13 Top Growth Equity Firms in The World (2024)

Global growth capital investors raised a record $132 billion in 2021, and although it is believed to have trailed off significantly in 2022 - primarily owing to rising interest rates - it is still undoubtedly a behemoth.

In this article, we look at the 13 top growth equity companies in the world and what makes the industry tick.

Understanding Growth Equity

Similarly to mergers and acquisitions, growth equity is a heady mixture of strategy and finance.

In a growth equity strategy, investors are looking to invest in maturing companies with proven growth strategies.

As the name suggests, the investor receives preferred equity in the company for making the investment and expects to see the company use the funds provided to fuel growth.

Examples of how the growth equity can be used by the firm include:

• Acquisitions
• Entry into new markets
• New product development
• Capital asset renewals

Because the companies that receive growth equity already tend to be successful in their industries, and can maintain fast growth - and hence, are relatively low risk - they can obtain favorable terms from investors.

In this respect, growth equity is different from venture capital, where although there is also significant growth, the company still isn’t mature enough to have a positive income.

Evaluating Growth Equity Firms

There are several factors to consider when looking at growth equity from the perspective of a company looking for an investment. In general terms, the following are the factors that company CXOs should look out for when choosing an investment partner of this kind:

• Track record: Track record is the best marketing message for any investment firm. Check the firm’s historical performance - including that of funds which might have closed early - and see how their relationship with their investment partners lasted over time.
• Sector focus: A growth equity firm with a focus on your company’s industry is likely to have subject matter experts, deep industry knowledge, and good insights into strategy. Hence, sector focus is an extremely important consideration.
• Portfolio companies: In a sense, portfolio companies should already be taken care of with the previous two bullet points but look for how the growth equity investor’s portfolio companies have fared over time. This is likely to be mirrored with you.
• Deal structure: Deal structure, while not annulling any of the above, has to be attractive for your company for the other factors to become relevant. Look for good terms, and an investment solution which will almost certainly generate value in the long term.
• Cultural fit: A good start to establish cultural fit is when a growth equity firm appreciates you conducting some research into whether they’re suitable. Once that first step has been passed, you can conduct a deep dive into other cultural aspects.

Silversmith Capital Partners

The phrases that Silversmith Capital Partners chose for the wall of its headquarters, may tell you more about the company than we ever can. The thought-provoking quotations could make an opening discussion worth the while on their own.

• Founded: 2015
• Headquarters: Boston, MA.
• Sector Focus: SaaS, Information Technology, and Healthcare
• AUM: $3.3B (2022).

Silversmith Capital Partners is a relatively new kid on the block, which has just closed its fourth growth equity fund. Their growth strategy looks at a company’s ability to scale, capital efficiency, and naturally, growth. Notable investments include PDFTron Systems, Centauri Health Solutions, and Sound Physicians.

JMI Equity

A company that has been using the same ‘fundamental thesis’ since 1992: “Every year, the dollars and percentage invested in software goes up, while the dollars and percentage spent on hardware goes down.”

• Founded: 1992
• Headquarters: Baltimore, MD.
• Sector Focus: Software.
• AUM: $8B.

In May 2023, JMI Equity closed its 11th and biggest growth equity fund to date, coming in at $2.4 billion. That’s a raise based on track record: In 31 years of existence, it has 180 investments and 115 exits and counting. Notable companies they have invested in include ServiceNow, Eloqua, and DoubleClick.

Great Hill Partners

When Chris Gaffney founded Great Hill Partners in 1998, it was with the aim of providing successful executives with the funding and support needed to build enterprise class businesses. Since then, the company has done just that for over 100 companies.

• Founded: 1998
• Headquarters: Boston, MA.
• Sector Focus: Technology
• AUM: $13.4B

A glance at the management team at Great Hill Partners tells you a lot about the importance of track record. Mr. Gaffney has served on over 50 boards alone. Their eighth fund closed in January 2022 with a value of nearly $5 billion. Notable companies in Great Hill's portfolio have included Wayfair, Bombas, Gizmodo Media Group, and The RealReal.

