Investor types

Private equity firms

A private equity firm is the manager, or general partner, that raises closed-end funds from investors and uses them to take control or significant minority stakes in private companies. This page sets out how such firms are organised, how much capital they hold and how they invest.

What a private equity firm is

A private equity firm is the management company, usually acting as general partner (GP), that raises closed-end funds from limited partners (LPs), takes control or significant minority stakes in private companies and is paid through management fees and carried interest. The firm is distinct from the funds it manages. Each fund is a separate legal pool of LP capital with its own term and investors; the vehicle itself is described on the page on private equity funds.

Private equity firms differ from venture capital firms, which take minority stakes in early-stage companies with little or no leverage, and from traditional asset managers, which mainly run portfolios of listed securities. They also differ from industrial and strategic acquirers, which buy businesses for operational reasons with balance sheet capital and have no fund life or exit horizon.

Scale: global and by region

Bain & Company put global buyout dry powder, the capital committed to buyout funds but not yet invested, at US$1.3 trillion in its Global Private Equity Report 2026, published on 23 February 2026.¹ Buyout fundraising fell 16% to US$395 billion in 2025.¹ McKinsey reported that global private equity deal value rose 19% to US$2.6 trillion in 2025.²

In Europe, more than 1,750 private equity and venture capital firms contribute to Invest Europe's annual activity survey.³ Invest Europe gives assets under management for European private equity and venture capital of €1.247 trillion.⁴ European funds raised €147 billion in 2025, up 16% and second only to the 2022 record, and invested €135 billion, up 3%.⁴

Structures and sub-types

Private equity firms specialise by strategy. The main categories are buyout, growth, venture, infrastructure, secondaries and private credit managers, and many of the largest firms run several of these strategies side by side. Most firms are privately owned partnerships or limited liability partnerships. A smaller number are listed companies: Blackstone is listed on the New York Stock Exchange, CVC Capital Partners on Euronext Amsterdam and Partners Group on SIX Swiss Exchange.

Within buyout, firms are also divided by the size of company they buy, from the lower mid-market to large-cap transactions. The mid-market remains a substantial segment in Europe: it took 34% of the European buyout amount invested in 2025.⁴

Source of capital and investment horizon

A private equity firm invests capital that LPs have committed to its funds, alongside the firm's own commitment. The investor base is international. North American investors supplied almost 30% of European buyout fundraising in 2025.⁴

Closed-end funds conventionally run for about ten years, with capital invested in the early years and returned as companies are sold. In practice horizons have lengthened. McKinsey put the average holding period at 6.6 years in 2025 and estimated that more than 16,000 companies had been held for four years or longer, 52% of buyout-backed portfolio companies and the highest share on record.² Bain's midyear report of 8 June 2026 found holding periods running to about seven years, with around 33,000 unsold portfolio companies held by private equity firms worldwide.⁵

How private equity firms invest

The core transaction is the buyout: the purchase of a controlling stake financed with fund equity and acquisition debt. Firms also buy further companies to add to an existing platform, acquire divisions carved out of larger groups and take minority growth stakes in profitable, expanding companies. European buyout investment was €90 billion in 2025, roughly flat on 2024 and 16% above the five-year average.⁴

Large transactions are rarely funded by a single fund. Bain found in its 2026 report that the bulk of equity in many transactions came from external sources, especially sovereign wealth funds, with corporate buyers also contributing equity.¹

Exits take three main forms: sale to another private equity firm, sale to a trade buyer and listing. According to Invest Europe's Activity Report 2025, sale to another private equity firm was the most common European exit route in 2025, at 42% to 44% depending on the measure, followed by trade sale at 22%.⁶ GP-led secondaries, in which a firm moves companies into a continuation vehicle, represented approximately 14% of all sponsor-backed exit volume in 2025.⁷ McKinsey also identified net asset value (NAV) lending, borrowing secured on a fund's portfolio, as an enduring part of the market alongside secondaries and continuation vehicles.²

Typical deal sizes

Deal size depends on the size of the fund and the strategy. Average size has risen sharply. McKinsey calculated an average deal size of just above US$910 million for buyouts in 2025, against just over US$610 million in 2024.² Buyout and growth deals larger than US$500 million increased 44% in value to US$1.1 trillion in 2025.² In Europe the mid-market accounted for 34% of the buyout amount invested in 2025.⁴

Prices have risen with size. The median private equity purchase multiple increased from 11.3 times EBITDA in 2024 to 11.8 times in 2025.²

How decisions are made and how long they take

Investment and exit decisions are taken by the firm as manager of its funds, within the terms that LPs agreed when they committed capital. Within the firm, an investment committee of senior partners approves each stage: an initial indication of interest, spending on external due diligence and the final binding offer. Due diligence normally covers the company's financial results, its market, legal and tax position and its operations, much of it carried out by accountants, lawyers and consultants appointed by the firm.

The context for these decisions in 2026 is a slower market. Bain reported in June 2026 a general slowdown in investment and buyout activity, stalled exit activity and fundraising momentum that "remains uninspiring".⁵

What private equity firms look for and why they decline

Bain's 2026 reports frame the market in terms of value creation: the February 2026 report argued that a new era challenges firms to enhance value creation, and the June 2026 midyear report argued that winning firms will focus on what they can control.^1,5 With purchase multiples at a record in 2025,² returns depend more on improvement during ownership. Companies seeking private equity investment therefore meet buyers focused on how earnings will grow during ownership, on the quality and predictability of those earnings and on a credible route to exit. A price that leaves no room for the firm's target return, or earnings that cannot be verified in due diligence, are common reasons for a firm to withdraw.

