Top Private Equity Firms in Chicago
Chicago is home to top private equity firms that support diverse industries, including healthcare, technology, and consumer goods. This article highlights the leading private equity firms in Chicago, their investment strategies, and their impact on business growth.
Chicago, a bustling business hub in the Midwest, is home to some of the top private equity (PE) firms in the United States. These firms invest across a range of industries, from healthcare and technology to consumer goods, supporting the growth and success of companies at all stages. In this article, we’ll explore the leading Chicago-based private equity firms, highlighting their portfolios, investment focuses, and notable contributions.
Chicago Capital Partners
Founded in 2011, Chicago Capital Partners is a private equity firm that primarily makes control investments in lower middle-market companies with $2–10 million of EBITDA. The firm focuses on industries such as business services, consumer products, distribution, food and beverage, and niche manufacturing. Their investment approach emphasizes building long-term business partnerships and creating value over time.
Chicago Capital Partners values relationships and trust formed with business leaders, preferring a longer hold period and collaborative decision-making for the long-term success of each business. Their team comprises founders, former entrepreneurs, operators, and family business owners, bringing a wealth of experience to their investment strategy.
Kinzie Capital Partners
Founded in 2017, Kinzie Capital Partners is a Chicago-based private equity firm that invests in lower middle-market companies within the manufactured products, business services, and consumer industries. The firm targets companies with EBITDA between $3 million and $15 million, aiming to unlock operational efficiencies and create new avenues for growth through technology enhancements and digital transformation.
In May 2023, Kinzie closed its first institutional fund, Kinzie Fund II, with $150 million in total commitments from a wide range of investors, including foundations, endowments, pension funds, and family offices. This fund allows Kinzie to continue expanding its portfolio and team, furthering its mission to create sustainable outcomes by leveraging technology and strong operational focus.
Flexpoint Ford
Founded in 2005, Flexpoint Ford is a private equity firm specializing in investments within the financial services and healthcare sectors. The firm focuses on identifying and partnering with companies that have strong growth potential and are led by experienced management teams. Flexpoint Ford's investment strategy includes providing capital for growth initiatives, recapitalizations, and buyouts.
A notable investment by Flexpoint Ford is its majority stake acquisition in Clearstead Advisors, a Cleveland-based registered investment advisor. This strategic move has enabled Clearstead to expand its assets under management and advisement, positioning it as a leading financial advisory firm.
Flexpoint Ford's approach emphasizes collaboration with management teams to drive operational improvements and strategic growth. The firm's deep industry expertise and commitment to building sustainable businesses make it a sought-after partner for companies looking to scale.
NextGen Growth Partners
Founded in 2016, NextGen Growth Partners (NGP) is a Chicago-based private equity firm that partners with talented entrepreneurs to acquire and build lower middle-market companies across various industries. NGP employs an Entrepreneurship Through Acquisition (ETA) model, collaborating with Entrepreneurs-in-Residence (EIRs) to identify, acquire, and grow businesses.
In August 2024, NGP closed its third fund, NextGen Growth Partners Fund III, LP, at its $165 million hard cap, surpassing its target in a challenging fundraising environment. This fund builds on NGP’s unique approach of partnering with talented entrepreneurs and providing them with the operational and strategic support necessary to grow lower-middle market businesses.
NGP's approach emphasizes hands-on collaboration with management teams to drive operational improvements and strategic growth. The firm's commitment to building sustainable businesses and fostering entrepreneurial talent has positioned it as a trusted partner for companies looking to scale.
GTCR
Founded in 1980, GTCR is one of Chicago’s most established private equity firms, known for its expertise in growth and transformational investments. GTCR invests in industries such as healthcare, financial services, and technology, partnering with skilled management teams to drive growth. Notable investments include Optimal Blue, a digital mortgage marketplace, and Cedar Gate Technologies, a value-based care platform.
GTCR is recognized for its “Leaders Strategy” approach, which involves partnering with experienced leaders in targeted industries to build market-leading companies. By providing both capital and strategic support, GTCR helps its portfolio companies achieve sustainable growth and industry leadership.
