A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money (leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. The use of debt, which normally has a lower cost of capital than equity, serves to reduce the overall cost of financing the acquisition. The cost of debt is lower because interest payments often reduce corporate income tax liability, whereas dividend payments normally do not. This reduced cost of financing allows greater gains to accrue to the equity, and, as a result, the debt serves as a lever to increase the returns to the equity.
The Carlyle Group is a multinational private equity, alternative asset management and financial services corporation based in the United States with $376 billion of assets under management. It specializes in private equity, real assets, and private credit. It is one of the largest mega-funds in the world. In 2015, Carlyle was the world's largest private equity firm by capital raised over the previous five years, according to the PEI 300 index. In the 2023 ranking however, it had slipped to fifth place.
In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships, which invest in and restructure private companies. A private-equity fund is both a type of ownership of assets and is a class of assets, which function as modes of financial management for operating private companies that are not publicly traded in a stock exchange.
KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strategic partners, hedge funds. As of December 31, 2022, the firm had completed more than 690 private equity investments in portfolio companies with approximately $700 billion of total enterprise value. As of December 31, 2022, assets under management (AUM) and fee paying assets under management (FPAUM) were $504 billion and $412 billion, respectively.
Blackstone Inc. is an American alternative investment management company based in New York City. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate business has actively acquired commercial real estate. Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth equity. As of Q1 2023, the company's total assets under management were approximately US$991 billion, making it the largest alternative investment firm globally.
Cinven is a global private equity firm founded in 1977, with offices in nine international locations in Guernsey, London, New York, Paris, Frankfurt, Milan, Luxembourg, Madrid, and Hong Kong that acquires Europe and United States based corporations, and emerging market firms that fit with their core businesses, and necessitate a minimum equity investment of €100 million or more. In 2015, it had €10.6 billion in assets under management.
Permira is a British global investment firm specialised in buyout, growth equity and credit funds. Founded in 1985 as part of Schroders, it became independent in 1996. Operating as Permira since 2001, the company became one of the largest buyout specialists. As of today, Permira advises funds with total committed capital of €77 billion, which have invested in more than 300 companies worldwide. The company employs over 470 people in 15 offices across Europe, North America and Asia.
CVC Capital Partners is a Luxembourg-based private equity and investment advisory firm with approximately US$133 billion of assets under management and approximately €157 billion in secured commitments since inception across American, European and Asian private equity, secondaries and credit funds. As of 31 December 2021, the funds managed or advised by CVC are invested in more than 100 companies worldwide, employing over 450,000 people in numerous countries. CVC was founded in 1981 and, as of 31 March 2022, has over 650 employees working across its network of 25 offices throughout EMEA, Asia and the Americas.
Goldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally. The group, which is based in New York City, was founded in 1986.
Silver Lake is an American global private equity firm focused on investments in technology, technology-enabled and related industries. Founded in 1999, the firm is one of the largest technology investors in the world. Its investment holdings have included Airbnb, Alibaba Group, Ancestry.com, Broadcom, Credit Karma, City Football Group, Dell Technologies, Endeavor, Expedia Group, Fanatics, First Advantage, Flixbus, Global Blue, GoDaddy, Jio, Lightbox, Grupo BC de Asesoría Hipotecaria S.L., Motorola Solutions, New Zealand Rugby, NortonLifeLock, Qualtrics, Red Ventures, Sabre Corporation, Skype, SoFi, GLG, Seagate Technology, SolarWinds, TEG, Twitter, Unity Technologies, Waymo, Weld North Education, WP Engine, Vacasa, the A-League football competition in Australia, and ZPG. Silver Lake is headquartered in Silicon Valley, and has offices in New York, London and Hong Kong.
AlpInvest Partners is a Dutch global private equity asset manager with over $85 billion of committed capital since inception as of December 31, 2022. The firm invests on behalf of more than 450 institutional investors from North America, Asia, Europe, South America and Africa.
BC Partners is a British international investment firm with over $40 billion of assets under management across private equity, credit and real estate in Europe and North America. Its global headquarters are in London. The firm invests across all industries. BC Partners was founded in 1986 and has offices in New York, Paris and Hamburg. Since inception, BC Partners has completed 113 private equity investments in companies with a total enterprise value of €145 billion.
The history of private equity and venture capital and the development of these asset classes has occurred through a series of boom-and-bust cycles since the middle of the 20th century. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel, although interrelated tracks.
Kohlberg & Company is an American private equity firm that focuses on leveraged buyout transactions. Founded by investor Jerome Kohlberg, Jr., the firm invests in a variety of transactions including leveraged carveout, take-private transactions, and acquisitions of privately held companies.
Thoma Bravo, LP, is an American private equity and growth capital firm with offices in San Francisco, Chicago and Miami. It is known for being particularly active in acquiring software companies and has over $120 billion in assets under management. It is the successor to the firm Golder Thoma & Co., which was established in 1980 by Stanley Golder and Carl Thoma. Thoma Bravo is led by managing partners Seth Boro, Orlando Bravo, Scott Crabill, Lee Mitchell, Holden Spaht and Carl Thoma.
Private equity in the 1980s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel although interrelated tracks.
Private equity in the 2000s represents one of the major growth periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital expanded along parallel and interrelated tracks.
James W. Breyer is an American venture capitalist, founder and chief executive officer of Breyer Capital, an investment and venture philanthropy firm, and a former managing partner at Accel Partners, a venture capital firm. Breyer has invested in over 40 companies that have gone public or completed a merger, with some of these investments, including Facebook, earning over 100 times cost and many others over 25 times cost. On the Forbes 2021 list of the 400 richest Americans, he was ranked #389, with a net worth of US$2.9 billion.
Hg is a private equity firm targeting technology buyouts primarily in Europe and the US. Hg focuses on investments in technology and services sectors. It invests out of its 8th £2.5 billion core fund and its 2nd £575 million Mercury fund, targeting smaller technology buyouts, both raised in February 2017. Both funds were closed on their hard-caps and were more than 3x oversubscribed versus their targets, receiving strong re-ups from existing investors. The company raised its 1st time £1.5B Saturn large-cap fund in March 2018 and in 2020 raised $11B across three funds, Mercury 3, Genesis 9 and Saturn 2.
