Diagram of the structure of a generic private equity fund

A private equity firm is an investment manager that makes investments in the private equity of operating companies through a variety of loosely affiliated investment strategies including leveraged buyout, venture capital, and growth capital. Often described as a financial sponsor, each firm will raise funds that will be invested in accordance with one or more specific investment strategies.

Typically, a private equity firm will raise pools of capital, or private equity funds that supply the equity contributions for these transactions. Private equity firms will receive a periodic management fee as well as a share in the profits earned (carried interest) from each private equity fund managed.

Private equity firms, with their investors, will acquire a controlling or substantial minority position in a company and then look to maximize the value of that investment. Private equity firms generally receive a return on their investments through one of the following avenues:

• an initial public offering (IPO) — shares of the company are offered to the public, typically providing a partial immediate realization to the financial sponsor as well as a public market into which it can later sell additional shares;
• a merger or acquisition — the company is sold for either cash or shares in another company;
• a Recapitalization — cash is distributed to the shareholders (in this case the financial sponsor) and its private equity funds either from cash flow generated by the company or through raising debt or other securities to fund the distribution.

Ranking private equity firms[link]

According to an updated 2008 ranking created by industry magazine Private Equity International^[1] (The PEI 50), the largest private equity firms include The Carlyle Group, Kohlberg Kravis Roberts, Goldman Sachs Principal Investment Group, The Blackstone Group, Bain Capital and TPG Capital. These firms are typically direct investors in companies rather than investors in the private equity asset class and for the most part the largest private equity investment firms focused primarily on leveraged buyouts rather than venture capital.

Preqin ltd (formerly known as Private Equity Intelligence), an independent data providers provides a ranking of the 25 largest private equity investment managers. Among the largest firms in that ranking were AlpInvest Partners, AXA Private Equity, AIG Investments, Goldman Sachs Private Equity Group and Pantheon Ventures.

Because private equity firms are continuously in the process of raising, investing and distributing their private equity funds, capital raised can often be the easiest to measure. Other metrics can include the total value of companies purchased by a firm or an estimate of the size of a firm's active portfolio plus capital available for new investments. As with any list that focuses on size, the list does not provide any indication as to relative investment performance of these funds or managers.

Private equity firms and private equity funds: an Illustration[link]

The following is an illustration of the difference between a private equity firm and a private equity fund:

See also[link]

• Private equity
• Private equity fund
• List of private equity firms
• Leveraged buyout
• Management buyout
• History of private equity and venture capital

References[link]

This article includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations. (April 2009)

• Private equity – a guide for pension fund trustees. Pensions Investment Research Consultants (PIRC) for the Trades Union Congress.

• Krüger Andersen, Thomas. Legal Structure of Private Equity Funds. Private Equity and Hedge Funds 2007.

• Prowse, Stephen D. The Economics of the Private Equity Market. Federal Reserve Bank of Dallas, 1998.

Private Equity Firms - PrivateEquityFirms.com, public directory of investment groups.

v t e Topics on private equity and venture capital Basic investment types Buyout Venture Mezzanine Growth Secondaries Equity co-investment History History of private equity and venture capital Early history of private equity Private equity in the 1980s Private equity in the 1990s Private equity in the 2000s Terms and concepts Buyout Financial sponsor Management buyout Divisional buyout Buy–sell agreement Leveraged recapitalization Dividend recapitalization Venture Seed money Startup company Angel investor Venture capital financing Pre-money valuation Post-money valuation Venture round Venture debt Bootstrap funding Structure Private equity firms and funds Limited partnership Limited liability company Carried interest Management fee Publicly traded private equity Business Development Company Venture capital trust Private investment in public equity (PIPE) Pledge fund Investors Corporations Institutional investors Pension funds Insurance companies Fund of funds Endowments Foundations Investment banks Merchant banks Commercial banks High-net-worth individuals Family offices Sovereign wealth funds Related financial terms Undercapitalization Initial public offering (IPO) M&A Leverage High-yield debt Capital structure Capital call EBITDA IRR Envy ratio Private equity and venture capital investors Private equity firms Venture capital firms Angel investors Portfolio companies

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v t e

In finance, private equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange.^[1]

A private equity investment will generally be made by a private equity firm, a venture capital firm or an angel investor. Each of these categories of investor has its own set of goals, preferences and investment strategies; each however providing working capital to a target company to nurture expansion, new product development, or restructuring of the company’s operations, management, or ownership.^[2]

Bloomberg BusinessWeek has called private equity a rebranding of leveraged buyout firms after the 1980s. Among the most common investment strategies in private equity are: leveraged buyouts, venture capital, growth capital, distressed investments and mezzanine capital. In a typical leveraged buyout transaction, a private equity firm buys majority control of an existing or mature firm. This is distinct from a venture capital or growth capital investment, in which the investors (typically venture capital firms or angel investors) invest in young or emerging companies, and rarely obtain majority control.

Private equity is also often grouped into a broader category called private capital, generally used to describe capital supporting any long-term, illiquid investment strategy.

Strategies[link]

The strategies private equity firms may use are as follows, leveraged buyout being the most important.

Leveraged buyout[link]

Diagram of the basic structure of a generic leveraged buyout transaction

Leveraged buyout, LBO or Buyout refers to a strategy of making equity investments as part of a transaction in which a company, business unit or business assets is acquired from the current shareholders typically with the use of financial leverage.^[3] The companies involved in these transactions are typically mature and generate operating cash flows.^[4]

Leveraged buyouts involve a financial sponsor agreeing to an acquisition without itself committing all the capital required for the acquisition. To do this, the financial sponsor will raise acquisition debt which ultimately looks to the cash flows of the acquisition target to make interest and principal payments.^[5] Acquisition debt in an LBO is often non-recourse to the financial sponsor and has no claim on other investment managed by the financial sponsor. Therefore, an LBO transaction's financial structure is particularly attractive to a fund's limited partners, allowing them the benefits of leverage but greatly limiting the degree of recourse of that leverage. This kind of financing structure leverage benefits an LBO's financial sponsor in two ways: (1) the investor itself only needs to provide a fraction of the capital for the acquisition, and (2) the returns to the investor will be enhanced (as long as the return on assets exceeds the cost of the debt).^[6]

As a percentage of the purchase price for a leverage buyout target, the amount of debt used to finance a transaction varies according the financial condition and history of the acquisition target, market conditions, the willingness of lenders to extend credit (both to the LBO's financial sponsors and the company to be acquired) as well as the interest costs and the ability of the company to cover those costs. Historically the debt portion of a LBO will range from 60%–90% of the purchase price, although during certain periods the debt ratio can be higher or lower than the historical averages.^[7] Between 2000–2005 debt averaged between 59.4% and 67.9% of total purchase price for LBOs in the United States.^[8]

Simple example[link]

A private equity fund, ABC Capital II, borrows $9bn from a bank (or other lender). To this it adds $2bn of equity – money from its own partners and from limited partners (pension funds, rich individuals, etc.). With this $11bn it buys all the shares of an underperforming company, XYZ Industrial (after due diligence, i.e. checking the books). It replaces the senior management in XYZ Industrial, and they set out to streamline it. The workforce is reduced, some assets are sold off, etc. The objective is to increase the value of the company for a fast sale. The stockmarket is experiencing a bull market, and XYZ Industrial is sold two years after the buy-out for $13bn, yielding a profit of $2bn. The original loan can now be paid off with interest of say $0.5bn. The remaining profit of $1.5bn is shared among the partners. Taxation of such gains is at capital gains rates. Note that part of that profit results from turning the company around, and part results from the general increase in share prices in a buoyant stockmarket, the latter often being the greater component.^[9]

Notes:

• The lenders (the people who put up the $11bn in the example) can insure their loans against default, at a cost, by selling credit derivatives, including credit default swaps (CDSs) and collateralised loan obligations (CLOs), to other institutions, such as hedge funds.
• Often the loan/equity ($11bn above) is not paid off after sale but left on the books of the company (XYZ Industrial) for it to pay off over time. This can be advantageous since the interest is typically offsettable against the profits of the company, thus reducing, or even eliminating, tax.

