Audax, HarbourVest and Genstar ranked as the top three most active private equity firms in 2019, based on the volume of completed deals in the U.S., according to PitchBook. Three companies tied for fourth place: Abry, Carlyle and Shore Capital.
Where were these PE firms looking for deals? Eight of the firms on our list name the software and technology sector among their top investment targets, and seven put healthcare companies on their priority list. Financial services and consumer services are each named by five of the firms as industries they focus on, with four naming business services companies. Fundraising from investors in 2019 led to two notable fund launches earlier in 2020: KKR’s $1.3 billion KKR Global Impact Fund and HarbourVest’s $2.6 billion HarbourVest Fund XI.
Here are Mergers & Acquisitions’ profiles of the top 10 firms.
Editor’s Note: This story is a collaboration between Mergers & Acquisitions and PitchBook. The profiles are reported and written by Mergers & Acquisitions, and the deal count and ranking data comes from PitchBook. We use the data available at press time. This story was compiled based on the data available on Feb. 14, 2020.
1. Audax Group
Audax Group, founded in 1999, invests in middle-market companies through Audax Private Equity and Audax Private Debt. Audax Private Equity, based in Boston and San Francisco, takes a buy-and-build investment approach, partnering with established companies to create larger entities through acquisitions and organic growth. The firm has invested more than $6 billion in 130 platform investments and 825 add-on acquisitions.
New York-based Audax Private Debt invests through first lien, stretch senior, unitranche, second lien, subordinated debt and equity co-investment solutions, with more than $19 billion invested since 2000. The private equity team has more than 100 investment professionals. Audax Private Equity’s investments are headquartered in the U.S. and Canada, with operations in 21 countries. The companies are in business and consumer services, healthcare, software and technology, chemicals, energy, engineered products and materials industries.
Earlier in 2020, Audax Private Equity acquired a controlling interest in Kofile Inc., a Dallas company that provides records management systems; and Audax Private Equity-backed the Chartis Group acquired the Greeley Co. from Keystone Capital. Greeley is a provider of regulatory compliance and physician and medical staff services.
Audax closed 87 U.S. deals in 2019, according to PitchBook.
2. HarbourVest Partners
HarbourVest Partners is global private markets investment firm with more than $68 billion in assets under management as of yearend 2019, including primary fund investments, secondary investments and direct co-investments.
The firm, founded in 1982, has invested more than $17 billion directly in operating companies mostly in communications, consumer, financial, healthcare, industrial and information technology sectors. It invests in buyout, growth equity and mezzanine stages.
HarbourVest has more than 600 employees, including more than 125 investment professionals. The firm is based in Boston with offices also in Beijing, Bogotá, Dublin, Hong Kong, London, Seoul, Tel Aviv, Tokyo and Toronto. Earlier in 2020 HarbourVest closed its flagship U.S. fund, HarbourVest Fund XI, at $2.6 billion.
The fund invests mostly in primary partnerships in U.S. buyouts, complemented by secondary investments and direct co-investments. Among its deals in 2019, HarbourVest, along with JMI Equity, sold software developer Intelex to Industrial Scientific, a subsidiary of Fortive Corp. (NYSE: FTV). HarbourVest closed 64 U.S. deals in 2019, according to PitchBook.
3. Genstar Capital
Genstar Capital is a San Francisco PE firm that has been investing in middle-market companies since 1988. Genstar partners with its management teams and a network of strategic advisors, including current and former C-level executives from the industries in which it invests. The firm employs more than 35 professionals and manages funds with total capital commitments of $17 billion.
Genstar invests in targeted segments of only four sectors: financial services, software, industrial technology and healthcare, and focuses on global companies headquartered in North America. It is currently managing its ninth fund and is seeking investment opportunities in founder-owned companies, public company orphans, corporate carve-outs and traditional buyouts.
Among its recent deals, Genstar-backed Enverus, an energy data analytics company, acquired RS Energy Group, an oil-and-gas-focused technology firm; Genstar sold plastic container maker Pretium Packaging to Clearlake Capital Group; and Genstar sold ECM Industries, provider of electrical products, to Sentinel Capital Partners. Genstar closed 58 U.S. deals in 2019, according to PitchBook.
4. Abry Partners
Abry Partners, a PE firm headquartered in Boston, focuses on investments in media, communications, insurance, business and information services, with industry expertise in broadband, business services,communications, cybersecurity, healthcare information technology, information services, insurance services, Internet of Things, logistics, media and Software-as-a-Service.
Since its founding in 1989, Abry has completed more than 550 transactions. The firm has $12.8 billion under active management in four fund strategies. Its flagship private equity fund is the $2.1 billion Abry Partners IX, targeting investments of $20 million to $200 million. The $525 million Abry Heritage Partners fund focuses on lower middle-market companies with investments of $20 million to $50 million. Its $1.05 billion structured equity investment fund, Abry Senior Equity V, targets investments of $20 million to $75 million, and its $1.5 billion senior debt securities fund, Abry Advanced Securities Fund IV, focuses on first and second lien bank debt securities raised to support leveraged buyouts. Abry closed 45 U.S. deals in 2019, the same number as Carlyle and Shore Capital, according to PitchBook. In 2019, Abry sold AddSecure to Castik Capital.
