the tight market. At Fairview Capital Partners Inc., two major clients — New York State Common Retirement Fund and the New York State Teachers’ Retirement Fund — helped boost the Farmington, Connecticut, firm’s capital under management to $850 million from $650 million. As a result, the firm propelled to the No. 1 spot on the BE PRIVATE EQUITY list, supplanting Stamford, Connecticut, TSG Capital Group L.L.C., which now holds the No. 2 position with $740 million in capital under management.
Hartford, Connecticut-based Smith Whiley & Co. raised more than $80 million of the $400 million required for a third fund — a private equity and mezzanine debt fund — from institutional investors in 12 months. As a result, that firm’s capital under management grew to $213 million up from $130 million last year — an increase of 63.8% — catapulting it to the No. 4 slot on the list.
The outlook for 2003 doesn’t look much better. But with toned operations and steely-eyed determination, these BE Financial Services firms will be ready for round two. Ding!
Tracking B.E. Investment Firms
With a greater emphasis on the accounting practices of financial services firms, the BE research and editorial teams — with the assistance of Barge Consulting L.L.C. — conducted additional due diligence on the BE financial services firms. We consulted the Securities and Exchange Commission (SEC) to get an accurate accounting of the filed assets under management from our asset management firms — those that make investments in equities and fixed-income vehicles for institutional and individual investors.
Consequently, our research team received a slew of restatements. In some cases, firms were dropped from our list because they were not registered with the SEC — a criterion for making our list (see eligibility box in “Reinvention Through Innovation,” this issue). As a result of this increased scrutiny, many companies that appeared on previous lists did not make this year’s ranking. Therefore, the number of companies on our asset managers list dropped from 20 to 15.
To show the true leadership of investment banks, which provide underwriting services for institutions and government agencies and engage in transactions involving equity, bond, and asset-backed securities, we ranked firms by senior/co-senior managed issues. Those that did not provide full disclosure of transactions or could not break down their underwriting participation were also excluded from our list. This thorough examination resulted in the elimination of a number of previously listed firms, dropping the count from 15 to 10.
Financial Services Summaries 2001 — 2002
Top 25 Banks
|Number of Employees||2,051||2,055||-0.19|
|Top 10 Insurance Companies||2002||2001||% Change|
|Number of Employees||925||1,066||-13.23|
|Insurance in Force*||30,077.131||31,327.435||-3.99|
|Net Investment Income*||24.991||31.684||-21.12|
|Top 10 Private Equity Firms||2002||2001||% Change|
|Number of Employees||87||84||3.57|
|Capital Under Management*||$2,934.500||$2,461.000||19.24|
|Number of Funds||26||