Regulation and governance

In the European Union, private equity managers fall under the Alternative Investment Fund Managers Directive (AIFMD). Directive (EU) 2024/927, known as AIFMD II, amended it with rules on delegation, liquidity risk management, supervisory reporting, depositary services and loan origination by funds.⁸ The UK operates its own equivalent regime, under which managers are authorised by the Financial Conduct Authority. In Switzerland, anyone who manages collective investment schemes on a commercial basis must be authorised by FINMA under the Financial Institutions Act (FinIA).⁹ In the United States, managers register with the Securities and Exchange Commission under the Investment Advisers Act.

Listed firms such as Blackstone, KKR and Partners Group are also subject to the disclosure rules of their stock exchanges, which is why their assets under management are published each quarter or half year. Governance within each fund is set by the limited partnership agreement agreed with LPs.

Trends in 2025 and 2026

Exits recovered in 2025. Bain reported that global buyout-backed exit value rose 47% to US$717 billion, although the number of exits fell 2% to 1,570.¹ On McKinsey's wider measure of all private equity-backed exits, exit value rose 41% to US$1.3 trillion, helped by IPOs that nearly doubled in value to over US$320 billion, while the total exit count declined 15%.² Sponsor-to-strategic exits, meaning sales to corporate buyers, regained importance.¹

The industry is also consolidating. According to McKinsey, announced strategic M&A among the 100 largest GPs close to doubled, from nearly US$18 billion in 2024 to more than US$34 billion in 2025.²

The first half of 2026 was weaker. Bain's midyear report of 8 June 2026 described three shocks arriving in quick succession: an AI-driven selloff in software valuations, redemption stress in private credit and an energy price spike linked to the Iran conflict.⁵ Investment slowed, exit activity remained stalled and fundraising remained "mired in the doldrums", although Bain noted that debt markets were open.⁵

Notable examples

Firm	Headquarters	Size and date
Blackstone	New York	US$1,346.3 billion total assets under management at 30 June 2026;¹⁰ nearly US$1.4 trillion at 30 September 2026¹¹
KKR	New York	US$796,487 million assets under management at 30 June 2026¹²
EQT	Stockholm	€291 billion total assets under management at 30 June 2026¹³
CVC Capital Partners	Jersey (registered office)	Approximately €239 billion assets under management at 30 September 2026¹⁴
Partners Group	Baar-Zug, Switzerland	US$186 billion assets under management at 30 June 2026¹⁵
StepStone Group	New York	US$245.4 billion assets under management at 30 June 2026, according to StepStone, 6 August 2026¹⁶
Macquarie	Sydney	Sold Aligned Data Centers for US$40 billion in 2025¹

Figures are total assets under management as each firm reports them, across all strategies. The table is not a ranking and implies no recommendation.

How advisers and placement agents work with private equity firms

Private equity firms use three main kinds of external adviser. Placement agents help raise new funds from LPs, introducing the firm to pension funds, insurers, sovereign wealth funds, family offices and funds of funds. Sell-side M&A advisers run sale processes for portfolio companies, approaching both strategic buyers and other financial sponsors. Secondary advisers structure GP-led transactions such as continuation vehicles and run sales of LP fund interests; Jefferies, one such adviser, publishes a widely cited annual review of the secondary market.⁷

Anglo-Suisse Capital advises on capital raising, M&A and secondary transactions with professional investors.

Frequently asked questions

What is the difference between a private equity firm and a private equity fund?

The firm is the manager, or general partner, that raises and runs funds and employs the investment team. The fund is the legal vehicle, usually a limited partnership, that holds investors' committed capital and owns the portfolio companies. See private equity funds.

How much capital do buyout firms have available to invest?

Bain & Company estimated global buyout dry powder at US$1.3 trillion in its Global Private Equity Report 2026, published on 23 February 2026.¹

Do private equity firms fund large deals alone?

Often not. Bain found that in 2025 the bulk of equity in many transactions came from external sources, especially sovereign wealth funds, with corporate buyers also contributing.¹

Who do private equity firms sell companies to?

In Europe in 2025 the most common exit route was sale to another private equity firm, at 42% to 44% depending on the measure, followed by trade sale at 22%, according to Invest Europe.⁶

How long do private equity firms hold companies?

McKinsey put the average holding period at 6.6 years in 2025.² Bain's midyear report of 8 June 2026 found holding periods running to about seven years, with around 33,000 unsold portfolio companies worldwide.⁵

Was the private equity market active in 2026?

Less so than in 2025. Bain reported a slowdown in investment, stalled exits and weak fundraising in the first half of 2026 after three shocks, although debt markets remained open.⁵

Working with Anglo-Suisse Capital

Anglo-Suisse Capital advises companies, fund managers and shareholders on capital raising, M&A and secondary transactions with professional investors in the UK, Switzerland and internationally.

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Sources

This page is general information for professional investors and is not investment advice. Figures are taken from the sources listed, as at the dates stated.