Growth capital[link]

Growth Capital refers to equity investments, most often minority investments, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a major acquisition without a change of control of the business.^{[citation needed]}

Companies that seek growth capital will often do so in order to finance a transformational event in their life cycle. These companies are likely to be more mature than venture capital funded companies, able to generate revenue and operating profits but unable to generate sufficient cash to fund major expansions, acquisitions or other investments. Because of this lack of scale these companies generally can find few alternative conduits to secure capital for growth, so access to growth equity can be critical to pursue necessary facility expansion, sales and marketing initiatives, equipment purchases, and new product development.^[10] The primary owner of the company may not be willing to take the financial risk alone. By selling part of the company to private equity, the owner can take out some value and share the risk of growth with partners.^[11] Capital can also be used to effect a restructuring of a company's balance sheet, particularly to reduce the amount of leverage (or debt) the company has on its balance sheet.^[12] A Private investment in public equity, or PIPEs, refer to a form of growth capital investment made into a publicly traded company. PIPE investments are typically made in the form of a convertible or preferred security that is unregistered for a certain period of time.^[13][14] The Registered Direct, or RD, is another common financing vehicle used for growth capital. A registered direct is similar to a PIPE but is instead sold as a registered security.

Mezzanine capital[link]

Mezzanine capital refers to subordinated debt or preferred equity securities that often represent the most junior portion of a company's capital structure that is senior to the company's common equity. This form of financing is often used by private equity investors to reduce the amount of equity capital required to finance a leveraged buyout or major expansion. Mezzanine capital, which is often used by smaller companies that are unable to access the high yield market, allows such companies to borrow additional capital beyond the levels that traditional lenders are willing to provide through bank loans.^[15] In compensation for the increased risk, mezzanine debt holders require a higher return for their investment than secured or other more senior lenders.^[16][17] Mezzanine securities are often structured with a current income coupon.

Venture capital[link]

Venture capital^[18] is a broad subcategory of private equity that refers to equity investments made, typically in less mature companies, for the launch, early development, or expansion of a business. Venture investment is most often found in the application of new technology, new marketing concepts and new products that have yet to be proven.^[19][20]

Venture capital is often sub-divided by the stage of development of the company ranging from early stage capital used for the launch of start-up companies to late stage and growth capital that is often used to fund expansion of existing business that are generating revenue but may not yet be profitable or generating cash flow to fund future growth.^[21]

Entrepreneurs often develop products and ideas that require substantial capital during the formative stages of their companies' life cycles.^[22] Many entrepreneurs do not have sufficient funds to finance projects themselves, and they must therefore seek outside financing.^[23] The venture capitalist's need to deliver high returns to compensate for the risk of these investments makes venture funding an expensive capital source for companies. Being able to secure financing is critical to any business, whether it’s a startup seeking venture capital or a mid-sized firm that needs more cash to grow.^[24] Venture capital is most suitable for businesses with large up-front capital requirements which cannot be financed by cheaper alternatives such as debt. Although venture capital is often most closely associated with fast-growing technology and biotechnology fields, venture funding has been used for other more traditional businesses.^[19][25]

Distressed and special situations[link]

Distressed or Special Situations is a broad category referring to investments in equity or debt securities of financially stressed companies.^[26][27][28] The "distressed" category encompasses two broad sub-strategies including:

• "Distressed-to-Control" or "Loan-to-Own" strategies where the investor acquires debt securities in the hopes of emerging from a corporate restructuring in control of the company's equity;^[29]
• "Special Situations" or "Turnaround" strategies where an investor will provide debt and equity investments, often "rescue financing" to companies undergoing operational or financial challenges.^[30]

In addition to these private equity strategies, hedge funds employ a variety of distressed investment strategies including the active trading of loans and bonds issued by distressed companies.

Secondaries[link]

Secondary investments refer to investments made in existing private equity assets. These transactions can involve the sale of private equity fund interests or portfolios of direct investments in privately held companies through the purchase of these investments from existing institutional investors.^[31] By its nature, the private equity asset class is illiquid, intended to be a long-term investment for buy and hold investors. Secondary investments provide institutional investors with the ability to improve vintage diversification, particularly for investors that are new to the asset class. Secondaries also typically experience a different cash flow profile, diminishing the j-curve effect of investing in new private equity funds.^[32][33] Often investments in secondaries are made through third party fund vehicle, structured similar to a fund of funds although many large institutional investors have purchased private equity fund interests through secondary transactions.^[34] Sellers of private equity fund investments sell not only the investments in the fund but also their remaining unfunded commitments to the funds.

Other strategies[link]

Other strategies that can be considered private equity or a close adjacent market include:

• Real Estate: in the context of private equity this will typically refer to the riskier end of the investment spectrum including "value added" and opportunity funds where the investments often more closely resemble leveraged buyouts than traditional real estate investments. Certain investors in private equity consider real estate to be a separate asset class.

• Infrastructure: investments in various public works (e.g., bridges, tunnels, toll roads, airports, public transportation and other public works) that are made typically as part of a privatization initiative on the part of a government entity.^[35][36][37]

• Energy and Power: investments in a wide variety of companies (rather than assets) engaged in the production and sale of energy, including fuel extraction, manufacturing, refining and distribution (Energy) or companies engaged in the production or transmission of electrical power (Power).

