GrowthCap has released its second annual Top 25 Growth Equity Firms ranking. The list highlights the top private capital investors focused on the growth equity segment and was based on a combination of fund performance, consistency of returns, capital raised, investment strategy and partner experience. Returns data were collected through direct confirmation from funds as well as third-party independent research and focused on funds raised within the last 10 years. See the full rankings below:
1INSTITUTIONAL VENTURE PARTNERS
Average Net IRR: 25% – 30%*
Institutional Venture Partners (IVP) is a US-based private equity investment firm focusing on later-stage venture capital and growth equity investments. IVP has a strong portfolio of both enterprise and consumer technology companies. Within the consumer space some of the most notable companies they’ve invested in include Twitter, Snapchat, Zynga, HomeAway, and SuperCell. Within the enterprise space representative investments include Dropbox, Pure Storage, AppDynamics, Slack and Zenefits. As a firm they’ve had over 101 IPOs with five IPOs alone in 2014. IVP’s most recent fund, IVP XV, is a $1.4 billion later-stage growth equity and venture capital fund, and the firm was founded by Reid W. Dennis in 1980. See interview with IVP General Partner Jules Maltz.
2NEWSPRING GROWTH CAPITAL
Average Net IRR: N/A**
NewSpring Capital is a family of growth-oriented funds headquartered in Radnor, Pennsylvania. NewSpring’s growth capital strategy focuses on high growth companies across the business services, enabling technology and information technology sectors. They consider investments for growth, recapitalizations and mergers & acquisitions. NewSpring closed on its most recent $250 million growth fund in 2013 and has approximately $950 million of combined assets under management.
3CATALYST INVESTORS
Average Net IRR: 20% – 25%
Catalyst Investors started their first fund in 2000 with many of their partners having previously worked at Toronto Dominion (TD). Catalyst was an early pioneer in the growth equity space in that their style of investing has, by and large, remained constant even though growth equity as an asset class was only recently defined. Catalyst is now investing out of its fourth fund which closed in 2015 and focuses on minority as well as majority growth-oriented opportunities in business and consumer services (digital media, eCommerce, healthcare IT, and education technology), cloud computing (SaaS and business intelligence), and communications infrastructure (wireless towers, wireless spectrum, and data centers).
4CANAAN EQUITY
Average Net IRR: 20% – 25%
Canaan was founded in 1987 and provides capital for growth across all industry sections including information technology, healthcare and medical. As of 2012, Canaan has raised 10 funds to date, completed more than 160 exits, and manages approximately $4.2 billion in capital.
5CADUCEUS PRIVATE INVESTMENTS
Average Net IRR: 25% – 30%
Led by OrbiMed Advisors, an investment management firm focused on the healthcare sector, Caduceus Private Investment funds invest primarily in US mid and late stage private life science companies and medical technologies. The fund also invests opportunistically in public small cap companies. OrbiMed has over $6 billion in assets under management and is now investing out of its most recent fund Caduceus Private Investments IV.
6LIME ROCK PARTNERS
Average Net IRR: 20% – 25%
Lime Rock Partners provides growth capital for the energy industry. Founded in 1988, their goal is to help build high-growth E&P and oilfield service companies worldwide employing an active approach to increase operational growth. The firm’s partners have decades of experience having managed over $5.5 billion in total private capital commitments including nearly $4.0 billion made to six Lime Rock Partners funds.
7GREYCROFT PARTNERS
Average Net IRR: 20% – 25%
Greycroft was founded by industry veteran Alan Patricof who also helped create Patricof & Co. Ventures Inc., a predecessor to Apax Partners, which is one of the world’s leading private equity firms today with $41 billion under management. Greycroft’s current $200 million growth-stage fund invests up to $20 million across consumer Internet, eCommerce, enterprise software, cloud computing, financial technology, and advertising technology.
8INSIGHT VENTURE PARTNERS
Average Net IRR: 20% – 25%
Insight Venture Partners is a private equity and venture capital firm investing in growth-stage companies. The firm was founded in 1995, has raised more than $8 billion and invested in more than 200+ growth-stage software, eCommerce, internet, and data-services companies.
9EMERGENCE CAPITAL PARTNERS
Average Net IRR: 40% – 50%
Emergence Capital was founded in 2003 by Jason Green, Brian Jacobs and Gordon Ritter to invest behind their shared thesis that enterprise software would move to the cloud. Since then, Emergence has invested in over 40 companies and become known as a leading investor in early and growth-stage enterprise cloud companies. Emergence has raised over $900 million to date.
10ALLIANCE CONSUMER GROWTH
Average Net IRR: N/A**
Alliance Consumer Growth (“ACG”) is a private equity investment firm focused exclusively on high-growth consumer companies. A four year old firm, ACG was founded by Julian Steinberg, Trevor Nelson and Josh Goldin, and had multiple recent successes out of its first $44 million fund including Shake Shack’s IPO and KRAVE Jerky’s sale to Hershey. The firm is now investing out of its second fund which closed in 2014 and targeting branded food, beverage, personal care, beauty, apparel, specialty retail and fast casual restaurants across the U.S.
11FIVE ELMS CAPITAL
Average Net IRR: 35% – 40%
Five Elms is a growth equity firm headquartered in Kansas City focused on providing capital to businesses in the financial services, media / information, and business services sectors. Five Elms was founded in 2007 by Fred Coulson and typically invests $2 million to $20 million for a minority or majority ownership position in growth equity, secondary, and later-stage venture opportunities.
