Top States & Districts for Private Equity Investment

2020

Data provided by 2020 was a challenging year for the economy. For As President and CEO of The American Investment A message from private equity firms, the first half of the year involved Council, it’s a privilege to represent this industry, thousands of phone calls and Zoom meetings to make especially in times such as these. Private equity sure their portfolio companies had the resources they helped save countless jobs and hundreds of AIC president needed to cushion the blow delivered by COVID-19. companies in the biggest Black Swan event since the In addition to providing hundreds of millions of dollars 2008 financial crisis. After shielding its current portfolio Drew Maloney of equity to struggling companies, private equity companies, the industry set out to revive hundreds of firms also set up employee assistance funds for their others, not only giving them a chance to survive, but to portfolio companies, and many firms hired health care grow once our economy comes roaring back. experts and CDC officials to advise their companies on best practices. Private equity once again proved its resiliency in uncertain times.

The second half of the year saw a resurgence of investment, and despite the turmoil, private equity had its most active year ever. Private equity investments eclipsed 5,000 deals last year, totaling more than $650 Drew Maloney billion in capital invested. Many of those investments President and CEO were rescue capital—restaurant chains and hair The American Investment Council salons bought out of bankruptcy, or public companies such as Airbnb and Expedia receiving much-needed Contents capital to ride out the storm.

Investments 3-11

Case study: Confie Seguros 12-13

Sector highlights 14-24

Appendix 25

Methodology & notes 26

2 Investments

3 Top 20 states receiving private equity investment in 2020

$11.1 $12.6

$16.8 $41.5 $32.5 $36.4

$18.4 $30.6 $20.3 $17.9 $13.5 $12.1

$17.5 $86.5 $10.3 $14.4 $11.6

$23.9

$60.4

$59.4

4 State $B in PE

California $86.5 Private equity investment by state Texas $60.4 Florida $59.4 California tops the list of states receiving the most private New York $41.5 equity investment Massachusetts $36.7

Colorado $32.5

Illinois $30.6

Georgia $23.9

Ohio $20.3

Pennsylvania $18.4

New Jersey $17.9

Virginia $17.5

Michigan $16.8

North Carolina $14.4

Utah $13.5

Minnesota $12.6

Maryland $12.1

Arizona $11.6

Washington $11.1

Tennessee $10.3

Source: PitchBook *As of December 31, 2020 5 698 Top states 700 by number of 600 companies 500 receiving 500

400 investment 363 331 300 California, Texas, and 236 197 Florida lead the nation with 200 195 187 187 168 160 152 the number of companies 138 126 114 105 105 104 97 receiving private equity 100 93 investment

0 Ohio Texas Illinois Florida Indiana Virginia Arizona Georgia Maryland Michigan California Colorado New York Minnesota Tennessee New Jersey Washington Pennsylvania North Carolina Massachusetts Source: PitchBook *As of December 31, 2020

6 Rank Representative State $B in PE Rank Representative State $B in PE

Rep. Joe Private equity 1 CO-2 $16.87 11 Rep. Ro Khanna CA-17 $7.24 Neguse investment by Rep. Stephen 2 MA-8 $16.83 12 Rep. Ted Lieu CA-33 $7.07 congressional Lynch Rep. Carolyn Rep. Jennifer 3 NY-12 $15.19 13 VA-10 $6.45 district Maloney Wexton

Rep. Nancy Rep. Barry 4 CA-12 $15.03 14 GA-11 $6.05 Spanning 11 states across Pelosi Loudermilk the country, the top 20 Rep. Debbie Rep. Carolyn 5 Wasserman FL-23 $12.15 15 GA-7 $5.86 congressional districts in Bourdeaux Schultz 2020 all saw at least $5 Rep. Danny Rep. Beth Van 6 IL-7 $10.40 16 TX-24 $5.66 billion of private equity Davis Duyne capital infused into their Rep. Charlie Rep. Dave 7 FL-13 $10.35 17 OH-14 $5.49 districts. Crist Joyce

Rep. Katherine 8 Rep. Chip Roy TX-21 $8.72 18 MA-5 $5.38 Clark

Rep. Lucy 9 Rep. John Curtis UT-3 $8.56 19 GA-6 $5.19 McBath

Rep. Diana Rep. Tony 10 CO-1 $7.38 20 TX-23 $5.02 DeGette Gonzalez

Source: PitchBook *As of December 31, 2020 7 Top districts 120 by number of 109 companies 100 receiving 80 investment 70 60 60 53 New York’s 12th District saw more than 100 44 44 43 40 37 37 37 local companies receive 36 36 36 35 34 32 32 31 30 30 30 30 private equity capital in 2020 20

0 IL-7 TX-7 TX-3 AZ-6 PA-4 CT-4 GA-7 GA-6 CO-1 MA-8 MA-5 MN-3 FL-13 TX-24 NY-12 NY-10 CA-17 CA-18 CA-52 CA-12 CA-45 NC-12

Source: PitchBook *As of December 31, 2020

8 Top industries by private equity 3% 2% investment 9% B2B Business services and IT information technology 34% Health care attracted half of US private 15% equity investment in 2020 B2C Financial services

