Cover Story

22 Private Equity International • June 2019

 Cover story

Fund families
Page 24

Interview
Joe Baratta, Blackstone
Page 26

Diversification game
Page 30

Consumer specialists
Page 32

Funds of funds
Page 34

Tech, tech, boom

Page 36

Asia’s mid-market
Page 38

Profit with purpose

Page 40

Databank
Page 42

June 2019 • Private Equity International 23

 Cover story

It’s official: A single

fund family is no
longer enough

B
lackstone’s back, snatching the Managers are responding to demand Carlyle, which has raised capital across 13
top spot in this year’s PEI 300 from within the LP community to commit fund families – all within the boundaries of
from The Carlyle Group with larger equity cheques to a smaller number private equity.
a five-year fundraising total of GPs they know and trust – often in the But don’t think for a moment the flag-
almost $20 billion higher than expectation of lower fees. Offering a variety ship funds have been pushed by the way-
the next runner up. The private of strategies creates a “one-stop-shop” for side. In the last few months Blackstone has
equity juggernaut hauled in a total of $82.9 institutional investors looking for diversi- amassed at least $22.2 billion towards what
billion over the five-year rolling period to 1 fied exposure to the asset class with lower will likely become the largest private equi-
April 2019, a nearly 60 percent increase on overheads and less paperwork. ty fund ever raised. Carlyle closed its latest
its five-year tally in 2018 and more than $20 Take Blackstone, for example. In the flagship buyout fund on $18.5 billion this
billion higher than Carlyle’s 2018 total. last year alone, the firm has launched three year. The latest flagship fund from CVC
One theme ties together all the firms in new private equity platforms – life sciences, Capital Partners (4), closed in 2017, set the
this year’s top 10: no longer are they con- growth equity and, most recently, impact in- record for the largest-ever euro-denominat-
fining themselves to raising consecutive vesting. Each already has, or will eventually ed fund. And Thoma Bravo (8) – the only
flagship buyout funds. Each has at least two have, its own fund. Its five-year fundraising sector specialist in the upper echelons of the
other fund families, either in different strat- total includes capital collected for five dif- list this year – shattered its $9 billion tar-
egies within private equity or within the rest ferent strategies. get for Fund XIII to hold a final close on its
of the alternative assets realm. And that’s nothing compared with $12.6 billion hard-cap. n

2019 2018 Firm Five-year fundraising total ($m) Headquarters

1 p 2 Blackstone 82,851 New York
2 q 1 The Carlyle Group 63,802 Washington DC
3 vw 3 KKR 47,977 New York
4 p 5 CVC Capital Partners 47,413 London
5 p 6 Warburg Pincus 36,557 New York
6 p 12 Bain Capital 35,554 Boston
7 vw 7 EQT 30,054 Stockholm
8 p 17 Thoma Bravo 29,880 Chicago
9 q 4 Apollo Global Management 29,001 New York
10 q 8 Neuberger Berman Group 28,884 New York

24 Private Equity International • June 2019

 Cover story

Blackstone
Modern families: $82.9bn
In the last five Tactical
Opportunities Impact*
years, the top five Growth*

firms have rapidly Energy

expanded their Partners Life
Sciences*

product offerings uii

Core Equity
er
Partners Blackstone
Capital Partners

The Carlyle Group

$63.8bn Europe Technology
Africa Buyout
Power
Europe
Carlyle Cardinal Ireland KKR
Buyout Asia Growth
Global Financial Services Buyout $48.0bn
Asia
TMT
Buyout International Energy Healthcare
Growth
Growth

Global Partners Asia

US Buyout Buyout
Europe
US Middle Buyout Global
Market Buyout Impact*

Japan Buyout
Americas
Buyout
CVC Capital Partners Energy
Income &

$47.4bn Warburg Pincus Growth

$36.6bn
Strategic
Opportunities Key
China Energy
Asia SE Asia
Buyout Growth
Partners Total funds
China
Financial Sector
Existing fund

Europe and Global

the Americas Growth New strategy
launched in the
last five years

* Undisclosed fund size

Source: PEI

June 2019 • Private Equity International 25

 Cover story

T
here aren’t many firms that
can write a $5 billion equity
cheque, certainly not on their
own,” says Joe Baratta, Black-
stone’s global head of private
equity.
The New York-based firm has reclaimed
its position at the top of the PEI 300 after
losing out to Carlyle in 2018. Baratta is the divesting of non-core assets, creating “enor-
man charged with deploying the $68 billion mous” dealflow. Baratta admits these trans-
of dry powder sitting within Blackstone’s actions are harder to access and execute
corporate private equity arm. than those in the mid-market – but again,
Talking to Private Equity International sees that as playing to the firm’s competitive
in the firm’s Manhattan headquarters, he is advantage.
outlining the benefits of being the industry’s
largest. “If we have competitive advantage in Complexity breeds complexity
this world, it’s the large, more complicated Operating at such a scale is not without its
end of the market,” he says. challenges: it requires more people – Black-
Blackstone has had a busy year, even by stone has a private equity investment team
its standards. Since we last published the of 150 plus a portfolio operations team of
PEI 300, our proprietary ranking of the more than 40 – which in turn requires more
largest funds in the business based on their management infrastructure.
five-year fundraising totals, the firm has Another potential challenge is making
launched three new investment platforms – sure the firm culture – and investment deci-
focused on life sciences, growth equity and, sion-making – is consistent globally. Black-
most recently, impact investing – and decid- stone has addressed this by structuring the
ed to convert to a C-corporation. firm as a single, global business, rather than
It’s also midway through raising what When you are at the a regionalised business.
the market expects will be the largest ever “We hold every investment we’re mak-
private equity fund. Blackstone Capital top of the PEI 300, ing globally to the same set of standards and
Partners VIII has already held a first close the way to avoid a small group of people review every invest-
on $22.2 billion and is expected to surpass ment we make. That’s forced us to narrowly
the $24.8 billion record laid down by Apollo deal competition is to define what we’re doing in corporate private
Global Management’s ninth flagship fund in equity, which is sizeable control buyouts.”
2017.
go big, Blackstone’s It’s also limited the range of investment
For Baratta, being the largest in the Joe Baratta tells to those geographies Blackstone considers
business means Blackstone can credibly tell to be more important in the scope of global
a deal counter-party the firm can deliver Isobel Markham economies.
a certain amount of equity under its own To remain nimble, Blackstone keeps
steam in a short timeframe. Its firepower the senior organisation tight: the firm has
and infrastructure means it can take on “lots around 25 private equity deal partners glob-
of M&A complexity”, such as take-privates, ally, all of which have long tenures at the
and is “viewed as a credible partner for large firm.
corporates who want to divest a large asset Blackstone’s corporate private equity
but retain a stake in the business”, Baratta arm has delivered net returns since incep-
says, pointing to the firm’s $20 billion acqui- tion of 15 percent, and its flagship private
sition alongside Canada Pension Plan In- equity funds have, on average, delivered a
vestment Board and GIC of a majority stake realised gross multiple on invested capital
of the financial and risk unit of Thomson of 2.2x, according to a presentation at the
Reuters as an example. divisions of large corporates that would have firm’s investor day in September.
While Baratta sees the mid-market as market caps above $5 billion. Our available In October Blackstone announced it
very well-capitalised, he sees less competi- market is the whole of the public market cap had acquired global life sciences investment
tion at Blackstone’s end of the market. in the world above $5 billion. That is not a firm Clarus and launched Blackstone Life
“There are many thousands of publicly small market, that’s a giant market.” Sciences, which will invest across the life
traded companies with market caps above $5 In mature and low-growth economies, cycle of companies and products within the
billion. There are, again, many thousands of corporates are focusing on core assets and key life sciences sectors. The firm plans to

