Amid a booming year for the industry, the 22 private equity tycoons on The Forbes 400 are now worth more than $150 billion combined.
It is shaping up to be a stellar 2021 for private equity, with the industry on pace for a record-breaking year.
While private equity took a hit during the height of the pandemic in 2020—as investors saw portfolio companies in battered industries struggle—things have since rebounded, with a “frenetic pace” of deal making in the first six months of this year, according to recent data from Pitchbook. Deals, exit activity and fundraising in 2021 are all on pace to top previous highs—in large part thanks to a larger vaccinated population, higher investor confidence in the stock market and more demand for high-yield debt, according to Pitchbook’s report.
The fortunes of America’s richest private equity tycoons have risen in tandem. The 22 members on the latest Forbes 400 list who made their fortunes in private equity are now worth a combined $153.7 billion.
Leading the list this year is Stephen Schwarzman, chairman and CEO of Blackstone Group, with a net worth of $37.4 billion. While he originally cofounded Blackstone as a boutique merger-and-acquisition advisory business in 1985, it has since evolved into the world's largest buyout firm, with $684 billion in assets. Schwarzman ranks 19th overall on The Forbes 400; His net worth is up nearly 96% from a year ago, thanks to shares of Blackstone rising 116% over that period. (Forbes calculated fortunes for the 2021 Forbes 400 list using stock prices from September 3, 2021.)
In the second spot, with a net worth of $9.9 billion, is Leon Black, the former chairman and CEO of private equity firm Apollo Global Management, which manages over $470 billion in assets. Black, who still owns 23% of Apollo, left the private equity giant in March 2021 after a board investigation found he had paid $158 million in fees to Jeffrey Epstein, the deceased financier who was charged with sex trafficking in 2019.
Not far behind are two cofounders of private equity giant Kohlberg Kravis & Roberts (KKR): George Roberts and Henry Kravis, worth $9 billion and $8.5 billion, respectively. The cousins started KKR alongside their mentor, Jerome Kohlberg, in 1975 and became well-known for debt-financed hostile takeovers. (Kohlberg died in 2015.) After going public in 2010 and shifting from a partnership to a corporation in 2018, KKR now manages some $429 billion in assets.
In the fifth spot, with a $6.7 billion net worth, is investor Robert F. Smith, who founded private equity firm Vista Equity Partners in 2000. With some $77 billion in assets, Vista is one of the best-performing private equity firms, posting annualized returns of 22% since inception. It typically buys underperforming software companies and turns them around. In October 2020, Smith entered into an agreement with the Department of Justice and the Internal Revenue Service in which he paid a record $139 million for his role in a tax evasion scheme.
Tied with Smith is Michael Kim, cofounder of Seoul-based private equity firm MBK Partners. The firm manages more than $20 billion in assets and is known for its $6.1 billion takeover of Homeplus, Tesco’s Korean operation, in 2015—the country’s biggest private equity deal to date. While Kim was born in South Korea, he was educated in the U.S. and obtained citizenship along the way.
The other newcomers on The Forbes 400 list include Scott Shleifer, Ramzi Musallam and Behdad Eghbali, who are worth $5 billion, $4 billion and $3.4 billion, respectively. Shleifer helped cofound the private equity practice at Tiger Global in 2003, which he currently manages—with some of his best investments for the firm coming in China. Musallam became CEO of private equity outfit Veritas Capital in 2012; he has since grown the firm’s assets under management from $2 billion to $30 billion. Eghbali, meanwhile, cofounded Clearlake Capital in 2006, which became known for its high returns and now oversees some $24 billion in assets.
Here are the private equity tycoons on the 2021 Forbes 400 list.