4. The Carlyle Group
The Carlyle Group (Nasdaq: CG) is a global investment firm with $224 billion under management. The firm’s corporate PE business, with 272 investment professionals in 22 offices, is invested in 181 portfolio companies through 35 buyout and growth capital funds.
The buyout teams invest through funds with $79 billion under management that focus on the U.S. and other geographic areas globally, as well as technology and financial services.
The growth teams invest through funds with $7 billion under management focused on middle-market and growth companies in the U.S., Asia and Europe.
Since 1990, the corporate PE unit has invested $106 billion in equity in 650 transactions and generated more than $85 billion in gains. Among its recent deals, Carlyle sold its majority stake in Golden Goose sneakers to a company backed by Permira funds and a company controlled by Carlyle and Stellex Capital Management, Titan Acquisition Holdings, acquired Huntington Ingalls’ San Diego Shipyard. Carlyle closed 45 U.S. deals in 2019, the same number as Abry and Shore Capital, according to PitchBook. Earlier in 2020, Carlyle said it will invest $100 million to partner with Alchemy Renewable Energy. The two compnanies wil acquire, finance, develop and operate solar power generation projects in the U.S
4. Shore Capital Partners
Chicago-based PE firm Shore Capital Partners has about $1 billion under management. The firm invests through two microcap focused funds: Shore Capital Healthcare Partners, which invests in healthcare companies, and Shore Capital Food Beverage Partners, which invests in food, beverage and related companies. Shore raised Healthcare Partners, its third healthcare fund, at $293 million and Food Beverage Partners, its first food and beverage fund, at $148 million, both in 2019.
The healthcare fund invests in platform companies with $5 million to $100 million in annual revenue and add-on companies with more than $1 million in annual revenue. The food and beverage fund targets companies with $10 million to $100 million in annual revenue.
Among its deals in 2019, Shore Capital invested in Main Street Gourmet, a wholesale bakery, and it made a platform investment by forming Southern Ear, Nose, Throat and Allergy Partners and partnering with Northwest ENT and Allergy Center in Georgia. Shore Capital closed 45 U.S. deals in 2019, the same number as Abry and Carlyle, according to PitchBook.
7. Kohlberg Kravis Roberts
KKR & Co. (NYSE: KKR) manages private equity, energy, infrastructure, real estate and credit investments, plus it has partners that manage hedge funds and it provides financing and investments through a capital markets business.
KKR was founded in 1976, and through Sept. 30, 2019, the firm had $208.4 billion under management, 109 portfolio companies with $157 billion in annual revenues, and 21 private equity funds raised since inception. Those funds have completed PE transactions with about $615 billion of total enterprise value.
KKR’s PE business invests in management buyouts and build-ups, minority positions, public company toe-hold investments and growth capital opportunities. Its Americas PE teams focus on industrials, financial services, retail and consumer, energy, technology, media and communications, healthcare, and hospitality and leisure industries.
Earlier in 2020, KKR raised the $1.3 billion KKR Global Impact Fund to make PE investments in lower middle-market companies that provide commercial solutions to environmental and social challenges. KKR closed 42 U.S. deals in 2019, according to PitchBook.
8. Insight Partners
Insight Venture Partners is a New York-based global venture capital and private equity firm with more than $20 billion under management. The firm invests in high-growth technology and software companies.
Since Insight was founded in 1995, it has invested in more than 300 companies, completed more than 200 M&A transactions for its portfolio companies and made more than 200 strategic exits, with more than 40 initial public offerings. The firm advises its portfolio companies through its Insight Onsite program, providing advice targeted at product and technology, marketing, sales, strategy and M&A, talent, business development and customer success functions.
Among recent deals, Insight Venture invested in Lakeside Software, developer of workplace data analytics software, and it invested $500 million in cloud data management company Veeam Software, with Canada Pension Plan Investment Board investing alongside the PE firm. Insight closed 41 U.S. deals in 2019, the same number as Summit, according to PitchBook.
9. Summit Partners
Boston-based Summit Partners is a global alternative investment firm focused on growth equity, fixed income and public equity opportunities. With more than $19 billion under management, the firm has invested in more than 500 companies in technology, healthcare, consumer, financial and business services and other growth industries.
Since its start in 1984, Summit Partners has completed more than 190 strategic sales and mergers and more than 140 public offerings. The firm maintains offices in North America and Europe, and invests in companies around the world.
In 2019, Summit invested in $2.5 billion in 50 companies, made more than 70 acquisitions through its portfolio companies and made 19 strategic sales and public offerings. Among its recent deals, Summit has invested in Akeneo, a Software-as-a-Service provider to brands and retailers; EClinical Solutions, provider of data services to life sciences organizations; and gamified cybersecurity trainer Immersive Labs; Summit closed 41 U.S. deals in 2019, according to PitchBook.
10. Harvest Partners
Harvest Partners is a middle-market PE firm headquartered in New York that invests through private equity and structured capital arms. The private equity business focuses on investments in the business services and consumer, healthcare, industrial services, and manufacturing and distribution industries. It targets companies with annual revenues of $100 million to $1 billion.
Among its recent deals, Harvest invested in Integrity Marketing Group, distributor of life and health insurance for seniors; bought outsourced railroad yard manager Lazer Spot Inc.; invested in MRI Software, provider of real estate management software; and bought Service Express, provider of maintenance and hardware support for data centers. Harvest closed 38 U.S. deals in 2019, according to PitchBook.