TPG clings on to crown as world's largest firm

TPG Capital has topped PEI's sixth annual proprietary ranking of private equity direct investment programmes based on fundraising performance, the PEI 300, retaining the crown it won back last year after an earlier victory in 2009.

In total, the 300 firms which made the 2012 list have raised $1.3 trillion in the last five years. The top 50 firms accounted for $704 billion of that total.

It’s a second consecutive year at the top for TPG, whose remarkable fundraising machine accumulated $49.9 billion in the period covered by this year’s PEI 300 ranking (1 January 2007 to 1 April 2012), down from $50.6bn in 2011.

While there was clear water between TPG and the second placed firm, Goldman Sachs Principal Investment Area, last year – Goldman's 2011 total was $47.2 billion  – this year, the competition was far closer.

The Blackstone Group was second in the 2012 ranking, with its total of $49.6 billion just $259 million behind that of TPG. Kohlberg Kravis Roberts was third with $47.7 billion, while Goldman slipped to fourth, with $43.5 billion.

Diversification has been key to TPG’s success. Buyouts remain its strength – but if investors want growth capital, or venture, or even special situations, TPG has a fund for them. It’s also a genuinely global operation: in addition to its traditional strongholds of North America and Western Europe, it has been a trailblazer in emerging markets like Brazil, Russia and China.

The firm has been raising funds in Asia successfully since the 1990s. And it shows no sign of slowing down: this year it held a first close on its first two RMB funds, and even bought a minority stake in Indonesian manager Northstar Pacific. It’s also reportedly nearing a $1.5 billion first close on a new Asian buyout fund that could ultimately garner up to $4 billion.

It’s a story that investors clearly like. The firm continues to attract huge commitments from big LPs, including the US pension funds, and has also been selected as an official partner by the state-owned Russian Direct Investment Fund and China Development Bank, as the two countries’ respective governments look to boost foreign investment.

The PEI 300 always throws up some interesting results. This year, for example, Abraaj Capital, CDH Investments, JC Flowers & Co, and Oaktree Capital Management were some of the firms to have risen further up the rankings for the third year running. Some firms, like Permira, Charterhouse, and Madison Dearborn Partners, have slipped in the rankings due to their fundraising cycles: 2006-vintage funds no longer count towards a firm's total. Doubtless they'll be rising up the ranks next year.

For a full report on the PEI 300, complete with detailed analysis, please read the May issue of Private Equity International.