• Merchant banking: negotiated private equity investment by financial institutions in the unregistered securities of either privately or publicly held companies.^[38]

• Fund of Funds: investments made in a fund whose primary activity is investing in other private equity funds. The fund of funds model is used by investors looking for:

• Diversification but have insufficient capital to diversify their portfolio by themselves
• Access to top performing funds that are otherwise oversubscribed
• Experience in a particular fund type or strategy before investing directly in funds in that niche
• Exposure to difficult-to-reach and/or emerging markets
• Superior fund selection by high-talent fund of fund managers/teams

History and development[link]

Early history and the development of venture capital[link]

The seeds of the US private equity industry were planted in 1946 with the founding of two venture capital firms: American Research and Development Corporation (ARDC) and J.H. Whitney & Company.^[39] Before World War II, venture capital investments (originally known as "development capital") were primarily the domain of wealthy individuals and families. ARDC was founded by Georges Doriot, the "father of venture capitalism"^[40] and founder of INSEAD, with capital raised from institutional investors, to encourage private sector investments in businesses run by soldiers who were returning from World War II. ARDC is credited with the first major venture capital success story when its 1957 investment of $70,000 in Digital Equipment Corporation (DEC) would be valued at over $355 million after the company's initial public offering in 1968 (representing a return of over 500 times on its investment and an annualized rate of return of 101%).^[41] It is commonly noted that the first venture-backed startup is Fairchild Semiconductor (which produced the first commercially practicable integrated circuit), funded in 1959 by what would later become Venrock Associates.^[42]

Origins of the leveraged buyout[link]

The first leveraged buyout may have been the purchase by McLean Industries, Inc. of Pan-Atlantic Steamship Company in January 1955 and Waterman Steamship Corporation in May 1955^[43] Under the terms of that transaction, McLean borrowed $42 million and raised an additional $7 million through an issue of preferred stock. When the deal closed, $20 million of Waterman cash and assets were used to retire $20 million of the loan debt.^[44] Similar to the approach employed in the McLean transaction, the use of publicly traded holding companies as investment vehicles to acquire portfolios of investments in corporate assets was a relatively new trend in the 1960s popularized by the likes of Warren Buffett (Berkshire Hathaway) and Victor Posner (DWG Corporation) and later adopted by Nelson Peltz (Triarc), Saul Steinberg (Reliance Insurance) and Gerry Schwartz (Onex Corporation). These investment vehicles would utilize a number of the same tactics and target the same type of companies as more traditional leveraged buyouts and in many ways could be considered a forerunner of the later private equity firms. In fact it is Posner who is often credited with coining the term "leveraged buyout" or "LBO"^[45]

The leveraged buyout boom of the 1980s was conceived by a number of corporate financiers, most notably Jerome Kohlberg, Jr. and later his protégé Henry Kravis. Working for Bear Stearns at the time, Kohlberg and Kravis along with Kravis' cousin George Roberts began a series of what they described as "bootstrap" investments. Many of these companies lacked a viable or attractive exit for their founders as they were too small to be taken public and the founders were reluctant to sell out to competitors and so a sale to a financial buyer could prove attractive. Their acquisition of Orkin Exterminating Company in 1964 is among the first significant leveraged buyout transactions.^[46] In the following years the three Bear Stearns bankers would complete a series of buyouts including Stern Metals (1965), Incom (a division of Rockwood International, 1971), Cobblers Industries (1971), and Boren Clay (1973) as well as Thompson Wire, Eagle Motors and Barrows through their investment in Stern Metals.^[47] By 1976, tensions had built up between Bear Stearns and Kohlberg, Kravis and Roberts leading to their departure and the formation of Kohlberg Kravis Roberts in that year.

Private equity in the 1980s[link]

In January 1982, former United States Secretary of the Treasury William Simon and a group of investors acquired Gibson Greetings, a producer of greeting cards, for $80 million, of which only $1 million was rumored to have been contributed by the investors. By mid-1983, just sixteen months after the original deal, Gibson completed a $290 million IPO and Simon made approximately $66 million.^[48][49]

The success of the Gibson Greetings investment attracted the attention of the wider media to the nascent boom in leveraged buyouts. Between 1979 and 1989, it was estimated that there were over 2,000 leveraged buyouts valued in excess of $250 million^[50]

During the 1980s, constituencies within acquired companies and the media ascribed the "corporate raid" label to many private equity investments, particularly those that featured a hostile takeover of the company, perceived asset stripping, major layoffs or other significant corporate restructuring activities. Among the most notable investors to be labeled corporate raiders in the 1980s included Carl Icahn, Victor Posner, Nelson Peltz, Robert M. Bass, T. Boone Pickens, Harold Clark Simmons, Kirk Kerkorian, Sir James Goldsmith, Saul Steinberg and Asher Edelman. Carl Icahn developed a reputation as a ruthless corporate raider after his hostile takeover of TWA in 1985.^[51][52][53] Many of the corporate raiders were onetime clients of Michael Milken, whose investment banking firm, Drexel Burnham Lambert helped raise blind pools of capital with which corporate raiders could make a legitimate attempt to take over a company and provided high-yield debt ("junk bonds") financing of the buyouts.

One of the final major buyouts of the 1980s proved to be its most ambitious and marked both a high water mark and a sign of the beginning of the end of the boom that had begun nearly a decade earlier. In 1989, KKR (Kohlberg Kravis Roberts) closed in on a $31.1 billion takeover of RJR Nabisco. It was, at that time and for over 17 years, the largest leverage buyout in history. The event was chronicled in the book (and later the movie), Barbarians at the Gate: The Fall of RJR Nabisco. KKR would eventually prevail in acquiring RJR Nabisco at $109 per share, marking a dramatic increase from the original announcement that Shearson Lehman Hutton would take RJR Nabisco private at $75 per share. A fierce series of negotiations and horse-trading ensued which pitted KKR against Shearson and later Forstmann Little & Co. Many of the major banking players of the day, including Morgan Stanley, Goldman Sachs, Salomon Brothers, and Merrill Lynch were actively involved in advising and financing the parties. After Shearson's original bid, KKR quickly introduced a tender offer to obtain RJR Nabisco for $90 per share—a price that enabled it to proceed without the approval of RJR Nabisco's management. RJR's management team, working with Shearson and Salomon Brothers, submitted a bid of $112, a figure they felt certain would enable them to outflank any response by Kravis's team. KKR's final bid of $109, while a lower dollar figure, was ultimately accepted by the board of directors of RJR Nabisco.^[54] At $31.1 billion of transaction value, RJR Nabisco was by far the largest leveraged buyouts in history. In 2006 and 2007, a number of leveraged buyout transactions were completed that for the first time surpassed the RJR Nabisco leveraged buyout in terms of nominal purchase price. However, adjusted for inflation, none of the leveraged buyouts of the 2006–2007 period would surpass RJR Nabisco. By the end of the 1980s the excesses of the buyout market were beginning to show, with the bankruptcy of several large buyouts including Robert Campeau's 1988 buyout of Federated Department Stores, the 1986 buyout of the Revco drug stores, Walter Industries, FEB Trucking and Eaton Leonard. Additionally, the RJR Nabisco deal was showing signs of strain, leading to a recapitalization in 1990 that involved the contribution of $1.7 billion of new equity from KKR.^[55] In the end, KKR lost $700 million on RJR.^[56]

Drexel reached an agreement with the government in which it pleaded nolo contendere (no contest) to six felonies – three counts of stock parking and three counts of stock manipulation.^[57] It also agreed to pay a fine of $650 million – at the time, the largest fine ever levied under securities laws. Milken left the firm after his own indictment in March 1989.^[58][59] On 13 February 1990 after being advised by United States Secretary of the Treasury Nicholas F. Brady, the U.S. Securities and Exchange Commission (SEC), the New York Stock Exchange and the Federal Reserve, Drexel Burnham Lambert officially filed for Chapter 11 bankruptcy protection.^[58]

Age of the mega-buyout 2005–2007[link]

The combination of decreasing interest rates, loosening lending standards and regulatory changes for publicly traded companies (specifically the Sarbanes-Oxley Act) would set the stage for the largest boom private equity had seen. Marked by the buyout of Dex Media in 2002, large multi-billion dollar U.S. buyouts could once again obtain significant high yield debt financing and larger transactions could be completed. By 2004 and 2005, major buyouts were once again becoming common, including the acquisitions of Toys "R" Us,^[60] The Hertz Corporation,^[61][62] Metro-Goldwyn-Mayer^[63] and SunGard^[64] in 2005.

