1. The Blackstone Group
CEO Steve A. Schwarzman
Recent buyout fundraising: billion
Description: Since opening its doors with 0,000 in 1985, Blackstone has become known for sharp elbows and sharper deals. Witness its .8 billion buyout of Celanese in 2004: The firm put in 0 million in equity and almost immediately recouped 0 million with a junkbond offering. Or the way it unloaded billion worth of buildings in its recent .9 billion buyout of Equity Office Partners before the ink was dry on the deal. As a hedge against a cyclical downturn in private equity, co-founder and CEO Steve A. Schwarzman has diversified the firm into hedge funds, distressed debt, asset management, and oh, yes, real estate. Moreover, the 60-year-old designated CSFB alum Hamilton "Tony" James president and his de facto successor in 2004.
Boldface advisors: Former Treasury Secretary Paul O'Neill.
Fun Fact: Co-founder Pete Peterson counts Alan Greenspan and Henry Kravis as golf buddies.
Description: Known primarily as a pure private equity firm, KKR has bounced back from some of its 1990s missteps (Regal Cinemas, anyone?) and reduced its dependence on first cousins Henry Kravis and George Roberts, who founded the firm with their Bear Stearns mentor, Jerome Kohlberg, in 1976. The heart of the operation is an investment committee that meets every Monday. KKR dealmakers are divided into 11 industry groups, which focus on 100-day plans; there is also an internal consulting group called Capstone. The firm remains hot, thanks to an annual rate of return of roughly 27 percent and considerable dealmaking muscle.
Boldface advisors: The former group chairman of HSBC Holdings, Sir John Bond, is expected to help with deals in Asia. Ed Artzt, formerly of Procter & Gamble, George Fisher from Motorola, and General Jack Keane, former Army vice chief of staff, review the portfolio companies.
Fun fact: When the Menlo Park, Calif., office gets together for lunch, George Roberts likes to grill people with brainteasers.
Recent buyout fundraising: .3 billion
Description: Characterized by a rival as the "Fidelity of private equity," Carlyle manages almost billion in 48 funds across four disciplines: buyouts, venture and growth, real estate, and leveraged finance (it's also developing a multistrategy hedge fund). Founded in 1987 by William Conway Jr., Dan D'Aniello, and David Rubenstein, among others (and named after the New York City hotel), the firm has caught heat in the past for managing money from the bin Laden family and reportedly profiting from defense-related deals (which have never accounted for more than 1 percent of its total).
Lately the massive 750-person firm has been known for its global reach, with 27 offices from New York City to Mumbai to Tokyo, plus portfolio companies employing more than 200,000 people and generating billion in revenues. While calling its dealmaking style conservative, Carlyle, based in Washington, D.C., still boasts an average annual return of 34 percent. In 2001, Calpers bought a 5.5 percent stake in the firm.
Boldface advisors: Carlyle has swapped politicos like George H.W. Bush for business leaders, including its chairman, Louis Gerstner Jr., the former IBM chairman and CEO.
Fun fact: Rubenstein and his wife met while working in the Carter administration.
Recent buyout fundraising: .2 billion
Description: TPG's first major deal remains one of its signatures - the nervy turnaround of Continental Airlines. In 1993, TPG purchased the twice-bankrupt company and later sold its stake for ten times its original investment. The private-equity firm stepped into the airline industry again with its .7 billion buyout of Qantas last year. That helped TPG set a record for participating in the biggest dollar amount of deals ever done in a single year - 1 billion. Co-founder David Bonderman works out of Fort Worth, and fellow co-founder Jim Coulter is based in San Francisco. TPG is picking up steam in Asia, where it operates seven offices.
Boldface advisors: Former Air France chairman Bernard Attali and Leonard Schaeffer, the former CEO of WellPoint Health Networks.
Fun fact: Bonderman does not do e-mail. Instead, his secretaries fax him the messages, and he dictates his responses.
Recent buyout fundraising: billion
Description: Spun off from the consulting firm Bain & Co. in 1984, these Boston-based dealmakers fancy themselves the intellectuals of the private-equity world, and their investors are drawn more from university endowments than from pension funds. CEO-less since Mitt Romney left in 1999 to run for governor, Bain's 26 partners work as equals, although there are standouts, like Steve Pagliuca (Bain's top partner on the HCA megadeal), Joshua Bekenstein (on the board at Yale's business school), and Mark Nunnelly (a key brain behind the Domino's turnaround).
However, this collective intelligence doesn't come cheap: Bain charges a 30 percent fee to its limited partners, vs. the standard 20 percent rate. And despite a hot 2006, in which it took Outback Steakhouse private for .2 billion, it is still smarting from accusations that a 1 million dividend it earned in 2002 for buying out KB Toys sent the company into Chapter 11 two years later. It has also been popping up in club deals, for which they've created a special co-investment fund with a 20 percent rate.
Boldface advisors: Jonathan Zhu, the former CEO of Morgan Stanley China, recently joined to help spend Bain's new billion Asia fund.
Fun fact: Pagliuca is now part owner of the Boston Celtics.
