Carlyle reigns supreme at the top of the PEI 300

This year’s PEI 300 ranking is record-breaking and sees Carlyle snatch back the crown. Is private equity in a second golden age?

The full listing

Rubenstein’s take on the future as Carlyle tops PEI 300

PEI 300 generates better IRR than last year’s

Risers and fallers over a decade of the PEI 300

All change at the top of the PEI 300

PEI 300: The top-ranked Asia-headquartered firms 

Carlyle co-founder David Rubenstein announced a lofty goal during an earnings call with investors in 2016: to raise $100 billion over the course of four years.

Any other firm declaring this aim in a call where it said it had raised $400 million for private equity that quarter would probably have been met with disbelief. But this is not just any firm. Carlyle has long been blessed – or saddled, depending on your viewpoint – with the moniker “fundraising machine”, and as Private Equity International revealed last month, David Rubenstein is more than worthy to be crowned the industry’s king rainmaker.

Since then, Carlyle has raised more than $400 million per quarter. Much, much more. The firm steals this year’s PEI 300 top spot from Blackstone in spectacular fashion, with a five-year fundraising total almost $20 billion higher than it posted last year. Meanwhile, a relatively quiet 2017 on the fundraising front for Blackstone sees its total shrink to $52 billion.

On the firm’s fourth-quarter earnings call in February – during which it announced it had raised $19 billion for private equity for the quarter – Carlyle said it expects to raise approximately $25 billion this year.

This is the fifth time Carlyle has been at the top of the PEI 300. It has held this title more times than any other firm, including in the inaugural ranking in 2007 when it was just the PEI 50 (we chart the progress of all firms that made the original PEI 50 list, which became PEI 300 in 2009, here). Back then, its five-year fundraising total was a mere $32.5 billion. That number just goes to show how much the industry has blossomed in the last decade. This year’s ranking breaks records across the board, with more capital raised by the top 10 (at $394 billion), the top 50 (at $876 billion) and the whole 300 (at $1,485 billion) than ever before.

And capital is continuing to concentrate in the upper echelons; the top 10 accounted for 26.5 percent of the total capital raised, up from 23.8 percent last year and 22.9 percent in 2016. The top 50 also increased its reach, amassing 59 percent of total capital raised, up from 56 percent last year.

Strong performance has kept investors coming back for more; 84 percent of limited partners responding to PEI’s most recent annual LP Perspectives survey saw private equity performance in line with or exceed internal benchmarks during the preceding 12 months.

Outperformance

According to Bain & Company’s latest Global Private Equity Report, as of mid-year 2017, the median net return of private equity holdings in the portfolios of public pension funds over a 10-year time horizon was 8.5 percent, compared with 4.2 percent for public equities, 4.5 percent for real estate investments and 5.2 percent for fixed income.

“That kind of outperformance is irresistible in a period marked by persistently low yields on most other investment options,” the report reads.

To see how this year’s top 10, top 50 and PEI 300 have performed against each other and the public markets, click here.

While the top three are made up of the usual suspects, there has been a shake-up in the top 10 this year. TPG has slipped from fourth to 10th, mostly due to a tightening in methodology, which excludes funds managed by the firm’s credit arm that had previously been included. On the back of its €10.75 billion eighth flagship fundraise, EQT has stormed up the list from 31st to seventh, the highest the Stockholm-headquartered firm has ever been ranked. It should come as no surprise that Apollo Global Management’s record-breaking Fund IX, which closed last year just shy of $25 billion, also propelled the firm up the ranking, landing it in fourth position.

This year saw a massive leap for Menlo Park-based Silver Lake, which closed the largest-ever tech-focused fund on $15 billion last year and moved up from 23rd to ninth. CVC also came roaring back this year, having closed the largest-ever euro-denominated fund on €15.5 billion in 2017.

In the first golden age of private equity fundraising in 2008, firms raised $433 billion and Carlyle reigned supreme as leader of the PEI 50. In 2018 the make-up of the PEI 300 may look slightly different, but King Carlyle is back on top, and with last year’s fundraising total $22 billion shy of that 2008 record, it’s safe to say the private equity gold rush is back.

  • To see the full list and read more about which firm made the ranking and changes this year, visit our PEI 300 page here

THE SMALL PRINT

How the rankings are determined

The 2018 PEI 300 ranking is based on the amount of private equity direct investment capital raised by firms between 1 January 2013 until 1 April 2018.

Definitions

Private equity: For 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 and 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 2013. We count the full amount of a fund if it has a close after this date, and we count the full amount of an interim close that has occurred recently, even if no official announcement has been made. We also count capital raised through co-investment vehicles.

What does NOT count as private equity?

Funds of funds, secondaries, real estate, infrastructure, hedge funds, debt, mezzanine and PIPEs.

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

For a full methodology, email PEI’s research manager, Daniel Humphrey Rodriguez (daniel.r@peimedia.com).