26 Private Equity International • June 2019

“ is the whole
Our market
of the public
market cap
in the world “
above $5bn
Joe Baratta, Blackstone
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 Cover story

Corporate
private equity

4.6% Q1 appreciation

$3.7bn Q1 realisations across

the platform

$159bn Total AUM, up 43%

year-on-year

Source: Blackstone
Q1 2019 earnings presentation

launch its initial fund for the strategy this

quarter and, while it has not specified a tar-
get size for the vehicle, on the Q1 earnings
call, management said Clarus most recently
raised a $1 billion fund and the successor is
to likely be “multiples of that”.
“The private capital markets for life
sciences investing is one of the least
well-developed compared with any other launch a growth equity platform, which will BXG being the 10th investor in a cap table
type of investing, and it’s very fragmented,” look to invest in consumer, healthcare and of a high-profile company in the way that
Baratta says. pure technology companies. A fund for the many other growth equity firms have cho-
“You don’t have a large-scale, industry strategy is set to launch in the second half sen to do in recent years.”
champion in the life sciences industry like of the year. The impact investing platform – an-
[we’ve seen] develop in other technology.” “Our BXG growth equity platform, nounced after our interview – will be nested
Blackstone believes Clarus, a 100-person when combined with the synergies offered under the firm’s secondaries unit Strategic
organisation, can become that champion. by Blackstone’s other asset classes, is unique- Partners. It will make direct investments
“We think we can take their scale from ly positioned to add value to fast-growing and co-invest alongside existing impact
a few billion dollars of assets under man- companies in ways that other stand-alone managers, leveraging Strategic Partners’ ex-
agement over time to multiples of that growth equity firms simply cannot,” Baratta pertise across private equity, real estate and
amount.” says. infrastructure, and will focus on health and
Not long after announcing the Clarus “We also look for situations where we wellbeing, financial access, sustainable com-
deal, Blackstone hired growth equity ex- can play a truly active role alongside man- munities and green technology companies
pert Jon Korngold from General Atlantic to agement – that is, you won’t typically find in developed markets. n

June 2019 • Private Equity International 29

 Cover story

The small print

How the ranking is
The diversification and
acquisition game
determined
The 2019 PEI 300 ranking is based
on the amount of private equity direct
investment capital raised by firms
between 1 January 2014 and 1 April
2019. Expansion into new geographies and products boosted
Definitions the top 50’s fundraising efforts. By Preeti Singh
Private equity

T
For purposes of the PEI 300, the
definition of private equity is capital he top 50 of this year’s PEI For instance, HarbourVest Partners (45),
raised for a dedicated programme of 300 are a diverse bunch, but which has increased its footprint across the
investing directly into businesses. This one theme ties many of them US, Europe and Asia over the last few years,
includes equity capital for diversified together: expansion into new launched its credit platform last year. Swit-
private equity, buyouts, growth equity, product lines. zerland-headquartered Partners Group (21)
venture capital and turnaround or Diversification into oth- launched PG LIFE, a dedicated impact-at-
control-oriented distressed investment er private asset classes, expansion into new scale strategy in 2018. It has steadily built
capital. geographies and the launch of companion its private equity, real estate and credit busi-
products used to be the purview of only the nesses and been raising client capital that
Capital raised very largest managers. But in recent years could be deployed to long-hold assets.
This means capital definitively this has become more widespread, with even The key to winning limited partner trust
committed to a private equity direct mid-market firms getting in on the action. around strategy expansions? A demonstra-
investment programme. In fact, an IPEM survey found 46 percent of ble track record, Rhonda Ryan, head of Eu-
In the case of a fundraising, it European GPs expect to launch a new fund ropean private equity and debt at advisory
means the fund has had a final or strategy this year. firm Mercer, told us earlier this year.
official interim close after BC Partners (26), for example, expanded “If you’ve known the GP for some time
1 January 2014. We count the full into private credit in 2017 and in May 2018 there’s going to be a certain level of trust,
amount of a fund if it has a close launched a real estate platform. While other but there still needs to be some proof of
after this date, and we count the full asset classes don’t count towards its PEI 300 concept, such as building out the team. In
amount of an interim close that has fundraising total, the firm still added $1.2 some cases people might say we’ve moved
occurred recently, even if no official billion to its five-year fundraising total. up in size over recent years and will raise a
announcement has been made. We Permira Advisers (18), which is up two fund closer to our original strategy.” n
also count capital raised through co- places, is raising its first growth equity fund,
investment vehicles. while TPG (12), no stranger to multi-strate-
gy, just closed its first Tech Adjacencies fund
Legend on $1.5 billion (as the close was after 1 April, “If you’ve known
New company for 2019 . . . . . . . the total is not included in the fundraising
total for this PEI 300). the GP for some
Up from 2018 . . . . . . . . . . . . . . . p
The most market-moving example of
Down from 2018 . . . . . . . . . . . . q expansion-through-acquisition in the last time there’s going to
Unchanged from 2018 . . . . . . . vw 12 months was the acquisition by Toron-
to-based Brookfield Asset Management (24) be a certain level of
What does NOT count as of 62 percent of Oaktree Capital Manage-
private equity? ment. The rationale behind the transaction: trust, but there still
Funds of funds, secondaries, real to gain a strong and sizeable foothold in pri-
estate, infrastructure, hedge funds, vate credit. As Howard Marks, co-chairman needs to be some proof
debt, mezzanine and PIPEs. of Oaktree, told Private Equity International:
“[Brookfield chief executive] Bruce Flatt’s of concept, such as
NB. The PEI 300 is not a performance expression was he could spend 10 years try-
ranking, nor does it constitute investment
recommendations. ing [to build a credit arm] and maybe not building out the team”
end up with what we [Oaktree] have today.”
For a full methodology, email PEI’s
Other firms have used a mix of acqui- RHONDA RYAN
research manager, Daniel Humphrey
Rodriguez (daniel.r@peimedia.com). sitions and organic growth to expand their Mercer
product offerings and geographic reach.

30 Private Equity International • June 2019

 Five-year
2019 2018 fundraising
Rank Rank Firm total ($m) Headquarters

11 p 29 Hellman & Friedman 26,900 San Francisco

Eurazeo 12 q 10 TPG 25,611 Fort Worth

13 q 11 EnCap Investments 21,097 Houston

48
14 q 13 Vista Equity Partners 19,785 San Francisco
Paris 15 q 14 Apax Partners 18,615 London
For Paris-listed Eurazeo 16 p 18 General Atlantic 16,916 New York
diversification across products
and geographies is critical 17 q 16 Clayton, Dubilier & Rice 16,509 New York
for shareholder returns 18 p 20 Permira Advisers 16,394 London

“If you put yourself in the shoes of a 19 vw 19 Advent International 16,026 Boston
shareholder of Eurazeo, you don’t want 20 q 9 Silver Lake 15,000 Menlo Park
to be just a French buyout firm focused
on one activity,” Marc Frappier, manag- 21 p 27 Partners Group 14,726 Zug

ing partner and head of Eurazeo Cap- 22 p 28 Stone Point Capital 14,544 Greenwich, CT
ital, tells PEI. “You diversify your asset
23 p 49 Bridgepoint 14,264 London
base, diversify your geographic exposure
so you have more consistent returns for 24 p 43 Brookfield Asset Management 14,197 Toronto
your LPs, or ultimately in our case, for
25 q 23 Onex 14,106 Toronto
our shareholders.”
Acquiring stakes in other private eq- 26 vw 26 BC Partners 13,275 London
uity firms has helped Eurazeo expand
27 p 54 Genstar Capital 13,100 San Francisco
its geographical and product portfolios.
Earlier this year, the firm picked up a 25 28 p 35 PAI Partners 13,061 Paris
percent stake in Madrid-based MCH Pri- 29 p 156 Hillhouse Capital Group 12,725 Beijing
vate Equity to boost its presence in Spain.
In 2017, it acquired a 30 percent stake in 30 p 38 Leonard Green & Partners 12,238 Los Angeles
US-based Rhône Group to strengthen its 31 q 24 Insight Partners 12,236 New York
transatlantic presence.
An additional €7 billion of firepower 32 p 73 American Securities 12,000 New York

