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Study: California, Texas received most PE funding in 2014

Together the two states received over $100 billion from private equity firms last year

California received the most capital from private equity firms out of all 50 US states last year, according to an annual report released by Private Equity Growth Capital Council.

The PEGCC's Private Equity: Top States and Districts report uses data from PitchBook to analyze and rank states and congressional districts in annual private equity funding. The research found that California's 385 companies backed by private equity received $56.4 billion, down 4 percent from $54 billion in 2013 for 304 companies.

The second place went to Texas, which has 334 companies backed by private equity and received $51.9 billion in funding. In 2013 it ranked first with $87.4 billion in capital committed by private equity firms.

In total there were 3,139 private-backed companies in the US that received $486.4 billion in 2014, a $43 billion increase from 2013.
During the decade spanning from 2005 to 2014, California received $470.4 billion in private funding for 3,128 PE-backed companies. Texas' 2,744 PE-backed companies saw $641.5 billion in commitments.

But private equity activity is not solely focused on the top few states, according to PEGCC spokesman James Maloney.

“Private equity capital investment was over $7 billion in more than 20 states last year,” he said. “This validates the remarkable role of private equity all across our country, not just a select few states.” 

The business services sector received the most funding in 2014, accounting for 29 percent of all private equity capital, and consumer services sector came in second at 22 percent.

Comparatively, in 2013 the information technology sector saw the most funding, with 28 percent of total funding, followed by 25 percent for the consumer services sector. Business services received 18 percent of total funding that year.

According to the report, private equity firms invested about $4.5 trillion in the past decade and PE-backed US companies employ 11.3 million people in the country and 19.6 million people globally.