As 2005 ended and 2006 began, new "largest buyout" records were set and surpassed several times with nine of the top ten buyouts at the end of 2007 having been announced in an 18-month window from the beginning of 2006 through the middle of 2007. In 2006, private equity firms bought 654 U.S. companies for $375 billion, representing 18 times the level of transactions closed in 2003.^[65] Additionally, U.S. based private equity firms raised $215.4 billion in investor commitments to 322 funds, surpassing the previous record set in 2000 by 22% and 33% higher than the 2005 fundraising total^[66] The following year, despite the onset of turmoil in the credit markets in the summer, saw yet another record year of fundraising with $302 billion of investor commitments to 415 funds^[67] Among the mega-buyouts completed during the 2006 to 2007 boom were: Equity Office Properties, HCA,^[68] Alliance Boots^[69] and TXU.^[70]

In July 2007, turmoil that had been affecting the mortgage markets, spilled over into the leveraged finance and high-yield debt markets.^[71][72] The markets had been highly robust during the first six months of 2007, with highly issuer friendly developments including PIK and PIK Toggle (interest is "Payable In Kind") and covenant light debt widely available to finance large leveraged buyouts. July and August saw a notable slowdown in issuance levels in the high yield and leveraged loan markets with few issuers accessing the market. Uncertain market conditions led to a significant widening of yield spreads, which coupled with the typical summer slowdown led many companies and investment banks to put their plans to issue debt on hold until the autumn. However, the expected rebound in the market after 1 May 2007 did not materialize, and the lack of market confidence prevented deals from pricing. By the end of September, the full extent of the credit situation became obvious as major lenders including Citigroup and UBS AG announced major writedowns due to credit losses. The leveraged finance markets came to a near standstill.^[73] As 2007 ended and 2008 began, it was clear that lending standards had tightened and the era of "mega-buyouts" had come to an end. Nevertheless, private equity continues to be a large and active asset class and the private equity firms, with hundreds of billions of dollars of committed capital from investors are looking to deploy capital in new and different transactions.

Investments in private equity[link]

Diagram of the structure of a generic private equity fund

Although the capital for private equity originally came from individual investors or corporations, in the 1970s, private equity became an asset class in which various institutional investors allocated capital in the hopes of achieving risk adjusted returns that exceed those possible in the public equity markets. In the 1980s, insurers were major private equity investors. Later, public pension funds and university and other endowments became more significant sources of capital.^[74] For most institutional investors, private equity investments are made as part of a broad asset allocation that includes traditional assets (e.g., public equity and bonds) and other alternative assets (e.g., hedge funds, real estate, commodities).

Most institutional investors do not invest directly in privately held companies, lacking the expertise and resources necessary to structure and monitor the investment. Instead, institutional investors will invest indirectly through a private equity fund. Certain institutional investors have the scale necessary to develop a diversified portfolio of private equity funds themselves, while others will invest through a fund of funds to allow a portfolio more diversified than one a single investor could construct.

Returns on private equity investments are created through one or a combination of three factors that include: debt repayment or cash accumulation through cash flows from operations, operational improvements that increase earnings over the life of the investment and multiple expansion, selling the business for a higher multiple of earnings than was originally paid. A key component of private equity as an asset class for institutional investors is that investments are typically realized after some period of time, which will vary depending on the investment strategy. Private equity investments are typically realized through one of the following avenues:

• an Initial Public Offering (IPO) – shares of the company are offered to the public, typically providing a partial immediate realization to the financial sponsor as well as a public market into which it can later sell additional shares;
• a merger or acquisition – the company is sold for either cash or shares in another company;
• a Recapitalization – cash is distributed to the shareholders (in this case the financial sponsor) and its private equity funds either from cash flow generated by the company or through raising debt or other securities to fund the distribution.

Liquidity in the private equity market[link]

Diagram of a simple secondary market transfer of a limited partnership fund interest. The buyer exchanges a single cash payment to the seller for both the investments in the fund plus any unfunded commitments to the fund.

The private equity secondary market (also often called private equity secondaries) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. Sellers of private equity investments sell not only the investments in the fund but also their remaining unfunded commitments to the funds. By its nature, the private equity asset class is illiquid, intended to be a long-term investment for buy-and-hold investors. For the vast majority of private equity investments, there is no listed public market; however, there is a robust and maturing secondary market available for sellers of private equity assets.

Increasingly, secondaries are considered a distinct asset class with a cash flow profile that is not correlated with other private equity investments. As a result, investors are allocating capital to secondary investments to diversify their private equity programs. Driven by strong demand for private equity exposure, a significant amount of capital has been committed to secondary investments from investors looking to increase and diversify their private equity exposure.

Investors seeking access to private equity have been restricted to investments with structural impediments such as long lock-up periods, lack of transparency, unlimited leverage, concentrated holdings of illiquid securities and high investment minimums.

Secondary transactions can be generally split into two basic categories:

• Sale of Limited Partnership Interests – The most common secondary transaction, this category includes the sale of an investor's interest in a private equity fund or portfolio of interests in various funds through the transfer of the investor's limited partnership interest in the fund(s). Nearly all types of private equity funds (e.g., including buyout, growth equity, venture capital, mezzanine, distressed and real estate) can be sold in the secondary market. The transfer of the limited partnership interest typically will allow the investor to receive some liquidity for the funded investments as well as a release from any remaining unfunded obligations to the fund.

• Sale of Direct Interests – Secondary Directs or Synthetic secondaries, this category refers to the sale of portfolios of direct investments in operating companies, rather than limited partnership interests in investment funds. These portfolios historically have originated from either corporate development programs or large financial institutions.

Private equity firms[link]

According to an updated 2011 ranking created by industry magazine Private Equity International^[75] (published by PEI Media called the PEI 300), the largest private equity firm in the world today is TPG, based on the amount of private equity direct-investment capital raised over a five-year window. As ranked by the PEI 300, the 10 largest private equity firms in the world are:

1. TPG Capital
2. Goldman Sachs Principal Investment Area
3. The Carlyle Group
4. Kohlberg Kravis Roberts
5. The Blackstone Group
6. Apollo Global Management
7. Bain Capital
8. CVC Capital Partners
9. First Reserve Corporation
10. Hellman & Friedman

Because private equity firms are continuously in the process of raising, investing and distributing their private equity funds, capital raised can often be the easiest to measure. Other metrics can include the total value of companies purchased by a firm or an estimate of the size of a firm's active portfolio plus capital available for new investments. As with any list that focuses on size, the list does not provide any indication as to relative investment performance of these funds or managers.

Additionally, Preqin (formerly known as Private Equity Intelligence), an independent data provider, ranks the 25 largest private equity investment managers. Among the larger firms in that ranking were AlpInvest Partners, AXA Private Equity, AIG Investments, Goldman Sachs Private Equity Group and Pantheon Ventures. The European Private Equity and Venture Capital Association ("EVCA") publishes a yearbook which analyses industry trends derived from data disclosed by over 1, 300 European private equity funds. Finally, websites such as AskIvy.net ^[76] provide lists of London-based private equity firms.