was added to Eurazeo’s arsenal last year 33 p 65 Baring Private Equity Asia 11,833 Hong Kong
when it acquired French fund of funds
34 q 15 Cinven 11,548 London
manager Idinvest Partners. It also gave
the firm expertise in private debt, venture 35 p 70 NGP Energy Capital Management 11,355 Irving
and growth capital.
36 q 25 Ardian 10,975 Paris
Eurazeo made a big push into the US
mid-market in 2016, opening a New York 37 q 34 New Mountain Capital 10,585 New York
office. Its newest investment division Eu- Goldman Sachs Merchant Banking
38 q 37 10,500 New York
razeo Brands, launched in 2017, operates Division
out of the city and focuses on consumer 39 p 50 Tiger Global Management 10,250 New York
and retail companies across beauty fash-
ion, home, leisure, wellness and food. Its 40 p 85 Quantum Energy Partners 10,040 Houston

Rhône Group stake, meanwhile, gives the 41 p 98 PAG 9,950 Hong Kong
French manager a foothold in the real
42 q 21 Riverstone Holdings 9,904 New York
estate market through Rhône’s joint ven-
ture with WeWork. 43 q 31 L Catterton 9,838 Greenwich, CT
Now it is picking up its activity in Asia.
44 q 36 Affinity Equity Partners 9,800 Hong Kong
In April, sovereign wealth fund China
Investment Corporation chose the firm 45 p 59 HarbourVest Partners 9,599 Boston
to manage an up to €1.5 billion China
46 q 39 GTCR 9,100 Chicago
Growth Fund backing French and Euro-
pean companies that want to invest in Chi- 47 p 108 Roark Capital Group 9,000 Atlanta
na. As Frappier says: “Scaling our business 48 — Eurazeo* 8,956 Paris
means that if we want to pool growth [in-
vesting] and international [investing] that 49 q 32 Ares Management 8,650 Los Angeles
means we have a team on the ground.” 50 p 265 Adams Street Partners 8,498 Chicago

*Includes Idinvest funds

June 2019 • Private Equity International 31

 Cover story

The consumer is
alive and kicking
Specialists in the strategy made impressive leaps in the
2019 ranking of five-year fundraising totals, writes Alex Lynn

P
rivate equity firms focused on “Gone are the days when a big market-
the consumer sector have had a ing budget was a key driver, if not the key
challenging time over the years driver, of gaining market share,” Hadley
with innovation and technol- Mullin, senior managing director at TSG,
ogy disrupting the market as tells Private Equity International.
well as the well-publicised dif- L Catterton (43), the world’s largest
ficulties of the retail and casual dining sub- consumer-focused firm, has held steady
segments. in the top 50 in the last two years, though
Two pure-play consumer specialists are it slid 12 places this year. Its bespoke ap-
swimming against the tide to climb up the proach over the years includes a lot of re-
PEI 300. New York’s Sycamore Partners search and pattern recognition, and “skat-
(51) climbed 82 places from last year. The ing to where the puck is going”, according
consumer and retail firm raised $8.5 billion to Scott Dahnke, global co-chief executive.
over the past five years and is investing Syc- The firm is deploying its 2016-vintage
amore Partners III, which closed above tar- $2.75 billion global fund and seeking more
get on $4.75 billion in July 2018. Its portfo- than $2 billion for its fourth Europe fund,
lio includes US retailer Staples, department third Asia fund and its fourth growth equity
store Belk and pop culture icon Hot Topic. fund, according to PEI data.
San Francisco-based TSG Consumer That many of these players are US-
Partners (69) is another outfit making im- based is no coincidence: investor appetite
pressive strides. The firm held a $4 billion for sector-focused funds such as consumer
final close in February on TSG8 and its
parallel fund, which helped it shoot up 65
“Gone are the days or retail is generally more muted in Eu-
rope than it is in the US. This is due to the
places. The firm, which has solely target-
ed consumer businesses since its launch in
when a big marketing geographical challenges of operating as a
specialist in a pan-European context as well
1987, has raised $6.5 billion over the past
five years.
budget was a key as the mixed performance of these funds,
Janet Brooks, managing director for place-
TSG’s success can be attributed in part
to its willingness to embrace the digital
driver, if not the key ment firm Monument Group, told PEI in
February.
revolution; its current portfolio includes
five e-commerce businesses, more than any
driver, of gaining “Right now we see many European in-
vestors being particularly cautious in this
other sub-segment except food and bever-
ages, of which it owns six. The e-commerce
market share” area as a result of the turmoil in the retail
space caused by the wholesale move from
portfolio includes German bicycle retailer physical to digital together with fear of
Canyon and US fashion retailer REVOLVE, HADLEY MULLIN greater economic uncertainty and poten-
which deploys social media influencers to TSG tially lower consumer expenditure going
boost marketing. forward,” she said. ■

32 Private Equity International • June 2019

 Five year
2019 2018 fundraising
Rank Rank Firm total ($m) Headquarters

51 p 133 Sycamore Partners 8,468 New York

China Everbright 52
53
q
p
47
75
TDR Capital
Pamplona Capital Management
8,327
8,146
London
London
Limited 54 q 30 Platinum Equity 8,000 Beverly Hills

95 p 55 p 82 H.I.G. Capital 7,735 Miami

56 p 143 Astorg Partners 7,730 Paris
Hong Kong 57 p 79 TCV 7,730 Palo Alto

Hong Kong’s China Everbright 58 q 46 Francisco Partners 7,525 San Francisco

shot up the ranking to break 59 p 102 Welsh, Carson, Anderson & Stowe 7,470 New York
into the top 100 CITIC Private Equity Funds
60 p 88 7,470 Beijing
Management
The asset manager – a subsidiary of Morgan Stanley Investment
61 p 62 7,408 New York
Management
state-owned conglomerate China
Everbright Group – climbed 171 places 62 p 124 Audax Group 7,158 Boston
after raising around $5.2 billion over the 63 q 60 Castlelake 7,103 Minneapolis
past five years. It manages 32 primary 64 p 105 Lightspeed Venture Partners 6,906 Menlo Park
market vehicles and four funds of funds. 65 p 68 The Jordan Company 6,830 New York
China Everbright plans to increase 66 p 72 Triton 6,686 London
its US dollar assets under management
67 q 55 Providence Equity Partners 6,685 Providence, RI
after domestic regulation dampened
68 p 168 Clearlake Capital Group 6,527 Santa Monica
yuan-denominated fundraising last year.
69 p 134 TSG Consumer Partners 6,500 San Francisco
The firm will raise the percentage of
its foreign asset allocation and boost its 70 q 51 New Enterprise Associates 6,450 Chevy Chase, MD
dollar-denominated funds to maintain 71 q 44 Hg Capital 6,258 London
stable AUM growth this year, according 72 q 67 Berkshire Partners 6,250 Boston
to an annual results presentation in April. 73 q 52 BDT Capital Partners 6,200 Chicago
“We definitely are looking into a 74 q 63 Thomas H. Lee Partners 6,187 Boston
bigger number of USD fundraisings,”
75 q 53 Centerbridge Partners 6,166 New York
chief financial officer Richard
76 q 66 Accel 6,085 Palo Alto
Tang told PEI in April. The firm is
strengthening its institutional client 77 p 110 Oak Hill Capital Partners 6,040 New York
relationship department and is in 78 q 57 Investindustrial 5,944 London
talks with fundraising consultants and 79 p 83 Kelso & Company 5,859 New York
intermediaries. 80 p 116 Montagu Private Equity 5,771 London
Its heightened appetite for dollars Hermosa Beach,
81 q 61 Marlin Equity Partners 5,740
comes after China tightened rules CA
on asset management firms in April 82 p 142 Oaktree Capital Management 5,656 Los Angeles
last year to crack down on domestic 83 p 135 Inflexion Private Equity 5,642 London
shadow banking and overleveraging.
84 q 45 Equistone Partners Europe 5,633 London
Yuan-denominated vehicles fell to just 7
85 q 40 Cerberus Capital Management 5,592 New York
percent of new Chinese fundraises last
86 q 64 ArcLight Capital Partners 5,580 Boston
year, according to PitchBook’s Private
Equity in China report. 87 q 78 Madison Dearborn Partners 5,553 Chicago
The asset manager is also increasing 88 p 474 Harvest Partners 5,550 New York
its focus on cross-border inbound 89 p 127 Altor Equity Partners 5,490 Stockholm
and outbound investments. The firm 90 q 58 Veritas Capital 5,430 New York
completed several notable deals overseas 91 q 48 TA Associates 5,300 Boston
last year, acquiring Norway-based Boreal
92 p 103 TowerBrook Capital Partners 5,300 New York
Holdings via its global infrastructure
93 q 80 Nordic Capital 5,277 Stockholm
fund and helping an existing portfolio
company, US manufacturer Burke 94 q 81 Sequoia Capital 5,172 Menlo Park