Vista Equity Partners

Robert F. Smith, founder and CEO of Vista Equity Partners since its foundation, was named by Forbes as one of the 100 Greatest Minds Alive. Of his more quotable lines, and one most suitable for company owners, he has said: “If you can’t solve easy problems now, you will not be able to solve difficult problems later.”

• Founded: 2000
• Headquarters: San Francisco, CA.
• Sector Focus: Technology.
• AUM: ~$100B.

Among other reasons, Vista is interesting because it provides its companies with a highly structured playbook for creating value, which looks at areas like product development, sales and marketing, and acquisitions. Notable investments include Misys, Solera, Advanced Computer Software, and Ping Identity.

Francisco Partners

Francisco Partners founder Dipanjan 'DJ' Deb recently told Business Insider that he spent 13 months unemployed and without a salary before founding the company. In 2022, it raised $22 billion for new investments.

• Founded: 1999.
• Headquarters: San Francisco, CA.
• Sector Focus: Technology
• AUM: $41.9B

Mid-market companies will have to tell a strong growth story to attract the attention of Francisco Partners. It only makes investments of $100 million and upward. Notable investments include Verifone, GoodRx, and LogMeIn.

Five Elms Capital

Kansas City may not the center of the investment universe. That hasn’t stopped Five Elms Capital quickly moving up the ranks of the most highly regarded growth capital firms over the past 16 years.

• Founded: 2007.
• Headquarters: Kansas City, MO.
• Sector Focus: B2B Software.
• AUM: $1.5B.

On its website, Five Elms Capital makes a fascinating pitch to company owners: It will invest $5 million to $75 million in companies with revenues of $2 million to $20 million. That is a serious commitment to growth. Notable portfolio companies include Qualio, FormAssembly, and AutoEntry.

Brighton Park Capital

In little over three years, this New York-based growth capital fund has made ripples in the investment world. The company’s philosophy on ‘selective partnership’ is one for many CXOs looking for outside investments to consider.

• Founded: 2019
• Headquarters: Greenwich, CT.
• Sector Focus: Technology
• AUM: ~$1.5B.

Brighton Park Capital closed its debt fund in 2020 for $1.1B and is already close to closing its second for $1.5B. It typically invests between $25 million and $75 million in each company. Some of their current portfolio investments include OPSWAT, a cybersecurity firm, and Panalgo, a healthcare analytics company.

Sageview Capital

Sageview Capital was founded by two former executive directors at KKR, which the company still has close ties to, giving it serious clout when it comes to fundraising and networking.

• Founded: 2005.
• Headquarters: Greenwich, CT.
• Sector Focus: Technology, Financial Services, Business Services.
• AUM: $2B.

Sageview Capital differentiates itself through a more hands-on approach than most of its peers. The company generally invests between $20 million and $80 million per transaction. Notable investments have included United Capital, MetricStream, and Avalara.

Long Ridge Equity

“Life is too short to work with jerks. We work with good people to build great businesses.” Tag line from Long Ridge Equity’s website.

• Founded: 2007.
• Headquarters: New York, NY.
• Sector Focus: Financial Technology and Business Technology.
• AUM: $1B.

Long Ridge Equity looks at companies with revenues as low as $5 million, and typically invests between $20 and $100 million per transaction, with a notable emphasis on the quality of the people at the firms they look to invest in.  Notable investments have included BlueTarp Financial, Broadway Technology, and Portware.

Battery Ventures

In 2023, Battery Ventures celebrates 40 years of existence. The technology companies it invests these days look nothing like the ones from back then, but they’ve still got growth built into their DNA.

• Founded: 1983.
• Headquarters: Boston, MA.
• Sector Focus: Technology
• AUM: ~$13B.

What can we say about an investor like Battery Ventures? Technology trends come and go, but they’re an ever present: 450 companies across 40 funds and counting. Notable companies in Battery's portfolio have included Gainsight, Glassdoor, Marketo, and Wayfair.