Private equity funds[link]

This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (August 2009)

Private equity fundraising refers to the action of private equity firms seeking capital from investors for their funds. Typically an investor will invest in a specific fund managed by a firm, becoming a limited partner in the fund, rather than an investor in the firm itself. As a result, an investor will only benefit from investments made by a firm where the investment is made from the specific fund in which it has invested.

• Fund of funds. These are private equity funds that invest in other private equity funds in order to provide investors with a lower risk product through exposure to a large number of vehicles often of different type and regional focus. Fund of funds accounted for 14% of global commitments made to private equity funds in 2006.

• Individuals with substantial net worth. Substantial net worth is often required of investors by the law, since private equity funds are generally less regulated than ordinary mutual funds. For example in the US, most funds require potential investors to qualify as accredited investors, which requires $1 million of net worth, $200,000 of individual income, or $300,000 of joint income (with spouse) for two documented years and an expectation that such income level will continue.

As fundraising has grown over the past few years, so too has the number of investors in the average fund. In 2004 there were 26 investors in the average private equity fund, this figure has now grown to 42 according to Preqin ltd. (formerly known as Private Equity Intelligence).

The managers of private equity funds will also invest in their own vehicles, typically providing between 1–5% of the overall capital.

Often private equity fund managers will employ the services of external fundraising teams known as placement agents in order to raise capital for their vehicles. The use of placement agents has grown over the past few years, with 40% of funds closed in 2006 employing their services, according to Preqin ltd (formerly known as Private Equity Intelligence). Placement agents will approach potential investors on behalf of the fund manager, and will typically take a fee of around 1% of the commitments that they are able to garner.

The amount of time that a private equity firm spends raising capital varies depending on the level of interest among investors, which is defined by current market conditions and also the track record of previous funds raised by the firm in question. Firms can spend as little as one or two months raising capital when they are able to reach the target that they set for their funds relatively easily, often through gaining commitments from existing investors in their previous funds, or where strong past performance leads to strong levels of investor interest. Other managers may find fundraising taking considerably longer, with managers of less popular fund types (such as US and European venture fund managers in the current climate) finding the fundraising process more tough. It is not unheard of for funds to spend as long as two years on the road seeking capital, although the majority of fund managers will complete fundraising within nine months to fifteen months.

Once a fund has reached its fundraising target, it will have a final close. After this point it is not normally possible for new investors to invest in the fund, unless they were to purchase an interest in the fund on the secondary market.

Size of the industry[link]

The state of the industry as of August 2011^[update] is as follows.^[77]

Private equity funds under management totalled $2.4 trillion at the end of 2010. Funds available for investments totalled 40% of overall assets under management or some $1 trillion, a result of high fund raising volumes between 2006 and 2008. It could take another three years to invest the current volume of uninvested capital targeted for buyouts.

Nearly $180bn of private equity was invested globally in 2010, up 62% from the previous year but still down 55% on the peak in 2007. Activity in the sector is likely to build on this recovery and top $200bn in 2011 as investor sentiment continues to improve. The average cost of debt financing was still well up on pre-crisis levels, while leverage is down and private equity firms are contributing a bigger proportion of equity into their deals.

Exit activity totalled $232bn globally in 2010, a three year high. It continued to increase in 2011, to reach an all-time quarterly record of $120bn in Q2 as fund managers took advantage of relatively robust financial markets to exit investments made in years preceding the credit crisis.

The three years up to 2009 saw an unprecedented amount of fundraising activity, more than $1.4 trillion being raised. However the subsequent economic slowdown took a heavy toll, and the fundraising environment remained depressed afterwards, with only some $150bn in new funds raised in 2010, slightly up on the total raised in the previous year, but around one-third of annual funds raised in the years preceding the credit crisis. New funds raised in 2011 are likely to increase to around $180bn.

The average time taken for funds to achieve a final close fell to 15.5 months in the first half of 2011, down from over 20 months in the previous year.

Private equity fund performance[link]

Due to limited disclosure, studying the returns to private equity is relatively difficult. Unlike mutual funds, private equity funds need not disclose performance data. And, as they invest in private companies, it is difficult to examine the underlying investments. It is challenging to compare private equity performance to public equity performance, in particular because private equity fund investments are drawn and returned over time as investments are made and subsequently realized.

An oft-cited academic paper (Kaplan and Shoar, 2005)^[78] suggests that the net-of-fees returns to PE funds are roughly comparable to the S&P 500 (or even slightly under). This analysis may actually overstate the returns because it relies on voluntarily reported data and hence suffers from survivorship bias (i.e. funds that fail won't report data). One should also note that these returns are not risk-adjusted. A more recent paper (Harris, Jenkinson and Kaplan, 2012)^[79] found that average buyout fund returns in the U.S. have actually exceeded that of public markets. These findings were supported by earlier work, using a different data set (Robinson and Sensoy, 2011).^[80]

Commentators have argued that a standard methodology is needed to present an accurate picture of performance, to make individual private equity funds comparable and so the asset class as a whole can be matched against public markets and other types of investment. It is also claimed that PE fund managers manipulate data to present themselves as strong performers, which makes it even more essential to standardize the industry.^[81]

Two other findings in Kaplan and Schoar (2005): First, there is considerable variation in performance across PE funds. Second, unlike the mutual fund industry, there appears to be performance persistence in PE funds. That is, PE funds that perform well over one period, tend to also perform well the next period. Persistence is stronger for VC firms than for LBO firms.

The application of the Freedom of Information Act (FOIA) in certain states in the United States has made certain performance data more readily available. Specifically, FOIA has required certain public agencies to disclose private equity performance data directly on the their websites.^[82]

In the United Kingdom, the second largest market for private equity, more data has become available since the 2007 publication of the David Walker Guidelines for Disclosure and Transparency in Private Equity.^[83]

Recording private equity[link]

There is a burgeoning debate of the purpose behind private equity, a common misconception to treat private equity separately from foreign direct investment (FDI). The difference is blurred on account of private equity not entering the country through the stock market. Private equity generally flows to unlisted firms and to firms where the percentage of shares is relatively smaller than the promoter or investor held shares (also known as free-floating shares).

The main point of contention behind differentiating private equity from FDI is that FDI is used solely for production whereas in the case of private equity the investor can reclaim their money after a revaluation period and make speculative investments in other financial assets.

Presently, most countries report private equity as a part of FDI.^[84]

See also[link]

• History of private equity and venture capital
• Private investment in public equity
• Publicly traded private equity
• Specialized investment fund

Organizations[link]

• Private Equity Growth Capital Council – advocacy organization for the private equity industry
• Institutional Limited Partners Association – advocacy organization for investors in private equity

Notes[link]

Further reading[link]

• David Stowell (2010). An Introduction to Investment Banks, Hedge Funds, and Private Equity: The New Paradigm. Academic Press. 

• Cendrowski, Harry; Martin, James P.; Petro, Louis W. (2008). Private Equity: History, Governance, and Operations. Hoboken: John Wiley & Sons. ISBN 0-470-17846-9. 

• Davidoff, Steven M. (2009). Gods at War: Shot-gun Takeovers, Government by Deal and the Private Equity Implosion. Hoboken: John Wiley & Sons. ISBN 0-470-43129-6. 

