The Players

One of the reasons private equity has gotten so much attention is the increasing frequency with which large publicly traded companies are going private in leveraged buyouts. According to The Wall Street Journal, eight of the 10 largest buyouts ever in the United States were announced in the last 12 months.

A handful of large buyout firms were involved in nearly all these headline grabbing deals. Of the hundreds of buyout firms worldwide, Bain Capital (Bain), Blackstone Group (Blackstone), the Carlyle Group (Carlyle), Kohlberg Kravis Roberts & Co. (KKR), and TPG (formerly Texas Pacific Group) have emerged as the five largest buyout firms in this growing industry.

The funds they are raising for their acquisitions are huge. In 2007, KKR and Blackstone each announced they are building $20 billion funds. TPG has raised, and Carlyle is currently raising, $15 billion funds. Bain has a $10 billion fund. In total, these five firms will soon have $80 billion in funds, which could conservatively translate to more than $1 billion in fund management alone.

The large portfolios of the biggest buyout players illustrate their reach into and influence over the economy. According to Carlyle’s Web site, companies owned by Carlyle employ more than 200,000 people worldwide while The Wall Street Journal reports that there are more than 500,000 employees at KKR-controlled firms. If viewed as corporate conglomerates, these employment figures put the biggest buyout firms in the same league as Verizon and FedEx in the case of Carlyle, and McDonalds in the case of KKR. Overall, the five largest buyout firms control companies that employ more than 2 million workers.