Porter, expand into China by building a 95 p 266 China Everbright Limited 5,155 Hong Kong
factory. The group’s real estate business 96 p 160 Siris Capital Group 5,076 New York
EBA Investments made its first overseas 97 p 153 Littlejohn & Co 5,040 Greenwich, CT
investment into US asset manager Arrow 98 q 77 Summit Partners 5,002 Boston
RE in April last year.
99 q 33 MBK Partners 4,940 Seoul
100 q 74 GI Partners 4,800 San Francisco

June 2019 • Private Equity International 33

 Cover story

The rise of funds

of funds
Those who sounded the death knell for funds of funds may have
spoken too soon: this year’s PEI 300 shows these managers still
have a trick or two up their sleeves, Adam Le reports

T
raditional funds of funds have launched this year. It listed on the NAS-
been upping their game in re- DAQ in 2017 and had around $469 billion
cent years. Gone are the days in assets under management and supervi-
when fund of funds managers sion as of last December.
relied solely on primary fund Pantheon’s business has evolved to in-
commitments as their main clude real assets funds of funds, secondaries
source of investment strategy; today firms and co-investments. The firm, which was
such as Partners Group (21) and Ardian acquired by Affiliated Managers Group in
(36) have expanded their platforms to be- 2010, jumped 67 spots this year, having
come direct investors across multiple asset raised $4.5 billion over the last five years.
classes. Traditional funds of funds have been
Hamilton Lane (101), GCM Grosvenor taking advantage of the mountains of data
(102) and Pantheon (103) have also evolved they collect through fund commitments
somewhat from their traditional fund of and are hiring data scientists and building
funds roots. The bulk of these firms’ in- programmes to process, analyse and inter-
vestment activities remain fund of funds pret data for their clients. Hamilton Lane,
activity: 91 percent of Hamilton Lane’s for example, has more than 4,200 funds in
$36 billion invested in private markets last its database, while Schroder Adveq has been
year was primary fund commitments, while using artificial intelligence to rank fund
more than half of Pantheon’s $42 billion in managers and create investment lists.
assets under management as of 30 Septem- Lane has grown significantly since its first GCM Grosvenor makes its debut ap-
ber were primary commitments to private fund of funds vehicle in 1998 – a $122 mil- pearance in the ranking this year. The Chi-
equity funds. lion fund that invested capital from Swedish cago-headquartered firm manages more
The fund of funds community has un- pension AP7, Hackensack University Med- than $50 billion in assets and has moved
dergone an evolution in recent years with ical Center Retirement Plan and the Ser- away from its early fund of funds roots: it
a split between true fund of funds manag- vice Employees International Union. has backed some novel deals on the second-
ers – typically smaller shops that focus on Hamilton Lane launched its first sec- aries front, including the restructuring of
a particular fund strategy – and large-scale ondaries fund in 2005 with a $360 million deal-by-deal assets held by Argonne Capital
asset managers who have expanded their in- vehicle, and the strategy is set to grow into a continuation fund in May 2018, and
vestment style and remit. eight-fold if the firm hits the $3 billion has raised separately managed accounts as
Bala Cynwyd-headquartered Hamilton target for its fifth secondaries fund, which well as direct investment funds. n

34 Private Equity International • June 2019

 Five-year
2019 2018 fundraising
Rank Rank Firm total ($m) Headquarters

101 p 107 Hamilton Lane 4,749 Bala Cynwyd, PA

Abraaj 102
103 p
–
170
GCM Grosvenor
Pantheon
4,553
4,534
Chicago
London
129 q 104 q 42 RRJ Capital 4,500 Hong Kong

Dubai 105 q 84 Charlesbank Capital Partners 4,500 Boston

106 q 87 Patria Investmentos 4,494 Sao Paulo
The fallen emerging markets 107 – GGV Capital 4,291 Menlo Park
investor raised $3.29bn in the 108 q 89
Waterland Private Equity
4,151
Bussum,
five years to March Investments Netherlands
109 p 158 Sun Capital Partners 4,100 Boca Raton
Not many firms have captured the 110 q 90 Kayne Anderson Capital Advisors 4,025 Los Angeles
industry’s attention like The Abraaj 111 vw 111 Andreessen Horowitz 3,987 Menlo Park
Group has over the last year, and for all
112 q 92 CCMP Capital Advisors 3,943 New York
the wrong reasons. As this issue goes
113 q 93 Norwest Venture Partners 3,900 Palo Alto
to press, the firm’s founder Arif Naqvi
faces extradition to the US over charges 114 q 106 IDG Capital 3,765 Beijing

including misappropriating funds and 115 – Lindsay Goldberg 3,750 New York
securities and wire fraud, while former 116 q 101 First Reserve 3,737 Stamford, CT
executives Mustafa Abdel-Wadood and 117 p 140 Hermes GPE 3,731 London
Sev Vettivetpillai also face charges. 118 q 96 CDH Investments 3,689 Hong Kong
Yet the firm’s capital-raising efforts
119 q 95 The Riverside Company 3,635 New York
over the last five years cannot be
120 q 56 AEA Investors 3,615 New York
overlooked. Abraaj dropped 60 places in
this year’s PEI 300, having raised $3.29 121 p 292 YunFeng Capital 3,600 Shanghai
billion across five commingled funds and 122 p 201 Bessemer Venture Partners 3,450 Redwood City
one separately managed account. 123 p 187 Index Ventures 3,426 Geneva
Two of these vehicles have been 124 p 161 Accel-KKR 3,400 Menlo Park
sold off already. The largest is the
125 p 180 Yorktown Partners 3,385 New York
2015-vintage $1 billion Growth Markets
126 q 125 Hahn & Co 3,343 Seoul
Health Fund – the very fund at the
centre of fraud allegations against the 127 q 115 Hony Capital 3,324 Beijing
firm. According to the Securities and 128 p 145 Lime Rock Partners 3,322 Westport, CT
Exchange Commission’s civil complaint 129 q 69 The Abraaj Group 3,291 Dubai
filed in April, $230 million from the 130 q 76 IK Investment Partners 3,278 London
Health fund was misappropriated,
131 q 109 Crestview Partners 3,256 New York
beginning in December 2016. In early
132 p 146 Ridgemont Equity Partners 3,205 Charlotte
May, TPG said its growth platform had
agreed to acquire the fund, renaming it 133 q 112 HGGC 3,174 Palo Alto
Evercare Health Fund. Members of the 134 p 285 Gryphon Investors 3,105 San Francisco
health fund’s LPAC said in a statement 135 p 216 Lenovo Group 3,100 Hong Kong
they remained “deeply committed” to 136 q 71 Olympus Partners 3,040 Stamford, CT
the fund and its mission.
137 q 100 KSL Capital Partners 3,005 Denver
In mid-April, Colony Capital said
138 p 152 Tailwind Capital Partners 2,950 New York
it had closed the acquisition of Abraaj’s
Latin America private equity platform, 139 p 210 Qiming Venture Partners 2,912 Shanghai
including its $300 million Latin America 140 q 118 IVP 2,900 Menlo Park
Fund II. Vehicles that remain unsold 141 q 119 Great Hill Partners 2,879 Boston
are the $526 million Abraaj Turkey 142 q 91 ACON Investments 2,872 Washington DC
Fund, which US asset management
143 q 121 Rhône Group 2,856 New York
firm Franklin Templeton was reported
144 q 86 Vitruvian Partners 2,819 London
to be in talks to acquire as of mid-May,
while emerging markets specialist Actis 145 q 97 CITIC Capital 2,813 Hong Kong