• Maxwell, Ray (2007). Private Equity Funds: A Practical Guide for Investors. New York: John Wiley & Sons. ISBN [[Special:BookSources/0-470-02818-6|0-470-02818-6]]. 

• Leleux, Benoit; Hans van Swaay (2006). Growth at All Costs: Private Equity as Capitalism on Steroids. Basingstoke: Palgrave Macmillan. ISBN 1-4039-8634-7. 

• Fraser-Sampson, Guy (2007). Private Equity as an Asset Class. Hoboken, NJ: John Wiley & Sons. ISBN 0-470-06645-8. 

• Bassi, Iggy; Jeremy Grant (2006). Structuring European Private Equity. London: Euromoney Books. ISBN 1-84374-262-4. 

• Thorsten, Gröne (2005). Private Equity in Germany – Evaluation of the Value Creation Potential for German Mid-Cap Companies. Stuttgart: Ibidem-Verl. ISBN 3-89821-620-9. 

• Rosenbaum, Joshua; Joshua Pearl (2009). Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions. Hoboken, NJ: John Wiley & Sons. ISBN 0-470-44220-4. 

• Lerner, Joshua (2000). Venture Capital and Private Equity: A Casebook. New York: John Wiley & Sons. ISBN 0-471-32286-5. 

• Grabenwarter, Ulrich; Tom Weidig (2005). Exposed to the J Curve: Understanding and Managing Private Equity Fund Investments. London: Euromoney Institutional Investor. ISBN 1-84374-149-0. 

• Loewen, Jacoline (2008). Money Magnet: Attract Investors to Your Business. Canada, Toronto: John Wiley & Sons. ISBN 978-0-470-15575-2. 

• The Financial Page. Private Inequity by James Surowiecki| The New Yorker| 30 January 2012

v t e Topics on private equity and venture capital Basic investment types Buyout Venture Mezzanine Growth Secondaries Equity co-investment History History of private equity and venture capital Early history of private equity Private equity in the 1980s Private equity in the 1990s Private equity in the 2000s Terms and concepts Buyout Financial sponsor Management buyout Divisional buyout Buy–sell agreement Leveraged recapitalization Dividend recapitalization Venture Seed money Startup company Angel investor Venture capital financing Pre-money valuation Post-money valuation Venture round Venture debt Bootstrap funding Structure Private equity firms and funds Limited partnership Limited liability company Carried interest Management fee Publicly traded private equity Business Development Company Venture capital trust Private investment in public equity (PIPE) Pledge fund Investors Corporations Institutional investors Pension funds Insurance companies Fund of funds Endowments Foundations Investment banks Merchant banks Commercial banks High-net-worth individuals Family offices Sovereign wealth funds Related financial terms Undercapitalization Initial public offering (IPO) M&A Leverage High-yield debt Capital structure Capital call EBITDA IRR Envy ratio Private equity and venture capital investors Private equity firms Venture capital firms Angel investors Portfolio companies

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Henry R. Kravis
Henry R. Kravis at the World Economic Forum in 2009
Born	(1944-01-06)January 6, 1944 Tulsa, Oklahoma, U.S.
Residence	New York City, New York, U.S.[1] Palm Beach, Florida, U.S.
Nationality	United States
Alma mater	Claremont McKenna College (B.A.) Columbia Business School (M.B.A.)
Occupation	Founder of Kohlberg Kravis Roberts
Net worth	$3.7 billion (Sept. 2011)[2]
Children	2[3]

Henry R. Kravis (born January 6, 1944) is an American businessman and private equity investor. He is the co-founder of Kohlberg Kravis Roberts & Co., a private equity firm with over $62 billion in assets as of 2011. He has an estimated net worth of $3.7 billion as of September 2011, ranked by Forbes as the 88th richest man in America.^[4] He mainly lives in New York City and has a residence in Palm Beach, Florida.

Early life[link]

Kravis was born in Tulsa, Oklahoma, the son of Bessie (Roberts) and Raymond Kravis, a successful Tulsa oil engineer who had been a business partner of Joseph P. Kennedy. Kravis began his education at the Eaglebrook School, ('60) followed by high school at the Loomis Chaffee School. He then majored in economics at Claremont McKenna College in Claremont, California and graduated in 1967 before going on to Columbia Business School, where he received an MBA degree in 1969.^[5]

Kravis at Bear Stearns[link]

After working at various jobs in New York City's financial sector, he and his first cousin, George R. Roberts, joined the staff of Bear Stearns. Kravis and Roberts share the same grandfather, an immigrant from Russia.^{[citation needed]} There, they worked under the corporate finance manager, Jerome Kohlberg, Jr.. They both became partners at Bear Stearns at a very young age, 30 and 31.

Working for Bear Stearns in the late 1960s and early 1970s, Kravis, alongside Kohlberg and Roberts began a series of what they described as "bootstrap" investments. Kohlberg's acquisition of Orkin Exterminating Company in 1964 is among the first significant leveraged buyout transactions.^[6] In the following years Kohlberg and later Kravis and Roberts would complete a series of buyouts including Stern Metals (1965), Incom (a division of Rockwood International, 1971), Cobblers Industries (1971), and Boren Clay (1973) as well as Thompson Wire, Eagle Motors and Barrows through their investment in Stern Metals. Although they had a number of highly successful investments, the $27 million investment in Cobblers ended in bankruptcy.^[7] Kravis and his associates created a series of limited partnerships to acquire these various corporations, ones they judged were performing well below their sales and profit potential or where there were untapped financial assets that could be monetized. In most cases, Kohlberg Kravis Roberts & Co put up ten percent of the acquisition price from its own funds and borrowed the rest from investors by issuing high-yield bonds.^[8]

Kohlberg Kravis Roberts[link]

By 1976, tensions had built up between Bear Stearns and the trio of Kohlberg, Kravis and Roberts leading to their departure and the formation of Kohlberg Kravis Roberts in that year. Most notably, Bear Stearns executive Cy Lewis had rejected repeated proposals to form a dedicated investment fund within Bear Stearns and Lewis took exception to the amount of time spent on outside activities.^[9]

Early investors in KKR included the Hillman Family and the Griffith family (who are also large shareholders in MGM and Time-Warner)^[10] By 1978, with the revision of the ERISA regulations, the nascent KKR was successful in raising its first institutional fund with approximately $30 million of investor commitments.^[11]

In 1987, Jerome Kohlberg, Jr. resigned from KKR, and Henry Kravis and George Roberts continued to lead the firm. Under Kravis and Roberts the firm was responsible for the 1988 leveraged buyout of RJR Nabisco. At a cost of $31.4 billion,^[12] it was then the highest price ever paid for a commercial enterprise. The publicity surrounding the event led to the story being dramatized in the book and film, Barbarians at the Gate. In early 1995, Kohlberg Kravis Roberts & Co divested its remaining holdings in RJR Nabisco.