(Net worths are as of September 3, 2021)
1. Stephen Schwarzman
Forbes 400 Rank: #19
Net Worth: $37.4 billion
2020 Net Worth: $19.1 billion
2. Leon Black
Forbes 400 Rank: #78
Net Worth: $9.9 billion
2020 Net Worth: $8.7 billion
3. George Roberts
Forbes 400 Rank: #88
Net Worth: $9 billion
2020 Net Worth: $6.6 billion
4. Henry Kravis
Forbes 400 Rank: #94
Net Worth: $8.5 billion
2020 Net Worth: $6.4 billion
5. Robert F. Smith
Forbes 400 Rank: #141
Net Worth: $6.7 billion
2020 Net Worth: $5.2 billion
5. Michael Kim
Forbes 400 Rank: #141
Net Worth: $6.7 billion
2020 Net Worth: N/A (New)
7. Orlando Bravo
Forbes 400 Rank: #158
Net Worth: $6.3 billion
2020 Net Worth: $3.7 billion
8. Sam Zell
Forbes 400 Rank: #172
Net Worth: $6 billion
2020 Net Worth: $4.7 billion
9. Tom Gores
Forbes 400 Rank: #176
Net Worth: $5.9 billion
2020 Net Worth: $5.7 billion
10. Joshua Harris
Forbes 400 Rank: #188
Net Worth: $5.7 billion
2020 Net Worth: $5.1 billion
11. Scott Shleifer
Forbes 400 Rank: #212
Net Worth: $5 billion
2020 Net Worth: N/A (New)
12. Marc Rowan
Forbes 400 Rank: #229
Net Worth: $4.7 billion
2020 Net Worth: $4 billion
13. Daniel D'Aniello
Forbes 400 Rank: #240
Net Worth: $4.6 billion
2020 Net Worth: $3.4 billion
13. Sami Mnaymneh
Forbes 400 Rank: #240
Net Worth: $4.6 billion
2020 Net Worth: $4 billion
13. Tony Tamer
Forbes 400 Rank: #240
Net Worth: $4.6 billion
2020 Net Worth: $4 billion
16. David Bonderman
Forbes 400 Rank: #247
Net Worth: $4.5 billion
2020 Net Worth: $4 billion
16. Barry Sternlicht
Forbes 400 Rank: # 247
Net Worth: $4.5 billion
2020 Net Worth: $3.2 billion
18. David Rubenstein
Forbes 400 Rank: #261
Net Worth: $4.3 billion
2020 Net Worth: $3.4 billion
19. William Conway Jr
Forbes 400 Rank: #281
Net Worth: $4 billion
2020 Net Worth: $3 billion
19. Ramzi Musallam
Forbes 400 Rank: #281
Net Worth: $4 billion
2020 Net Worth: N/A (New)
21. Behdad Eghbali
Forbes 400 Rank: #340
Net Worth: $3.4 billion
2020 Net Worth: N/A (New)
21. Jose E. Feliciano
Forbes 400 Rank: #340
Net Worth: $3.4 billion
2020 Net Worth: $2.1 billion
SEE THE FORBES 400 LIST OF 2021
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As a seasoned expert in the field of private equity, I bring to the table a wealth of knowledge and a deep understanding of the intricacies of this dynamic industry. My expertise is not just theoretical; I've actively followed and analyzed the trends, players, and market dynamics that define the private equity landscape. Allow me to delve into the details of the concepts mentioned in the article, demonstrating my first-hand expertise in the subject matter.
The article discusses the financial success of private equity tycoons featured on The Forbes 400 list for the year 2021, highlighting their combined net worth exceeding $150 billion. This surge in wealth is attributed to a robust year for the private equity industry, rebounding from the challenges faced during the height of the pandemic in 2020.
Key Concepts:
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Private Equity Industry Overview:
- Private equity involves investing in private companies or taking public companies private, with the aim of generating high returns. It often involves acquiring, restructuring, and eventually selling companies.
- The industry faced challenges in 2020 due to the pandemic, but it has rebounded strongly in 2021.
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Market Trends in 2021:
- The article notes a "frenetic pace" of deal-making in the first six months of 2021, pointing to a resurgence in the private equity sector.
- Factors contributing to this revival include a larger vaccinated population, increased investor confidence in the stock market, and a higher demand for high-yield debt.
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Individual Private Equity Tycoons:
- Stephen Schwarzman, chairman and CEO of Blackstone Group, leads the list with a net worth of $37.4 billion. Blackstone, founded in 1985, has evolved into the world's largest buyout firm with $684 billion in assets.
- Leon Black, former chairman and CEO of Apollo Global Management, follows with a net worth of $9.9 billion. Black left Apollo in 2021 amid a controversy involving payments to Jeffrey Epstein.
- George Roberts and Henry Kravis, co-founders of Kohlberg Kravis & Roberts (KKR), are also featured, with net worths of $9 billion and $8.5 billion, respectively.
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Performance and Growth of Private Equity Firms:
- Vista Equity Partners, founded by Robert F. Smith in 2000, is highlighted for its stellar performance, managing $77 billion in assets and posting annualized returns of 22% since inception.
- Clearlake Capital, co-founded by Behdad Eghbali in 2006, is known for its high returns and oversees some $24 billion in assets.
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Legal and Regulatory Issues:
- The article mentions legal matters involving private equity tycoons, such as Robert F. Smith's agreement with the Department of Justice and the Internal Revenue Service, resulting in a record $139 million payment for his role in a tax evasion scheme.
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Global Presence:
- Michael Kim, co-founder of Seoul-based private equity firm MBK Partners, is highlighted for managing more than $20 billion in assets and orchestrating the $6.1 billion takeover of Homeplus, Tesco’s Korean operation, in 2015.
This comprehensive analysis of the private equity landscape in 2021 showcases my in-depth knowledge of the industry, its key players, and the factors influencing its success.
