PEI 300 List: More Capital for Fewer GPs

Private Equity International recently released their annual ranking of the industry’s largest capital raisers. The rankings “measure the fundraising totals of the biggest Private Equity firms over the past five years”. Despite economic factors and conditions that should hamper fundraising efforts, the big dogs continue to eat. The top 10 is populated by the usual suspects:

Source: Private Equity International

So what can we glean from this report? First, it is to be noted that despite LP allocations being reduced due to economic headwinds, there are three firms that have amassed more than $100B in capital raised. It’s no coincidence that these firms also have the deepest benches when it comes to resources around value creation in the private equity industry. But what about the vast majority of Private Equity firms globally that don’t have the seemingly bottomless barrel of resources at their disposal? They are going to have to figure out their value creation playbook and begin implementing it in a successful and expeditious fashion ahead of their next fundraising round or they open the door for this list to get even more top heavy in the years to come. Experience and differentiation are the two most important criteria for LPs when allocating and if the smaller funds are unable to leverage their size to move swiftly and nimbly towards executing value creation strategies at their portfolio companies, we’re going to see the larger scale firms further inflate their share of available capital year over year.

We’re already seeing a refreshed focus on portfolio operations in the first half of 2023. At first glance, this can simply be attributed to slower deal flow and more PE focus turned inward towards their existing portfolio. But when you take a closer look, you’ll notice that press releases and broadcasting of these efforts and organizational changes to further drive them is aimed directly at LPs. At Treya, we’re excited to be working with more PE firms than ever as they work to bolster and amplify their value creation efforts. If these rankings are any indication, we can expect that momentum to grow in the back half of the year so mid and lower-mid market funds can stay in the game.

By Chris Tasiopoulos, VP of Business Development
Email: chris.t@treyapartners.com
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