New Mountain Capital
Ranking: 34 (up 40 places from 2020)
HQ: New York
The growth investor raised over $10bn last year across its sixth flagship and a debut fund for minority stakes.
New Mountain Capital shot up 40 places to 34th in the ranking this year, as its five-year fundraising total rose to $16.6 billion, $10 billion more than it gathered in the same period ending 2019.
Key to this year’s success was its $10.2 billion haul for its sixth flagship fund and debut non-control private equity fund. The New York firm raised $9.6 billion against a target of $8 billion for the flagship fund, and pulled in $640 million against a $750 million target for Strategic Equity Fund, its minority stakes fund.
“For years, we have seen good opportunities that did not fit in the flagship fund because the investment was not for control,” New Mountain founder and chief executive Steven Klinsky told PEI in February. “We had a series of great opportunities that we had to turn down.”
New Mountain targets “defensive growth industries” including life sciences and advanced materials, healthcare technologies, advanced data and analytics, digital transformation and financial services.
The mega-raises follow a strong 2020 for the firm, marked by $2.6 billion of capital deployed across eight platform companies and several add-ons, in addition to $5.4 billion-worth of exits. New Mountain has more than 20 years of growth-oriented investing experience.
Ranking: 79 (Up 84 places from 2020)
The buyout and growth investor’s rapid €4bn fundraise in July for its fourth vehicle has pushed it into an elite group of European firms.
Vitruvian Partners leapt 84 places to the 79th spot on this year’s list, with a five-year fundraising total of $7.3 billion.
The London mid-market firm gathered €4 billion for its fourth fund in July, less than three months after launching the vehicle. It exceeded its €3.75 billion target for Fund IV and received commitments from more than 120 investors. Half of the capital raised came from US public pensions, including the California Public Employees’ Retirement System, California State Teachers’ Retirement System and Los Angeles City Employees’ Retirement System.
Vitruvian focuses on buyout and growth investments of between €25 million and €250 million in European companies of €75 million to €1 billion in value. It has also built a “value-added team” – consisting of specialists in technology, digital marketing, recruitment and operations – to assist portfolio companies.
“They’ve got this ‘dynamic situation’ investment thesis: trying to identify cash-generative, high-growth, high-margin, shock-resistant companies,” says one early Vitruvian LP. “Just Eat was a model for how this can work. It became a differentiator, especially in a European context. Who can put big cheques to work in these sorts of tech companies? Apart from Hg Capital, probably only Vitruvian.”
Peak Rock Capital
Ranking: 148 (New entry)
HQ: Austin, Texas
The Texas manager closed its third buyout fund in April, easily surpassing its target.
Mid-market manager Peak Rock Capital broke back into the PEI 300 this year after a brief hiatus, having raised $3.4 billion over the last five years.
The nine-year-old manager, based in Austin, Texas, closed Peak Rock Capital III in April 2021 at the hard-cap of $2 billion, against a target of $1.3 billion, after merely five months on the road.
Investors in the new fund include Alameda County Employees’ Retirement Association, Employees Retirement System of Texas, Teacher Retirement System of Texas and Tennessee Consolidated Retirement System.
Peak Rock invests in the mid-market through equity and debt across the US and Europe, with an emphasis on complex situations. It puts equity to work in companies looking for rapid growth and profit improvement through operational and strategic changes.
Its credit platform invests across capital structures, with a broad mandate to provide flexible, tailored capital solutions to growth-oriented businesses. Peak Rock raised $225 million for its first dedicated debt vehicle in 2018 alongside its equity flagship.
The firm’s executive team is comprised of a dozen members, most of them from hailing from established firms such as Aurora Capital, The Carlyle Group, HIG Capital, Oaktree Capital Management and The Riverside Company.
Brightstar Capital Partners
Ranking: 175 (New entry)
HQ: New York
Founder-focused strategy lifts mid-market Brightstar to hard-cap on sophomore effort.
Brightstar Capital Partners shot up the PEI 300 list this year, going from 330 to 175 thanks to a successful fundraise for its sophomore fund.
The six-year-old firm closed its second flagship in April on a hard cap of $1.27 billion, surpassing its $1 billion target. The total included roughly $60 million from the general partners’ own pocket. The New York firm also raised $190 million in co-investment capital.
Overall, the manager raked in just over $2.8 billion over the past five years. Brightstar’s investment strategy focuses on control-oriented investments in North American mid-market companies, often closely held or family-owned business.
It’s a segment rife with opportunity. There are some 200,000 companies that make up the middle third of the US economy, says Doug Farren, managing director of the National Center for the Middle Market.
Farren has noticed a big increase in family-owned companies looking to divest as the next generation chooses not to take over the family business.
Brightstar is comprised of 14 managing directors and partners, including CEO Andrew Weinberg. He founded the firm in 2015 after serving as a partner at Lindsay Goldberg.
Deutsche Private Equity
Ranking: 238 (New entry)
The Mittelstand firm made its debut on the PEI 300, aided by a successful raise for its fourth fund.
If 2020 was a tough year for private equity firms, you wouldn’t know it from Deutsche Private Equity. Besides making its PEI 300 debut, the firm found time to exit its position in German pharmaceutical manufacturer PharmaZell in February and acquire a majority stake in ballistic defence provider Mehler Vario System in September.
DPE raised $2 billion over the past five years, with half coming during the pandemic. The Munich-based firm held a final close on DPE Deutschland IV at its €1 billion hard-cap in September after just three months in market. More than half of Fund IV’s commitments were from new investors. Fund IV’s total adds to the €604 million raised for its 2016-vintage predecessor.
DPE targets mid-market businesses across Germany, Austria and Switzerland. A buy-and-build specialist, the firm has completed 30 investments and 70 add-on acquisitions to date. On average, its portfolio has increased sales by 20-25 percent per year, it says on its website.
DPE was founded in 2007 by managing partners Volker Hichert and Marc Thiery. Hichert was previously a partner at small-cap investor Granville Baird, while Thiery worked at several European private equity firms, including Allianz Private Equity Partners, Apax and Morgan Stanley Capital Partners.
Ranking: 257 (New entry)
The European healthcare specialist is expanding internationally, having gathered €1bn for its latest vehicle.
In a year defined by medical crises, it is fitting that healthcare specialist ArchiMed debuted on the PEI 300.
The French firm closed MED Platform I – its first buy-and-build mid-cap fund – above target on €1 billion in September. ArchiMed’s earlier funds, the 2017-vintage, €315 million Med II and the 2014-vintage €146 million Med I, were both focused on small-cap businesses.
ArchiMed launched a US outpost in September, hiring Justin Bateman, a former managing partner at BC Partners, and Monica Holec, a former senior managing director and head of investor relations at Levine Leichtman Capital Partners. Its portfolio has been active on the buy-and-build front throughout the pandemic. For example, platform company Bomi Group, an Italian healthcare logistics business, completed six acquisitions between May and January.
ArchiMed focuses on mid-market companies in a variety of healthcare sectors, including biopharma, medtech, life sciences, healthcare IT, public safety, consumer health, care providers and diagnostics.
“We are growth investors, not value investors,” Denis Ribon, a founding partner and chair of ArchiMed, told Private Equity International in February. “We only want to invest in outstanding companies in our specialised sub-sectors and in category leaders with plenty of potential.”