Description: Since opening its doors with 0,000 in 1985, Blackstone has become known for sharp elbows and sharper deals. Witness its .8 billion buyout of Celanese in 2004: The firm put in 0 million in equity and almost immediately recouped 0 million with a junkbond offering. Or the way it unloaded billion worth of buildings in its recent .9 billion buyout of Equity Office Partners before the ink was dry on the deal. As a hedge against a cyclical downturn in private equity, co-founder and CEO Steve A. Schwarzman has diversified the firm into hedge funds, distressed debt, asset management, and oh, yes, real estate. Moreover, the 60-year-old designated CSFB alum Hamilton "Tony" James president and his de facto successor in 2004.
Boldface advisors: Former Treasury Secretary Paul O'Neill.
Fun Fact: Co-founder Pete Peterson counts Alan Greenspan and Henry Kravis as golf buddies.
2. Kohlberg Kravis Roberts & Co.
KKR co-founder Henry Kravis
Recent buyout fundraising: .6 billion
Recent buyout fundraising: .6 billion
Description: Known primarily as a pure private equity firm, KKR has bounced back from some of its 1990s missteps (Regal Cinemas, anyone?) and reduced its dependence on first cousins Henry Kravis and George Roberts, who founded the firm with their Bear Stearns mentor, Jerome Kohlberg, in 1976. The heart of the operation is an investment committee that meets every Monday. KKR dealmakers are divided into 11 industry groups, which focus on 100-day plans; there is also an internal consulting group called Capstone. The firm remains hot, thanks to an annual rate of return of roughly 27 percent and considerable dealmaking muscle.
Boldface advisors: The former group chairman of HSBC Holdings, Sir John Bond, is expected to help with deals in Asia. Ed Artzt, formerly of Procter & Gamble, George Fisher from Motorola, and General Jack Keane, former Army vice chief of staff, review the portfolio companies.
Fun fact: When the Menlo Park, Calif., office gets together for lunch, George Roberts likes to grill people with brainteasers.
3. The Carlyle Group
Two of Carlyle's founders, Dan D'Aniello and David Rubenstein
Recent buyout fundraising: .3 billion
Description: Characterized by a rival as the "Fidelity of private equity," Carlyle manages almost billion in 48 funds across four disciplines: buyouts, venture and growth, real estate, and leveraged finance (it's also developing a multistrategy hedge fund). Founded in 1987 by William Conway Jr., Dan D'Aniello, and David Rubenstein, among others (and named after the New York City hotel), the firm has caught heat in the past for managing money from the bin Laden family and reportedly profiting from defense-related deals (which have never accounted for more than 1 percent of its total).
Lately the massive 750-person firm has been known for its global reach, with 27 offices from New York City to Mumbai to Tokyo, plus portfolio companies employing more than 200,000 people and generating billion in revenues. While calling its dealmaking style conservative, Carlyle, based in Washington, D.C., still boasts an average annual return of 34 percent. In 2001, Calpers bought a 5.5 percent stake in the firm.
Boldface advisors: Carlyle has swapped politicos like George H.W. Bush for business leaders, including its chairman, Louis Gerstner Jr., the former IBM chairman and CEO.
Fun fact: Rubenstein and his wife met while working in the Carter administration.
4. Texas Pacific Group
Texas Pacific co-founder David Bonderman
Recent buyout fundraising: .2 billion
Description: TPG's first major deal remains one of its signatures - the nervy turnaround of Continental Airlines. In 1993, TPG purchased the twice-bankrupt company and later sold its stake for ten times its original investment. The private-equity firm stepped into the airline industry again with its .7 billion buyout of Qantas last year. That helped TPG set a record for participating in the biggest dollar amount of deals ever done in a single year - 1 billion. Co-founder David Bonderman works out of Fort Worth, and fellow co-founder Jim Coulter is based in San Francisco. TPG is picking up steam in Asia, where it operates seven offices.
Boldface advisors: Former Air France chairman Bernard Attali and Leonard Schaeffer, the former CEO of WellPoint Health Networks.
Fun fact: Bonderman does not do e-mail. Instead, his secretaries fax him the messages, and he dictates his responses.
5. Bain Capital
Steve Pagliuca, one of Bain's standouts
Recent buyout fundraising: billion
Description: Spun off from the consulting firm Bain & Co. in 1984, these Boston-based dealmakers fancy themselves the intellectuals of the private-equity world, and their investors are drawn more from university endowments than from pension funds. CEO-less since Mitt Romney left in 1999 to run for governor, Bain's 26 partners work as equals, although there are standouts, like Steve Pagliuca (Bain's top partner on the HCA megadeal), Joshua Bekenstein (on the board at Yale's business school), and Mark Nunnelly (a key brain behind the Domino's turnaround).
However, this collective intelligence doesn't come cheap: Bain charges a 30 percent fee to its limited partners, vs. the standard 20 percent rate. And despite a hot 2006, in which it took Outback Steakhouse private for .2 billion, it is still smarting from accusations that a 1 million dividend it earned in 2002 for buying out KB Toys sent the company into Chapter 11 two years later. It has also been popping up in club deals, for which they've created a special co-investment fund with a 20 percent rate.
Boldface advisors: Jonathan Zhu, the former CEO of Morgan Stanley China, recently joined to help spend Bain's new billion Asia fund.
Fun fact: Pagliuca is now part owner of the Boston Celtics.