12RIVERWOOD CAPITAL
Average Net IRR: 30% – 35%
Riverwood Capital is a globally-focused private equity firm that invests in high-growth businesses in the technology and services industries. The firm was founded in 2008, has over $2 billion of capital under management, and is investing out of its second fund with $1.25 billion of committed capital. Riverwood has offices in Menlo Park, New York and Sao Paulo. Their typical investment size ranges from $25 to $125 million.
13JMI EQUITY
Average Net IRR: N/A**
Founded in 1992, JMI is a growth equity firm focused on investing in leading software and technology-enabled services companies. They have invested in over 110 companies, with more than 65 of their portfolio companies having achieved successful outcomes such as sales to strategic acquirers or initial public offerings. JMI invests $10 million to $100 million across software, technology-enabled services and healthcare IT and services.
14GENERAL CATALYST GROUP
Average Net IRR: 15% – 20%
General Catalyst Partners is an investment firm that makes early-stage and growth equity investments. Their growth strategy is focused on $10 million to $50 million investments in infrastructure software, mobile, cloud computing, defense technology, marketplaces and information services. The launch of their newest fund in 2013 brought the firm’s total capital raised to approximately $3 billion. General Catalyst has offices in Cambridge, MA, Palo Alto, CA and New York City.
15ADAMS STREET PARTNERS
Average Net IRR: 15% – 20%
Adams Street Partners is a global leader in private equity with over $26 billion under management. Adams Street’s Direct Investment team makes $5 million to $20 million investments into late-stage and growth companies in the technology and healthcare spaces and has made over 240 investments since 1972.
16TPG GROWTH
Average Net IRR: 25% – 30%
Started in 2005, TPG Growth was carved out of its $67 billion parent company TPG which has historically specialized in buyouts. TPG Growth focuses on smaller-sized transactions than TPG in the $25-$100 million range. Their mandate ranges from growth investments for control of companies to taking minority stakes in businesses with significant prospects for growth. The firm just closed on its third global fund with total commitments of $3 billion.
17CAMDEN PARTNERS
Average Net IRR: N/A**
Camden Partners is a Baltimore-based private equity firm providing growth capital to lower-middle market companies in the education, healthcare and business services sectors. Since its founding in 1995, Camden has raised five funds that have deployed growth capital to over 70 companies, generating 11 IPOs and 21 sales to strategic and financial buyers.
18CLAIRVEST EQUITY PARTNERS
Average Net IRR: 15% – 20%
Clairvest Group Inc. was founded in 1987 as a Canadian-based private equity management firm that invested its own capital in entrepreneurial corporations. Clairvest has initiated investments in 38 different companies, accounting for invested capital of over $850 million. In July 2014 Clairvest held the final closing of Clairvest Equity Partners V (“CEP V”) at $600 million, of which Clairvest committed $180 million and third party investors committed $420 million. The fund invests between $15 million and $100 million in a variety of industries.
19SPECTRUM EQUITY INVESTORS
Average Net IRR: 15% – 20%
Founded in 1994, Spectrum Equity has raised six private equity funds totaling $4.7 billion of capital exclusively focused on the information economy. They seek opportunities to invest $25 – $100 million in growth companies with sustainable and defensible business models, strong recurring revenue, significant operating leverage, strong cash flow margins, and franchise customer loyalty. Specific sectors include software & information services, Internet & digital media, and communications, media & entertainment.
20NEW ENTERPRISE ASSOCIATES
Average Net IRR: 15% – 20%
Founded in 1977, New Enterprise Associates (NEA) one of the world’s largest and most active investment firms with more than $13 billion in committed capital. The firm’s track record includes more than 190 portfolio company IPOs and more than 300 acquisitions. NEA’s investment strategy spans all stages of investment from seed to fueling the growth of market leaders.
21GGV CAPITAL
Average Net IRR: 20% – 25%
GGV Capital was founded in 2000 and focuses on multi-stage investments in the US and China. With $2.7 billion under management across 6 funds, the firm invests across a range of technology sectors including mobile, internet, connected devices, social, commerce, travel, digital media, games, music, marketing and advertising, cloud, enterprise, SaaS, and security.
22TECHNOLOGY CROSSOVER VENTURES
Average Net IRR: 15% – 20%
Technology Crossover Ventures (TCV) provides growth capital to expansion stage information technology companies. TCV is one of the largest fund sponsors focused solely on technology, with nearly $10 billion raised since inception. They partner with a select number of new companies each year, usually adopting minority positions.
23AMPERSAND CAPITAL
Average Net IRR: 15% – 20%
Ampersand was founded as a spinout from PaineWebber in the late 1980s, and began investing in healthcare in 1994. Today, Ampersand is focused exclusively on growth equity investments in lower middle market healthcare companies. They look to invest $10 million to $30 million in companies with $10 million to $100 million of revenue.
24TRIDENT CAPITAL
Average Net IRR: 15% – 20%
Trident Capital is a growth equity and late stage venture capital firm located in Palo Alto, California. For their growth strategy their typical investment is up to $30 million in either control or minority positions. Industries of focus include software, cybersecurity, mobile, healthcare IT and business services.
25COLUMBIA CAPITAL EQUITY PARTNERS
Average Net IRR: N/A**
Based in Alexandria, VA and founded in 1989, Columbia Capital invests in high-growth businesses by contributing equity capital and sector-specific expertise across all stages of development in the communications, media and technology sectors. They have invested in over 150 companies, are currently managing approximately $2.5 billion dollars of total capital and their most recent fund has total commitments of $441 million.
*Returns were estimated by GrowthCap based on independent 3rd party financial data sources
**Fund returns confidentially disclosed to GrowthCap
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