is understood to have been in talks to 146 q 123 IFC Asset Management Company 2,791 Washington DC
acquire five of Abraaj’s Africa funds – 147 p 260 Palladium Equity Partners 2,782 New York
including the $990 million Africa Fund 148 p 178 BlackRock 2,771 New York
III and the $375 million North Africa 149 130 WL Ross & Co. 2,763 New York
q
Fund II.
150 q 120 ICONIQ Capital 2,705 San Francisco

June 2019 • Private Equity International 35

 Cover story

Tech, tech, tech, boom!

The good times are rolling for technology
and innovation-focused managers, reports Carmela Mendoza

F
rom software to human re- jing-based Gaorong Capital (193). Morn-
source technology, fintech and ingside, founded by Hong Kong’s Chan
artificial intelligence, investors family in the late 1980s and active in AI
are paying attention and snap- and medical devices, moved up 30 places.
ping up companies that have TMT-focused Gaorong collected $500 mil-
got long years of investment lion for its fourth flagship fund last year and
cycles ahead of them. has backed social retail start-up Beidian and
Thoma Bravo (8) raised the largest fund coffee chain Coffee Box.
ever for enterprise software companies in Outperformance is feeding investor ap-
January, amassing $12.6 billion against a $9 petite. Data from Cambridge Associates
billion target for its 13th flagship vehicle. In show private equity-backed technology
April last year it collected $2.4 billion for its investment delivered the highest returns
Discover II fund, which will make smaller (20.6 percent) of all sectors in the first half
investments in mid-market software com- of 2018.
panies. “Private equity funds have made a cal-
Silver Lake (20), another large-scale tech culated bet on overweighting technology,
investor, and San Francisco’s Vista Equity which has paid off,” Nicolas Schellenberg,
Partners (14) gathered an aggregate $34.8 head of EMEA PE & VC Research at Cam-
billion in the five-year period to March bridge Associates, said in a statement ac-
2019. companying the report.
New York-based Thrive Capital (188) “That outperformance is not the result
– founded by Josh Kushner, brother of US of luck or chance.”
President Donald Trump’s son-in-law and That outperformance is, naturally, at-
advisor Jared Kushner – was one of the big- tracting generalist managers, who have been
gest climbers this year, rising 103 spots in capitalising on the tech boom by launch-
2018 on the back of a $1 billion raise for its ing smaller dedicated funds – sometimes
sixth fund focused on internet and software labelled “growth” vehicles – which invest
investments in North America and Latin smaller equity cheques.
America. The firm counts collaboration KKR (3), CVC Capital Partners (4) and
tool Slack and direct-to-consumer beauty
“Private equity funds Apax Partners (15) have all raised such funds.
company Glossier among its portfolio com- In January, Carlyle Group (2) closed its
panies.
have made a calculated fourth Europe Technology Partners fund on
San Francisco-based Matrix Partners its €1.35 billion hard-cap, more than twice
(160), which has backed virtual reality
bet on overweighting the amount raised for its predecessor. This
company Oculus and question-and-answer fund has ratcheted carried interest, charging
website Quora, jumped 81 spots. The firm
technology which has 20 percent carry until it returns 2.25x cost to
has been steadily growing its China and In- limited partners, at which point it will jump
dia pool in recent years, raising more than
paid off” to 25 percent.
$2 billion for the markets since 2014. Carlyle’s head of investor relations Mi-
Two notable Chinese firms that rose NICOLAS SCHELLENBERG chael Arpey said the terms are “consistent
to this part of the list are Shanghai-based Cambridge Associates with what other top-performing technology
Morningside Venture Capital (189) and Bei- funds have received”. n

36 Private Equity International • June 2019

 Five-year
2019 2018 fundraising
Rank Rank Firm total ($m) Headquarters

151 q 122 Digital Sky Technologies 2,700 Moscow

BGH Capital 152 p 224 Bernhard Capital Partners 2,650 Baton Rouge
153 p 304 Waud Capital Partners 2,616 Chicago
192 154 q 150 Cornell Capital 2,608 New York

Melbourne 155 p 167 ABRY Partners 2,600 Boston

156 p 239 Cathay Capital Private Equity 2,562 Paris
First-time manager BGH raised 157 q 132 Charterhouse Capital Partners 2,536 London
Australia’s largest debut fund, 158 p 303 Alvarez & Marsal Capital Partners 2,531 Greenwich, CT
closing on almost $2bn last 159 q 136 Spectrum Equity 2,452 Boston
year
160 p 241 Matrix Partners 2,449 San Francisco
161 q 137 Pine Brook 2,435 New York
Melbourne-headquartered BGH Capital
made its debut in the PEI 300 this year. 162 q 138 Primavera Capital Group 2,426 Beijing
The first-time manager caught a lot 163 q 139 Quadrant Private Equity 2,392 Sydney
of people in the industry by surprise, 164 q 337 Capvis AG 2,390 Baar, Switzerland
having raised the biggest debut fund 165 q 157 FountainVest Partners 2,366 Hong Kong
focused on Australia and New Zealand
166 p 240 Freeman Spogli & Co 2,360 Los Angeles
in May 2018, closing on A$2.6 billion
($1.9 billion; €1.6 billion). 167 q 141 JP Morgan Asset Management 2,355 New York