Mainsail Partners

Mainsail Partners was one of the first investment firms in the lower middle market space to recognize the potential of generating huge growth through operational improvements. 40 years later, it is still reaping the rewards.

• Founded: 1983.
• Headquarters: San Francisco, CA.
• Sector Focus: Software.
• AUM: ~$3B.

Mainsail Partners takes a different investment approach to all other firms on this list in that it focuses on bootstrapped companies where its growth capital can have more impact. Notable investments have included nCourt, ResMan, and SentryOne.

Kayne Partners

Kayne Partners was founded by Richard Payne, who also founded Payne Anderson Capital Advisors, the largest investor in energy pipelines in the United States. This guy knows where the money is.

• Founded: 2002
• Headquarters: Los Angeles, CA.
• Sector Focus: Technology
• AUM: $30B.

Kayne Partners has a flexible and entrepreneur-friendly investment approach. The firm generally invests between $7 million to $30 million in businesses that have a strong management team, a proven business model, and high growth potential.Notable investments include Prometheus Group, Appriss, and Zadara Storage.

Oak Hill Capital

Aside from hundreds of successful investments, Robert M. Bass, founder of  Oak Hill Capital helped launch the careers of David Bonderman and Jim Coulter of Texas Pacific Group, now called TPG Capital.

• Founded: 1986.
• Headquarters: New York, NY.
• Sector Focus: Services, Industrials, Media, and Consumer
• AUM: ~$20B.

Despite being a growth capital investor, Oak Hill Capital uses what it calls a ‘patient capital’ approach, investing for the long-term and supporting its target company owners through all business cycles. Notable investments have included Checkers & Rally’s, EPIC Insurance Brokers & Consultants, and Berlin Packaging.

The Landscape of Growth Equity Firms

Although, as the above list indicates, several of the top growth equity firms are located in the Bay Area, it’s far from being a rule for these types of investors.

While the venture capital world tends to create self-sustaining hubs that attract tech talent, tech investors, and a combination of the two, top growth equity firms can be anywhere: There’s no obvious extra benefit to them being in San Francisco, as say, New York. Growth equity firms in New York are therefore just as likely to be successful as those from anywhere else.

How to Engage with Growth Equity Firms

As usual, the steps provided are general, but most engagements with growth equity firms will look something like the following:

Understand your own requirements

Why do you need cash? What problem or opportunity is obtaining that cash going to address? Knowing this and being sure that it will address the problem is fundamental to the whole process.

Create a shortlist of potential growth partners

As the list shows, growth equity is a relatively broad term that covers companies with differing strategies and outlooks. Look at investment philosophy, portfolio, and track record, when deciding on who fits.

Investor outreach

When the shortlist is made, it’s time to make contact with those investors, letting them know what brought you here (i.e., numbers 1 and 2): Why you need the cash, and why you think they’re going to be a good fit.

Initial meeting

Assuming one of the firms expresses interest in an investment, the next step is a meeting (following an initial call) with someone from the investment team. This is where they get to know you and make a better assessment of you as well as your firm.

Due diligence

Due diligence is where the chaff is separated from the wheat. As DealRoom has outlined, this is ‘make or break’ for a lot of otherwise good companies that fail to take care of important details.

Term sheet

Assuming due diligence is passed, the investor will present a term sheet outlining the terms of the investment, including the amount of capital, valuation, governance terms, and exit rights.

Closing

If all is okay with the term sheet - and any outstanding due diligence issues - the deal moves to closing. Here, both parties sign definitive agreements, funds are wired by the investor according to the term sheet, and the partnership begins.

Ongoing relationship

Depending on what was agreed between the growth equity investor and the company, this relationship could be very hands-on, or viewed from a distance, but there will virtually always be some influence from the investor on strategy.

Conclusion

In growth equity, growth is the operative word.

This is a form of investment that covers a broad swathe of strategies and company sizes, but ultimately, the aim for investors is being able to see an obvious route to growth for the company in a relatively short period of time.

So, aside from being a broad category, this makes it an exciting one. Talk to DealRoom about how our deal management platform can help you, whether you’re looking to invest or to be invested in.