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More PE funds than McDonald's
Posted on 11/4/25 at 8:10 pm
Posted on 11/4/25 at 8:10 pm
quote:CNBC
Private equity fund managers are bracing for a wave of consolidation as investors demand higher returns and stronger governance, forcing a shakeout in an overcrowded industry, several industry veterans said at a high-level finance summit in Hong Kong on Tuesday.
“How is it that there are more private equity funds in North America than there are McDonald’s franchises,” said KKR & Co’s co-CEO Joe Bae on Tuesday, noting that the U.S. has about 14,000 of the fast-food outlets and 19,000 private equity funds.
The bifurcation of funds’ performance has become more “extreme” than at any time in the past decade, Bae said at the Global Financial Leaders’ Investment Summit. “You have to be very disciplined in a market like this and focus on ... fundamental, operational value creation in companies, bring better governance to the table,” he said.
2
Posted on 11/4/25 at 8:21 pm to bigjoe1
So, at the same time private equity managers are lobbying for inclusion in retirement accounts, they are also looking to consolidate the available options…checks out.
Posted on 11/5/25 at 9:28 am to lsuconnman
That is a ton and it's because everyone wants to sit at the table and make partner level income so they start their own firm.
We do need quite a few to keep the engine running though. PE in general is built on rolling up. Smaller PE firms buy smaller companies, grow them through putting a few in the same industry together/streamlining and then need a larger PE firm to come and and buy them. Keeps moving upmarket until you reach the big boys at the top who are not even looking at the portfolio companies the small PE firms are buying.
PE firm consolidation is a natural evolution of the game they are playing.
We do need quite a few to keep the engine running though. PE in general is built on rolling up. Smaller PE firms buy smaller companies, grow them through putting a few in the same industry together/streamlining and then need a larger PE firm to come and and buy them. Keeps moving upmarket until you reach the big boys at the top who are not even looking at the portfolio companies the small PE firms are buying.
PE firm consolidation is a natural evolution of the game they are playing.
Posted on 11/5/25 at 10:07 am to bigjoe1
quote:
19,000 private equity funds.
So that explains why I get 3 phone calls and 50 emails a day from firms wanting to buy my company.
Posted on 11/5/25 at 11:44 am to Ten Bears
Working in PE isn't the way to make money; starting a company that PE wants to buy is, these clowns will pay 15x EBITDA for a curtain hanging business.
Posted on 11/5/25 at 11:50 am to barry
There’s an entertaining YT video “I started a plumbing biz to sell to PE”.
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