Madison Dearborn Partners
Madison Dearborn Partners (MDP), founded in 1992, is one of the largest private equity firms in Chicago. The firm focuses on sectors including healthcare, telecom, business services, and financial services, investing in companies across North America. Notable investments include portfolio companies like National Financial Partners and Things Remembered.
With a focus on long-term growth, Madison Dearborn Partners collaborates closely with management teams to support operational improvements and strategic expansion. The firm’s deep industry expertise and commitment to building sustainable businesses make it a sought-after partner for companies looking to scale.
Thoma Bravo
Thoma Bravo, headquartered in Chicago, is a leading private equity firm specializing in software and technology investments. Established in 1980, the firm has invested in more than 300 software companies, making it one of the most active investors in the technology space. Notable investments include McAfee, SolarWinds, and Ellie Mae.
Thoma Bravo employs a strategy centered around acquiring software companies and implementing operational enhancements to drive growth. The firm’s technology-focused approach has positioned it as a premier partner for software businesses, helping them navigate growth and achieve scalability.
Victory Park Capital
Victory Park Capital (VPC), based in Chicago, is a private equity firm that provides debt and equity financing to middle-market companies. Founded in 2007, VPC invests across a variety of sectors, including financial services, consumer goods, and healthcare. Notable investments include A10 Capital, a real estate lending platform, and Borro, a luxury asset-backed lending company.
Victory Park Capital is known for its flexible investment structure, offering both debt and equity solutions to meet the unique needs of its portfolio companies. The firm’s hands-on approach and financial expertise make it a valuable partner for businesses seeking capital and operational support.
May River Capital
May River Capital, established in 2012 and headquartered in Chicago, Illinois, is a private equity firm specializing in lower middle-market industrial growth companies. The firm focuses on sectors such as advanced manufacturing, engineered products and instrumentation, specialized industrial services, and value-added industrial distribution services.
In July 2023, May River Capital closed its third fund, May River Capital Fund III, LP, at $500 million, surpassing its original target. This fund continues the firm's strategy of investing in high-quality industrial businesses with significant growth potential.
Notable investments include RLE Technologies, a provider of facility environment monitoring and fluid leak detection products, and Boston Centerless, a manufacturer and distributor of precision materials.
Let’s Recap
Chicago is home to several influential private equity investment firms that drive growth across various industries. These firms stand out for their expertise, strategic investments, and commitment to creating long-lasting value.
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Frequently Asked Questions
What are the top private equity firms in Chicago?
Chicago is home to several leading private equity firms that have made significant impacts in various industries. Some of the top private equity firms in Chicago include GTCR, Silver Oak Services Partners, CIVC Partners, New Harbor Capital, and Periscope Equity. These firms are known for their expertise in sectors like business services, healthcare, and technology. Their strategies often focus on middle-market acquisitions and lower middle-market investments.
What is the role of private equity firms in Chicago?
Private equity firms in Chicago play a crucial role in the financial ecosystem by acquiring, managing, and growing companies. They often provide capital to businesses in exchange for equity stakes, which allows them to influence management decisions and operational strategies. The firms focus on value creation, often through strategic initiatives, operational improvements, and leveraging financial resources to enhance performance and growth.
What is the difference between lower-middle-market and middle-market private equity?
The terms lower middle market and middle market refer to the size of the companies that private equity firms target for investments. Lower middle market typically includes companies with revenues between $5 million and $50 million, while middle-market firms target companies with revenues ranging from $50 million to $1 billion. The investment strategies and risk profiles may differ, as lower middle market companies may require more hands-on management and operational expertise to drive growth.
How do private equity firms in Chicago raise capital?
Private equity firms, including Chicago-based private equity firms, raise capital primarily through limited partnerships. They attract investors, known as limited partners, who contribute funds to the private equity investment fund. These funds are then used to acquire portfolio companies. The firms may also utilize leverage to enhance returns, borrowing against the assets of the acquired companies to finance growth and operations.