BGH Capital Fund I is also the 168 q 148 Founders Fund 2,354 San Francisco
second-largest fund raised in the 169 p 366 Vivo Capital 2,349 Palo Alto
country. Longstanding firm Pacific 170 q 144 Searchlight Capital Partners 2,309 New York
Equity Partners (187) closed on A$4
171 p 217 Navis Capital Partners 2,300 Kuala Lumpur
billion for its fourth vehicle in 2008, PEI
172 q 147 HitecVision 2,275 Stavanger
data show.
BGH was founded by TPG head 173 p 252 Kinderhook Industries 2,250 New York
of Asia Ben Gray in 2017 along with 174 p 253 Riverwood Capital 2,250 Menlo Park
ex-TPG partner Simon Harle and 175 p 407 Linden Capital Partners 2,250 Chicago
ex-Macquarie Capital Australia chief 176 p 438 AE Industrial Partners 2,232 Boca Raton
Robin Bishop. It began fundraising in
177 p 209 General Catalyst Partners 2,230 Cambridge, MA
October that year with a A$2 billion
178 q 151 Orchid Asia 2,220 Hong Kong
target and A$2.5 billion hard-cap, and
held a first close on more than A$2.3 179 q 94 Kohlberg & Company 2,200 Mount Kisco, NY
billion in February 2018. New York 180 q 177 Battery Ventures 2,200 Boston
State Teachers’ Retirement System, 181 p 325 JMI Equity 2,200 Baltimore
Washington State Investment Board and 182 p 208 Mid Europa Partners 2,191 London
San Francisco Employees’ Retirement
183 q 117 OrbiMed Advisors 2,178 New York
System are investors in the fund, PEI
184 p 408 Lovell Minnick Partners 2,176 Radnor, PA
data show.
Its strategy: invest in mid-market 185 p 272 LLR Partners 2,175 Philadelphia
companies, while maintaining the scale 186 q 104 Sentinel Capital Partners 2,150 New York
required to execute larger buyouts and 187 p 218 Pacific Equity Partners 2,146 Sydney
flexibility to pursue smaller growth 188 p 291 Thrive Capital 2,100 New York
deals. Along with the its Aussie buyout
189 p 219 Morningside Venture Capital 2,099 Shanghai
peers PEP and Quadrant Private Equity
190 p 346 SSG Capital Partners 2,096 Hong Kong
(163), BGH will compete in the same
space as pan-Asian firms Affinity Equity 191 p 259 Energy Spectrum Capital 2,087 Dallas
Partners and Baring Private Equity Asia, 192 – BGH Capital 2,085 Melbourne
as well as global heavyweights KKR 193 – Gaorong Capital 2,083 Beijing
(3), TPG (12) and Bain Capital (6). 194 p 223 EMR Capital 2,047 Hong Kong
BGH has so far struck one deal from its
195 q 164 FFL Partners 2,022 San Francisco
mega-fund since final close, the takeover
of education company Navitas in a deal 196 q 114 Hopu Investment Management 2,000 Beijing

valuing the company at A$2.3 billion. 197 q 165 Odyssey Investment Partners 2,000 New York
The deal, sealed by BGH alongside 198 q 172 Tailwater Capital 1,989 Dallas
AustralianSuper, is also the biggest 199 p 263 Frazier Healthcare Partners 1,986 Seattle
transaction by a domestic buyout fund.
200 q 171 Post Oak Energy Capital 1,950 Houston

June 2019 • Private Equity International 37

 Cover story

Asia’s emerging
mid-market
The region’s growth story, urbanisation and rising middle
class are luring private equity capital, writes Alex Lynn

A
sia Pacific-headquartered appealing investment destinations across 10
firms are taking up a larger emerging markets globally.
share of global fundraising. Asia stalwarts have enjoyed some impres-
Firms in the region amassed sive leaps in this year’s list. Beijing’s Hillhouse
$142.6 billion over the five- Capital (29) became the top Asian firm after
year period to March 2019, jumping 127 places on the back of a $10.6 bil-
compared with $128.5 billion in the previous lion fundraise, the largest sum ever collected
year’s PEI 300 ranking. for a pan-Asian vehicle and around 15 percent
The main attraction: Asia’s rising middle more than KKR hauled in for its Asian Fund
class and its increasing purchasing power, III, which closed on $9.3 billion in June 2017.
coupled with the region’s increasing maturity Hong Kong’s Baring Private Equity Asia
as a private equity market. Regional power- (33) climbed 32 places after raising $11.8 bil-
house China, for instance, has gradually shift- lion over the past five years and its compatriot
ed from a growth to a buyout play due in part PAG (41) rose 57 places.
to the country’s slowing economy, declining This year’s PEI 300 also includes new
interest in traditional industries, succession joiners from Tokyo, Mumbai and Singapore.
planning among first-generation entrepre- Marunouchi Capital (217) entered the rank-
neurs and newly available capital. ings despite closing its second fund below
Private equity performance in Asia has target in October.
been solid; industry returns rose to a 12.4 Mumbai’s ChrysCapital (245) entered the
percent median net internal rate of return in list for the first time after climbing 209 places
2018, and top-quartile funds with vintages be- from last year’s list. The firm – which has raised
tween 2012 and 2015 are forecasted to deliver around $1.5 billion over the period – closed its
net IRRs above 20 percent, according to Bain eighth India-focused vehicle in January at $867
& Company. million, above its $850 million hard-cap.
Limited partners are taking note and Shanghai’s C-Bridge Capital (238), which
ramping up their commitments to the region. provides growth capital, late-stage and ma-
Teachers’ Retirement System of the State of ture-stage investments for healthcare busi-
Illinois revealed in its trustees meeting last nesses, debuted with a five-year fundraising
year that it will focus on Asia in 2019 as part total of $1.5 billion, boosted by the $850
of its private equity tactical plan. Christopher million it raised for its third healthcare fund
Ailman, CIO of California State Teachers’ in May after raising its hard-cap. It’s already
Retirement System, told PEI in May the back in market with Fund IV.
pension could double or triple its less than $2 “China has gradually Singaporean real estate behemoth GLP
billion exposure to Asia in the next three to (232) also made a dramatic entry to the world
five years. shifted from a growth of private equity in July by raising 10 billion
Respondents to the latest EMPEA Global yuan ($1.6 billion; €1.3 billion) for Hidden
Limited Partners Survey indicated they view to a buyout play” Hill Capital, a fund targeting Chinese logis-
South-East Asia, China and India as the most tics companies. n

38 Private Equity International • June 2019

 Five-year
2019 2018 fundraising
Rank Rank Firm total ($m) Headquarters

201 p 257 Portobello Capital 1,934 Madrid

Fondo FSI 202 q 175 Old Ironsides Energy 1,853 Boston

247 203 q 176 American Industrial Partners 1,850 New York

204 p 284 Greenbriar Equity Group 1,846 Rye, NY
Milan 205 — Trident Capital 1,842 San Mateo
206 — The Edgewater Funds 1,840 Chicago
Italian private equity firms are
something of a rarity in the PEI 207 p 369 ECI Partners 1,840 London
300; only two made it into the 208 q 179 Brentwood Associates 1,838 Los Angeles
rankings this year 209 q 181 DFJ 1,834 Menlo Park
210 p 248 Denham Capital Management 1,825 Boston
Fondo FSI, a spin-out from Italian
211 q 128 Kleiner Perkins Caufield & Byers 1,800 Menlo Park
sovereign wealth fund Fondo Strategico
212 p 286 Menlo Ventures 1,800 Menlo Park
Italiano, is the largest of these. The Milan-
headquartered growth equity firm closed 213 — PPC Partners 1,800 Chicago
its first fund on €1.4 billion in February 214 — Thompson Street Capital Partners 1,790 St. Louis
– the largest amount ever raised for a 215 q 186 STIC Investments 1,789 Seoul
debut Italy-focused vehicle and Europe’s 216 p 331 Redpoint China Ventures 1,780 Menlo Park
third-largest debut fund targeting a single
217 — Marunouchi Capital 1,739 Tokyo
country since at least 2008.
218 — Cressey & Company 1,725 Chicago
The close saw Fondo FSI enter the
PEI 300 at 247. The fund attracted 219 q 190 IMM Private Equity 1,716 Seoul

capital from the likes of Kuwait 220 q 194 Shunwei Capital Partners 1,684 Beijing
Investment Authority, Singapore’s 221 p 349 Atlas Holdings 1,675 Greenwich, CT
government investor Temasek and 222 p 250 Livingbridge 1,666 London
France’s Tikehau Capital. Italian 223 q 214 HTC Corporation 1,660 Taipei
institutional investors committed 39
224 q 197 One Equity Partners 1,650 New York
percent of the capital, with international
225 p 350 Venrock 1,629 Palo Alto
institutions providing 23 percent.
“Limited partners were concerned 226 q 199 Oakley Capital Private Equity 1,629 London
about Italy’s economy being impacted 227 p 307 The Raine Group 1,615 New York
by large government debt, which can 228 q 202 Norwest Equity Partners 1,600 Minneapolis
be a negative factor to some sectors,” 229 — Valor Equity Partners 1,594 Chicago
chief executive Maurizio Tamagnini told
230 q 203 FTV Capital 1,581 San Francisco
Private Equity International in February.
231 q 204 Altamont Capital Partners 1,573 Palo Alto
These concerns were “less relevant” to
FSI’s fundraise because 70 percent of the 232 — GLP 1,562 Singapore
portfolio’s revenue, for example, comes 233 q 149 GSR Ventures 1,552 Beijing
from outside the country through export- 234 — Andera Partners 1,546 Paris
led business, he noted. 235 p 267 EagleTree Capital 1,532 New York
Fund I may seem like a lot of capital
236 q 211 GoldPoint Partners 1,525 New York
for Italy, given that it is already the
237 q 184 Trive Capital 1,525 Dallas
country’s third-largest in history, but
FSI appears to have had little trouble 238 — C-Bridge Capital 1,524 Shanghai

