Private equity industry: Southwest firms draw on regional expertise

Neiman Marcus, Harrah?s, Petco, J. Crew?these well-known names are among the holdings of companies owned or co-owned by private equity (PE) firms in the Federal Reserve?s Eleventh District. The region is home to more than 175 PE firms, including the world?s third-largest, Fort Worth-based TPG Capital.[1] Together, these entities have raised more than $109 billion over the past 10 years and sit on $31 billion pending investment. ; While the PE business model goes back to the times of early seafaring enterprises funded by limited private partners, its modern U.S. iteration dates back to the 1950s and the first venture capital funds. More recently, the industry and its sometimes opaque operations have come under increased regulatory scrutiny amid concern about their riskiness and systemic importance to the financial system. Although detailed data are hard to come by, regionally based PE firms are distinguished from their counterparts nationwide by the sectors they favor.