Private equity firm

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A private equity firm is an investment company that raises money from investors to buy and improve private companies or startups. They usually target privately owned businesses, but sometimes they buy a majority of a public company and take it private. The funds come from institutions, family offices, and other investors, and are invested in strategies like leveraged buyouts (buying with borrowed money), venture capital (investing in startups), and growth capital (helping mature companies grow). The firm acts as the manager (general partner) while the investors are limited partners, and it aims to control or gain a large stake to boost value and sell the company for a profit.

History shows boom-and-bust cycles since the mid-20th century, with big growth since the 1980s. Early private equity helped launch companies such as Microsoft, Dell, and Genentech. There are two main arms: leveraged buyouts and venture capital. The industry grew in Europe after the 1990s regulatory changes, and in 1999 British pension funds were encouraged to invest in private equity.

Concerns about private equity include very large profits from deals and the potential negative impact on workers and prices. In 2024, the Bank of England warned PE-owned firms could be more likely to default and noted they employed over 2 million people in the UK and carried about 15% of corporate debt. Moody’s also found PE-backed companies more likely to default globally. Critics say PE buys can lead to job cuts, higher prices, asset stripping, and less transparency when companies go private, and there have been concerns about nonprofit hospices being affected.

Largest private equity firms (examples commonly ranked by assets under management) include:
- Blackstone Group
- Kohlberg Kravis Roberts (KKR)
- EQT AB
- Thoma Bravo
- The Carlyle Group
- TPG Capital
- Advent International
- Hg
- General Atlantic
- Warburg Pincus
- Silver Lake
- Goldman Sachs Alternatives
- Bain Capital

A 2025 ranking also highlights Blackstone, Apollo, Carlyle, KKR, TPG, Bain, Warburg Pincus, Vista, and General Atlantic as top firms by assets under management. Most large PE firms focus more on leveraged buyouts than on pure venture capital.