sourcing deals. It has already deployed 239 q 213 Exponent Private Equity 1,518 London
approximately 25 percent of the vehicle 240 p 363 Rothschild Merchant Banking 1,515 Paris
across four investments and one bolt-on. 241 q 215 Boyu Capital 1,510 Hong Kong
These were acquired at valuations below 242 126 Foundry Group 1,505 Boulder, CO
q
the average for European leveraged
243 q 227 Vistria Group 1,501 Chicago
buyouts, investor director Marco Tugnolo
244 q 234 Flagship Pioneering 1,490 Cambridge, MA
told PEI. The firm has expanded its team
accordingly, including the appointment 245 p 454 ChrysCapital 1,477 Mumbai
of Carlo Moser, a former partner at 246 p 274 MidOcean Partners 1,475 New York
Italian private equity firm Investitori 247 — Fondo FSI 1,468 Milan
Associati, as investment director in Q4 248 — Webster Equity Partners 1,465 Waltham, MA
2018. FSI now has 34 staff operating
249 p 371 True Ventures 1,464 Palo Alto
from its Milan office.
250 — China Renaissance Group 1,459 Beijing

June 2019 • Private Equity International 39

 Cover story

The pulling power of

profit-with-purpose
Impact investing has made a mark in the past year,
despite recent negative headlines, writes Rod James

I
mpact investing has taken a reputation- with its Global Impact Fund, while Partners
al hit in recent months. The college Group’s (21) PG LIFE, a cross-asset fund
admissions scandal that has enveloped targeting private equity, real estate, debt and
Bill McGlashan, former chief executive infrastructure, is seeking $1 billion, part of
of TPG’s impact vehicle Rise Fund, has the €16 billion of capital the group expects
given fuel to critics who accuse manag- to raise in 2019. Hamilton Lane (101) had
ers of “greenwashing”, making exaggerated raised $7.5 million for its debut impact fund
claims about their social or environmental by October.
credentials. And there is a dwindling but While the big firms will take the head-
still influential band who believe returns and lines, a couple of new entrants in this section
purpose do not go together. of the PEI 300 demonstrate the broader suc-
The longer term trends, however, are cess that purpose-driven private equity has
only going one way. In April, a report by the achieved in the past 12 months.
Global Impact Investing Network put im- Milan-headquartered Ambienta (281)
pact assets under management at $502 bil- Bill McGlashan: admissions scandal has given has raised $1.3 billion over the past five
lion at end-December 2018. The non-profit fuel to critics years to invest in companies driven by en-
identified 1,300 impact investors globally vironmental trends. The firm hit a €635
across private equity, venture capital, fixed million final close on Ambienta III in May
income, real asset and public equities. 2018, exceeding its target of €500 million,
The same month, a presentation by in a fundraise that PEI described at the time
StepStone Group’s European head David as “considerably oversubscribed”.
Jeffrey at Invest Europe’s Investors’ Forum “Increasingly, The firm takes control or minority po-
in Geneva noted that impact funds targeted sitions of between €30 million and €100
over $22 billion in 2018, up from $18 billion we are finding million in European businesses that focus
in the previous year, with for-profit manag- on resource efficiency and pollution con-
ers comprising the majority of those. private placement trol. This need for more industries to have
“Increasingly, we are finding private greener and more sustainable practices is a
placement memorandums with ‘sustaina- memorandums $2 trillion opportunity, the firm believes.
ble’, ‘responsible’ and ‘impact’ written all Also making an entrance is the private
over them,” Jeffrey said. with ‘sustainable’, equity arm of Thrivent Financial (273), a
Last month, Blackstone (1) became the not-for-profit, membership-based financial
latest big name to get into the game. Sitting ‘responsible’ and services organisation based in Minneapolis.
within its secondaries unit Strategic Partners, Founded by the Lutheran Church but now
its new impact platform will make direct ‘impact’ written all open to any denomination, the firm raised
investments and co-investments alongside $1.3 billion for private equity in the past five
existing impact managers, making use of the over them” years including a 2017-vintage, $400 million
secondaries unit’s huge number of GP rela- fund of funds and a $225 million growth eq-
tionships. The strategy will be led by Tanya DAVID JEFFREY uity/VC fund of the same vintage. The par-
Barnes from Goldman Sachs (see p. 2). StepStone ent and its members give more than $200
KKR (3) has been in market since August million to charity. n

40 Private Equity International • June 2019

 Five-year
2019 2018 fundraising
Rank Rank Firm total ($m) Headquarters

251 p 258 Legend Capital 1,457 Beijing

NewView Capital 252

253 p
—
336
Bowmark Capital
VIG Partners
1,451
1,450
London
Seoul
268 254 p 427 Versant Ventures 1,445 San Francisco

Burlingane, CA 255 q 159 JAFCO 1,441 Tokyo

256 q 226 Nautic Partners 1,430 Providence, RI

NewView Capital, which 257 — Wellspring Capital Management 1,420 New York
spun out of VC giant New 258 p 404 Foresite Capital Management 1,418 San Francisco
Enterprise Associates, is a 259 q 228 Vector Capital 1,410 San Francisco
direct secondaries firm with a 260 q 196 Horsley Bridge Partners 1,401 San Francisco
five-year fundraising total of
261 q 229 One Rock Capital Partners 1,396 New York
$1.35bn
262 — Mayfair Equity Partners 1,390 London

Most spin-outs involve an element of 263 q 232 Clarus Ventures 1,380 Cambridge, MA
friction, a sense that a captive team has 264 q 182 Spark Capital 1,380 Boston
grown too big for its boots and wants Multiples Alternate Asset
265 q 233 1,375 Mumbai
to strike out on its own. This wasn’t the Management
case with NewView Capital. 266 q 235 VMG Partners 1,362 San Francisco
In December, Goldman Sachs, 267 — Scout Energy Partners 1,360 Dallas
Hamilton Lane (101) and 18 other 268 — NewView Capital 1,350 Burlingame, CA
investors put up $1.4 billion to purchase 269 q 238 Perella Weinberg Partners 1,350 New York
31 direct stakes held in four different
270 q 189 Deutsche Beteiligungs AG 1,336 Frankfurt
funds managed by New Enterprise
271 p 315 BlueRun Ventures 1,332 Menlo Park
Associates (70), the world’s largest
Trilantic Capital Partners North
venture capital firm. At the same time, 272 q 129 1,330 New York
America
a team led by general partner Ravi
273 — Thrivent Financial 1,310 Minneapolis
Viswanathan span out of NEA to form
NewView, which would manage the 274 q 166 Peak Rock Capital 1,300 Austin

