit its $3.988 billion hard-cap in February 2015. According to Baring the fund is the largest ever raised for the region by an Asia-based private equity fund, and is 60 percent larger than its predecessor vehicle.

Pamplona Capital Management, which invests primarily in Europe and North America, climbed to 40th place from 104th following the close of its fourth private equity fund on €3 billion last year. The firm, which has raised four funds since inception in 2005 worth more than €6.6 billion, collected $6.74 billion in the last five years.

New York-headquartered investment firm Tiger Global Management redefined what it means to up the fundraising pace, raising $4 billion for two vehicles last year.

In November the firm raised $2.5 billion for its ninth venture capital fund just two months after its launch and a mere seven months after it closed its $1.5 billion eighth fund. According to a filing with the US Securities and Exchange Commission the firm raised the capital for Tiger Global Investment Partners IX from as many as 521 investors.

Known primarily for its hedge fund activities, Tiger invests its venture capital funds across the world. Ranked at number 105 in 2014, the firm is now in 41st place in the PEI 300 with $6.74 billion of funds raised in the last five years.

Other notable climbers this year include London-based Bridgepoint, which shot up the rankings from 167th in 2014 to 37th this year raising $7.3 billion over the five year period, and Texas-based Vista Equity Partners, which raised $11.81 billion over the last five years, moving up from 222nd in 2011 to 11th in 2015.

How the rankings are determined:

The 2015 PEI 300 rankings are based on the amount of private equity direct investment capital a firm has raised between 1 January 2010 and 1 April 2015.

Definitions
Private equity: For the purposes of the PEI 300, the definition of private equity is capital raised for a dedicated programme of investing directly into businesses. This includes equity capital for diversified private equity, buyouts, growth equity, venture capital, turnaround or control-oriented distressed investment capital.

Capital raised: This means capital definitively committed to a private equity direct investment programme. In the case of a fundraising, it means the fund has had a final or official interim close after 1 January 2010. We also count capital raised through other means, such as co-investment vehicles, deal-by-deal co-investment capital, publicly traded vehicles, recycled capital, and earmarked annual contributions from a sponsoring entity.

What does NOT count as private equity?
Funds of funds, secondaries, real estate, infrastructure, debt (including mezzanine), PIPEs and hedge funds.

NB. The PEI 300 is not a performance ranking, nor does it constitute investment recommendations.