The list of companies in which Henry Kravis's KKR has invested over the years includes health care provider Hospital Corporation of America (HCA), TXU,^[13] Playtex, Beatrice Foods,^[14] Safeway,^[15] Duracell, Toys "R" Us,^[16] Borden, First Data^[17] and Regal Entertainment Group.^[18][19]

Personal life[link]

Kravis has been married three times. His first marriage was to Helene Diane Shulman (deceased in 1997). They had three children before their marriage ended in divorce in the early eighties. Their 19-year-old son, Harrison, was killed in an automobile accident in 1991 and he has two remaining children, Robert R. Kravis and Kimberly Kravis Schulhof, both of whom are now in their mid-thirties.

He later married New York designer Carolyne Roehm (born Carolyne Jane Smith) in 1985, but the marriage ended in divorce in 1993.^[20] The home decorated for the couple by Robert Denning and Vincent Fourcade was parodied in the 1990 movie The Bonfire of the Vanities.^[21]

Kravis is currently married to a prominent Canadian economist, Marie-Josée Drouin, and former columnist and TV personality in Canada. She also sits on the boards of the Memorial Sloan-Kettering Cancer Center, the Robin Hood Foundation, and is the president of the Museum of Modern Art board of directors.^[22]

Kravis currently owns homes in New York, NY; Southampton, New York; Palm Beach, Florida; Paris, France; Meeker, CO; and Sharon, CT.^[23]

Henry has one older brother, George R. Kravis, who lives in Tulsa, Oklahoma. George Kravis owned radio station KRAV for a number of years before selling the station.

Politics[link]

A supporter of Republican politics, he was a supporter and fundraiser for President George W. Bush and John McCain. He was also a major contributor to the 1992 re-election campaign of President George H. W. Bush. In 1997, Henry Kravis joined with Lewis Eisenberg to establish the Republican Leadership Council.

Kravis has been subjected to criticism from various liberal campaigns, most notably "War on Greed," which attempts to document his lifestyle in an effort to force legislative changes in relation to the taxation of private equity, specifically the carried interest earned by private equity firms.^[24]

Philanthropy and Public positions[link]

The Henry R. Kravis Prize in Leadership identifies extraordinary leaders in the nonprofit sector, celebrates their accomplishments and shares their best practices with others.^[25] The Prize is presented and administered by Claremont McKenna College (CMC) and Marie-Josée and Henry Kravis. Marie-Josée Kravis, an economist, is a senior fellow of the Hudson Institute. Henry R. Kravis is an alumnus and trustee of Claremont McKenna College. The Prize is affiliated with the Kravis Leadership Institute, a research institute at Claremont McKenna College.^[26]

Established in 2006, the Kravis Prize chooses an annual recipient who has demonstrated bold and visionary leadership within the nonprofit sector. A formal award ceremony celebrates the recipient's accomplishments, and $250,000 is directed to a nonprofit organization designated by the recipient. Collectively, the first five Prize recipients have impacted more than 500 million people in more than 60 countries on five continents.

The 2011 Kravis Prize was awarded to Vicky Colbert and the Escuela Nueva Foundation. Past recipients include Pratham in 2010, Sakena Yacoobi in 2009, F.A.W.E. in 2008, Sir Fazle Hasan Abed in 2007, and Roy Prosterman in 2007

Additionally, Kravis funds the Henry Kravis Leadership Institute that sponsors the Leadership Studies programs at Claremont McKenna College,^[27] and the "Henry Kravis Internships for Teachers of Color" program. He has also financed the construction of extensive facilities at Middlesex School (Kravis House), the Eaglebrook School (Kravis Dorm), Deerfield Academy (Kravis Arena), and The Loomis Chaffee School (Kravis Hall).

He is a benefactor and a past chairman of New York's public television station and sits on the board of the Metropolitan Museum of Art. A Trustee of the Mount Sinai Medical Center, Henry and wife Marie-Josée Kravis donated $15 million to establish the "Center for Cardiovascular Health" as well as funding a Professorship. They have also endowed the chair in Human Oncology at Memorial Sloan-Kettering Cancer Center in New York.

He previously co-chaired with Jerry Speyer the influential Partnership for New York City, founded by David Rockefeller in 1979, and now sits on its board of directors.^[28] He created the New York City Investment Fund, a non-profit organization to create jobs and new business in New York City.

He is a Trustee of the Council on Foreign Relations in New York and is a member of the leading business group, the Business Council. He co-chairs the Columbia Business School Board of Overseers where he recently pledged a gift of $100 million to support the school's new campus project ^[29] and is a vice-chairman of Rockefeller University.

Quotations[link]

• "We've got a portfolio of companies that range all the way from hotels to television stations and cable TV companies, oil and gas, consumer products, and industrial products. If there's anything that I want to know more about, I have the opportunity. It's right in our portfolio. I can spend time at the factory or with the management and learn as much as I want. You can't get bored doing that."
• "A real entrepreneur is somebody who has no safety net underneath him or her."
• "If you don't have integrity, you have nothing. You can't buy it. You can have all the money in the world, but if you are not a moral and ethical person, you really have nothing."

Wealth[link]

With an estimated current^[update] net worth of around $3.9 billion, he is ranked by Forbes as the 281st richest person in the world.^[30] He donated The Kravis dorm to the Loomis Chaffee School, his alma mater, to house freshman boys.

See also[link]

• Kohlberg Kravis Roberts
• History of private equity and venture capital
• Private equity
• Leveraged buyout
• RJR Nabisco

References[link]

1. Henry Kravis profile Forbes 2006 ranking.

External links[link]

• Kohlberg Kravis Roberts & Co. (company website)
• KKR Private Equity Pioneers (from KKR website)
• For TXU, One of the Street’s Fabled Barbarians Is Back in the Hunt February, 2007 New York Times article profiling Kravis.
• Management: Consultants Put Aside Rivalries for New York November, 2001 NYT article on Kravis and the New York City Partnership.
• Forbes.com: Forbes World's Richest People (2005)
• Forbes 400 richest americans (2005)
• ATLAS, RIVA D. "What's An Aging 'Barbarian' To Do?." New York Times, August 26, 2001

New York Magazine article documenting Kravis and Roehm party at Metropolitan Museum of Art

• http://books.google.com/books?id=jegCAAAAMBAJ&lpg=PA20&ots=AFUfxZm045&dq=is%20metropolitan%20museum%20of%20art%20%22patrons%20lounge%22%20worth%20it%3F&pg=PA20#v=onepage&q=&f=false

v t e Private equity and venture capital investors Investment strategy Buyout · Venture · Growth · Mezzanine · Secondaries History History of private equity and venture capital · Early history of private equity · Private equity in the 1980s · Private equity in the 1990s · Private equity in the 2000s Investor types Private equity investors · Venture capitalists · Corporate raiders

Laura Ingraham
Laura Ingraham in October 2011.
Born	Laura Anne Ingraham (1964-06-19) June 19, 1964 (age 48) Glastonbury, Connecticut, U.S.
Residence	Washington, D.C.
Nationality	American
Education	Dartmouth College (A.B., 1984) University of Virginia School of Law (J.D., 1991)
Occupation	Radio personality
Religion	Roman Catholic
Children	Maria Caroline (adopted 2008 from Guatemala) Michael Dmitri Nikolai
Website
lauraingraham.com
Notes [1]

Laura Anne Ingraham (born June 19, 1964) is an American radio host, author, and conservative political commentator. Her nationally syndicated talk show, The Laura Ingraham Show, airs throughout the United States on Talk Radio Network.