acquired assets. 275 q 154 Arsenal Capital Partners 1,300 New York
The move was driven by necessity; 276 — Lead Edge Capital 1,299 New York
for a long time NEA has struggled 277 q 243 Chequers Capital 1,292 Paris
with unrealised investments, in the 278 q 244 Aquiline Capital Partners 1,290 New York
hundreds, sister publication Secondaries
279 q 247 Wynnchurch Capital 1,273 Rosemont, IL
Investor wrote at the time. Many of these
280 — Summa Equity 1,269 Stockholm
businesses could be a great success with
more care and capital, two things your 281 — Ambienta 1,266 Milan
typical venture firm is not designed to 282 p 435 Highland Europe 1,262 London
provide beyond a certain point. NewView 283 — Life Sciences Partners 1,259 Amsterdam
Capital is effectively a direct secondaries 284 — WindRose Health Investors 1,258 New York
firm, buying portfolios of private 285 q 254 The Sterling Group 1,250 Houston
companies from NEA and managing
286 q 195 Apax Partners SAS 1,239 Paris
them to exit. According to a source, if
287 q 212 NovaQuest Capital Management 1,238 Raleigh, NC
successful, the firm will continue in the
same vein, buying stakes in companies 288 q 255 BV Investment Partners 1,237.00 Boston
owned by VC firms that want liquidity as 289 q 231 Partech 1,226.24 Paris
well as portfolio investments “orphaned” 290 — Juniper Capital 1,219.50 Houston
by the departure of a sponsor from a firm. 291 q 261 Gilde Buy Out Partners 1,208.29 Utrecht
“There’s no reason why you can’t
292 — ArchiMed 1,205.29 Lyon
replicate this model with venture fund
293 q 192 ARC Financial Corporation 1,203.17 Calgary
II, III and IV, eventually across different
294 — Five Point Energy 1,200.65 Houston
managers,” says one secondaries source
with close knowledge of the deal. “I 295 p 324 JLL Partners 1,200.00 New York
think it’s their intention to do more 296 q 230 Aurora Capital Partners 1,200.00 Los Angeles
transactions like this. They may not be 297 p 458 Meritech Capital Partners 1,195.00 Palo Alto
as big, but I think there are opportunities 298 q 289 Pearl Energy Investments 1,192.88 Dallas
because other funds are struggling with
299 q 173 FSN Capital 1,186.11 Oslo
the same problem.”
300 q 268 Abris Capital Partners 1,184.74 Warsaw

June 2019 • Private Equity International 41

 Cover story

Key facts
US-based firms Los Angeles San Francisco Irving Houston Atlanta

2 3 1 2 1
occupy eight of
the top 10 spots in
the ranking;
72 percent or
(1) (1) (0) (0) (0)
$1.2 trillion of the
aggregate capital
raised by PEI 300
firms came from
those based in
North America

The golden gate city

Asia-Pacific
firms raised Seventeen firms in the latest PEI 300
approximately $14 are headquartered in San Francisco.
billion more in 2019
Hellman & Friedman (11), Vista Equity Partners
vs 2018’s ranking
(14) and Genstar Capital (27) made it into
the top 50 and gathered among them close to
$60 billion over the last five years. Hellman &
Europe-based firms
Friedman jumped 18 places, propelled by its
raised $37.9 billion ninth flagship fund which amassed $16 billion in
more in 2019 vs October 2018, while Vista Equity slid one spot.
2018’s ranking

Partners Group (21),

which gathered
$14.8 billion over
the last five years, is
Dallas Boca Raton Bethesda New York Providence

0 0 0 13 0
the only firm based
in Zug, Switzerland

Two Toronto-based (1) (1) (1) (17) (1)

firms – Brookfield
Asset Management
(24) and Onex (25)
– made it into this
year’s top 50 with
a combined five-
year fundraising
Where capital calls home
total of $28.3
billion
Ten years ago it seemed that all roads led to New York and London.
But today’s leading firms are spread further afield
New York remains
the fundraising UP on 2009
capital with $329.2 City

billion amassed by X
(x)
Number of HQs in 2019 and (2009)
Big Apple-based
DOWN on 2009
firms in the top 50

42 Private Equity International • June 2019

 Cover story

Chicago Paris Zug Beijing Hong Kong

3(1)
3(2)
1
(0)
1(0)
3 (0)

The northern
capital
This year’s PEI 300 sees 11
firms based in Beijing raise
an aggregate $39.9 billion
over the last five years,
compared with three firms
and $7.8 billion in 2009.

Hillhouse Capital Group (29) is

the biggest climber, jumping 127
places with its remarkable $10.6
billion Fund IV, the largest-ever
fund raised for Asia. Multi-strategy
firm CITICPE (60) and venture
firm IDG Capital (114) are two
other notable Beijing-based firms
that have raised capital for China’s
consumer and new economy –
London Amsterdam Stockholm Athens internet and tech-related companies.

6 0 1 0
China’s new economy has drawn
a significant amount of capital
in recent years. Global investors
poured an estimated $81 billion into
(10) (1) (2) (1) Chinese start-ups in 2018, according
to data from Bain & Co.

The fragrant harbour Cities

unchanged
Hong Kong is home to 13 firms in this year’s PEI 300 which raised $61 billion from 2009
among them in the last five years – an almost four-fold increase from the $16 billion
gathered by eight Hong Kong-headquartered firms in the PEI 300 2009 list. Boston 3
Toronto 2
Baring Private Equity Asia (33), PAG (41) and for its fifth Asia buyout fund in December 2016, and Fort Worth 1
Affinity Equity Asia (44) have landed a spot in the Baring held a $4.5 billion first close mid-last year for
Washington DC 1
top 50, having amassed at least $9 billion each its seventh fund dedicated to the region. A decade
Greenwich 2
over the preceding five years. PAG smashed its ago, none of these firms made it into the top 50 and
Menlo Park 1
$4.5 billion target for its third Asian fund last year, the top three Hong Kong-based firms had just about
gathering $6 billion. Affinity also hauled in $6 billion raised $9 billion between them.

June 2019 • Private Equity International 43

 Cover story

0 10 20 30 40 50 60 70 80 90 100 $bn
1

$965.7bn Five-year fundraising total

of PEI 300’s Top 50

50

$314.5bn Five-year fundraising total

of firms 51-100

100

$65.3bn
Collective fundraising efforts of
33 new firms in the ranking

150

By the numbers
How the PEI 300 firms stack up against each other
200

$16.6bn
Average capital raised each year by Blackstone in the five years to
March 2019 – the aggregate capital raised for the same period
by the bottom 13 firms
250

>$1.2bn Capital needed to get

into the ranking

300
0 10 20 30 40 50 60 70 80 90 100 $bn

Source: PEI

44 Private Equity International • June 2019

 Cover story

Biggest funds — and the LPs in them

The five largest funds raised over the last five years gathered a combined $95.3bn.
Here are the LPs that made hefty commitments to more than one of them

2019
Fund name Fund manager Capital raised ($bn) Year close
Rank

9 Apollo Investment Fund IX Apollo Global Management 24.7 2017

2 Carlyle Partners VII The Carlyle Group 18.5 2018

4 CVC Capital Partners VII CVC Capital Partners 18.1 2017

1 Blackstone Capital Partners VII Blackstone 18.0 2015

11 Hellman & Friedman Capital Partners IX Hellman & Friedman 16.0 2018

Apollo Carlyle CVC Capital Blackstone Hellman &

Investment Partners VII Partners VII Capital Friedman Capital
LP Fund IX Partners VII Partners IX

California Public
Employees’
Retirement System
$500m $600m $560m $500m $650m
Washington
State Board of
Investment
– $600m – $500m $750m
Massachusetts
Pension Reserves
Investment – – $250m $250m $300m
Management Board

New York State

Common
Retirement Fund
$480m – $390m $500m $325m
Oregon State
Treasury $480m – $250m $500m $350m
Virginia Retirement
System $270m – $224m – $350m

– – – $450m $300m
Teacher Retirement
System of Texas

New York State

Teachers’ Retirement
System (NYSTRS)
– – $390m – $300m
Florida State Board
of Administration – $100m – – $250m
Michigan
Department of
Treasury
– $250m – $300m –
Source: PEI

June 2019 • Private Equity International 45