Career[link]

Ingraham grew up in a middle-class family in Glastonbury, Connecticut ^[2] and graduated from Glastonbury High School, in 1981.

Ingraham earned a bachelor's degree at Dartmouth College, in 1985, and a Juris Doctor (J.D.) degree at the University of Virginia School of Law, in 1991. As a Dartmouth undergraduate, she was a staff member of the independent conservative newspaper, The Dartmouth Review. In her senior year, she was the newspaper's editor-in-chief,^[3] its first female editor.^[2] She wrote a few controversial articles during her tenure, notably an article alleging racist and unprofessional behavior by a Dartmouth music professor Bill Cole. Cole responded by harassing Ingraham's dormitory roommate and inciting anger against her in one of his classes. Cole later sued Ingraham for $2.4 million; the college paid for his lawyer. He retracted the lawsuit in 1985 without ever naming an inaccuracy in Ingraham's article.^[4]

She also authored a piece characterizing a campus gay rights group as "cheerleaders for latent campus Sodomites". She also secretly tape recorded the organization's meetings, and sent copies to the participants' parents.^[5][6] Jeffrey Hart, the faculty adviser for The Dartmouth Review, described Ingraham as having "the most extreme antihomosexual views imaginable," and noted that "she went so far as to avoid a local eatery where she feared the waiters were homosexual and might touch her silverware or spit on her food, exposing her to AIDS."^[7] In 1997, Ingraham wrote an essay in the Washington Post in which she stated that she changed her views after witnessing "the dignity, fidelity and courage" with which her gay brother Curtis and his late companion coped with AIDS.^[8] Ingraham regrets the "callous rhetoric" of her youth, and now supports some legal protections for homosexuals.^[8]

In the late 1980s, Ingraham worked as a speechwriter in the Ronald Reagan administration for the Domestic Policy advisor. She also briefly served as editor of The Prospect, the magazine issued by Concerned Alumni of Princeton. After law school, in 1991, she served as a law clerk for Judge Ralph K. Winter, Jr., of the U.S. Court of Appeals for the Second Circuit, in New York and subsequently clerked for U.S. Supreme Court Justice Clarence Thomas. She then worked as an attorney at the New York-based law firm Skadden, Arps, Slate, Meagher & Flom.^[9]

In 1996, she and Jay P. Lefkowitz organized the first Dark Ages Weekend in response to the New Year's Renaissance Weekend of the Democrats.^[10]

Ingraham has had two stints as a cable television host. In the late 1990s, she became a CBS commentator and hosted the MSNBC program Watch It! Several years later, Ingraham began openly campaigning for another cable television show on her radio program. She finally got her wish in 2008, when Fox News Channel gave her a three-week trial run for a new show entitled Just In.^[11][12] She appeared on a 1995 cover of The New York Times Magazine for an article about rising young conservatives, in which she joked about subjugating Third World countries.^[13]

She also appeared on the August 3, 2010, episode of The Colbert Report, where Stephen Colbert implied that she had integrated "hideous, hackneyed racial stereotypes" into her book The Obama Diaries. In reply, she suggested that a word Colbert had previously used to label her, banshee, which is of Irish origin (bean sidhe, meaning 'woman of the Sidhe'), also contained racial overtones, suggesting that it may be offensive to Native Americans.^[14] Her latest book is titled Of Thee I Zing and was released on July 12, 2011.

Ingraham suiting up for a VIP flight as a guest of the U.S. Navy at Naval Air Station Oceana in Virginia.

Radio show host[link]

Ingraham launched The Laura Ingraham Show in April 2001, which is heard on 306 stations and on XM Satellite Radio. The show was originally syndicated by Infinity's (now CBS's) Westwood One, but is now syndicated by Talk Radio Network. Ingraham is also the official guest host of The O'Reilly Factor on Fox News Channel and a weekly contributor with her segment, "The Ingraham Angle."

In one of her most famous incidents, on Election Day 2006 Ingraham encouraged listeners to jam the phone line of a toll-free Democratic Party service for reporting voting problems. No tangible consequences came of it.^[2]

In 2012, Laura Ingraham was rated as the No. 5 radio show in America, by Talkers Magazine.^[15]

Books[link]

• The Hillary Trap: Looking for Power in All the Wrong Places, first published June 2000, while the author was a talk show host on MSNBC, was updated and reissued in paperback December 25, 2005. It analyzes and reinterprets Hillary Clinton as a faux feminist,^[16] whose "liberal feminism has created a culture that rewards dependency, encourages fragmentation, undermines families, and celebrates victimhood".^[17]

• Shut Up & Sing: How Elites from Hollywood, Politics, and the UN Are Subverting America, published October 25, 2003, decries liberal "elites" in politics, the media, academia, arts and entertainment, business, and international organizations, on behalf of "disrespected" Middle Americans, whom the author praises as "the kind of people who are the lifeblood of healthy democratic societies".^[18]

• Power to the People, a New York Times number one best seller,^[19][20] published September 11, 2007, focuses on what Ingraham calls the "pornification" of America and stresses the importance of popular participation in culture, promoting conservative values in family life, education and patriotism.^[21]

• The Obama Diaries, a New York Times number one best seller,^[22] published July 13, 2010. The book is a fictional collection of diary entries purportedly made by Barack Obama, which the author uses satirically to criticize Mr. Obama, his family and his administration.^[23]

• Of Thee I Zing, a New York Times best seller,^[24] published July 12, 2011. The book is a collection of humorous anecdotes meant to point out the decline of American culture, from muffin tops to body shots.^[25]

Personal[link]

Ingraham had become estranged from her brother, Curtis, for a number of years, but they reconciled as young adults. On February 23, 1997, she had an op-ed published in the Washington Post where she spoke of her maturing:

"In the ten years since I learned my brother Curtis was gay my views and rhetoric about homosexuality have been tempered, because I have seen him and his companion Richard lead their lives with dignity, fidelity and courage."

She was once engaged to conservative author and fellow Dartmouth alumnus Dinesh D'Souza. She also has dated former New Jersey Democratic Senator Robert Torricelli.^[26] In April 2005, she announced that she was engaged to businessman James V. Reyes, with a wedding planned in May or June 2005. On April 26, 2005, she announced that she had undergone breast cancer surgery. On May 11, 2005, Ingraham told listeners that her engagement to Reyes was canceled, citing issues regarding her diagnosis with breast cancer. Despite the breakup, she maintained that the two remain good friends and had told listeners, in 2006, that she was in good health.^[27]

She is a convert to Catholicism.^[28]

In May 2008, Ingraham adopted a young girl from Guatemala, whom she has named Maria Caroline.^[29] In July 2009 she adopted a 13-month-old boy, Michael Dmitri, and two years later in June 2011 she announced the adoption of her third child, 13-month-old Nikolai Peter. Both of the boys were from Russia, a nation where Ingraham had spent considerable time earlier.^[30]

Activism[link]

Code Red Rally[link]

On December 8, 2009, Ingraham broadcast her support of a rally protesting the 2009 health care reform bill that was to be held in Washington, D.C. at the U.S. Capitol on December 15, 2009.^[31]

See also[link]

conservatism portal

• List of law clerks of the Supreme Court of the United States

References[link]