Energy Materials and resources 18% 19%

Source: PitchBook *As of December 31, 2020

9 # of PE-backed State Top states by total company companies as of 2020 Texas 1,061 inventory California 983 Texas is home to more than 1,000 currently sponsored companies, Florida 530 and California isn’t far behind New York 525 Illinois 484 PE’s intellectual and financial capital are helping grow companies in every sector of the economy and in every state in the union. Pennsylvania 343 Ohio 341

Michigan 298

Georgia 293

Massachusetts 286

Colorado 282

New Jersey 272

North Carolina 242

Minnesota 231

Wisconsin 206

Virginia 192

Tennessee 191 500+ Washington 184 300-500 Arizona 160 150-300 Indiana 150

Source: PitchBook *As of December 31, 2020 10 Rank Representative State # in PE Rank Representative State # in PE

Rep. Carolyn 1 NY-12 201 11 Rep. Van Taylor TX-3 67 Top districts by Maloney

Rep. Beth Van Rep. Stephen total company 2 TX-24 127 12 MA-8 65 inventory Duyne Lynch Rep. Danny Rep. Dean 3 IL-7 110 13 MN-3 64 Davis Phillips New York’s 12th District Rep. Jerry Rep. Dan 4 NY-10 100 14 TX-2 64 has the most companies Nadler Crenshaw currently under private Rep. Diana equity sponsorship 5 CO-1 99 15 Rep. Jim Himes CT4 64 DeGette

Rep. Sheila Rep. Nancy 6 TX-18 77 16 CA-12 62 Jackson Lee Pelosi

Rep. Haley Rep. Lizzie 7 MI-11 77 17 TX-7 60 Stevens Fletcher

Rep. Carolyn 8 Rep. Katie Porter CA-45 73 18 GA-7 60 Bourdeaux

Rep. Lucy 9 GA-6 73 19 Rep. Ted Deutch FL-22 59 McBath

Rep. Raja Rep. Gerry 10 IL-8 71 20 VA-11 59 Krishnamoorthi Connolly

Source: PitchBook *As of December 31, 2020 11 Confie Seguros, a national insurance brokerage that a starting point. The company was renamed Confie Case study: was acquired by Alliant Insurance Services in April Seguros, which means “trust insurance” in Spanish, 2021, began with an accidental insight. In 2006, with an aim to become a national brand in five years. insurance executive Mordy Rothberg found an article Confie Seguros that showed 70% of Hispanic consumers had never Under Genstar, Confie acquired 38 insurance been pitched by a life insurance salesman.10 He also brokerages across nine states. Genstar sold Confie Building a Hispanic-focused noticed that Hispanic consumers preferred to buy to another PE firm, ABRY Partners, in 2012, having insurance in-person and in their own language. Online achieved its five-year plan a year ahead of schedule. insurance company from advertisements from national brokerages weren’t ABRY continued Confie’s acquisitive growth, buying having an impact. After more digging, Rothberg insurance brokerages across 14 more states. ABRY scratch realized that the Hispanic community had a glaring also continued its diversifying insurance platform, lack of insurance options, despite the community’s which now offers auto, motorcycle, homeowners, demographic growth. renters, life, and health insurance across 750 offices.

In 2008, he set out to change that. He partnered In April 2021, Confie was acquired by Alliant, one with another insurance executive, John Addeo, and of the largest brokerages in the US. Confie itself private equity firm Genstar Capital. The goal: to build had become the largest personal lines insurance a national insurance brand with a focus on Hispanic distributor in the country, ranking first in the category consumers and business owners. Genstar invested every year since 2016, according to Insurance $75 million in upfront capital to the team, which bought Journal. • Headquarters located in Huntington a small California brokerage called Westline Corp. as Beach, CA • More than 3,500 employees • Over 750 retail locations across 23 states • Phone and online services across all 50 states

12 Recognizing the problem: Research showed that a first time—walk through the legal ramifications. New Case study: majority of Hispanic consumers weren’t being reached stores were strategically opened around Hispanic by marketing and had a glaring lack of resources grocers and restaurants for maximum visibility and for personal and business insurance. Hispanic ease. Through acquisitive growth, Confie was able to Confie Seguros consumers said they needed a personal touch before reduce overhead costs and become competitive with buying insurance, and they preferred to have those established national brands such as Allstate and State How it happened conversations in their own language. They needed Farm. to understand the details of each policy without misunderstanding the legal terms involved. They When it acquired Confie in 2021, Alliant CEO Tom needed ease of mind, and there were few compelling Corbett said that “Confie and its diverse team of options to turn to. insurance professionals have set the standard for excellence in personal lines insurance and have Finding solutions: With private equity financing, carried the company to the top of the market. We are Confie set out to expand its brick-and-mortar presence excited to be able to further empower them to do what across the country and in every major metropolitan they’ve always done well.”11 In just over a decade, area. Confie acquired local insurance companies that private equity capital and entrepreneurial insights knew their markets, and it emphasized a bilingual helped build Confie from scratch and created the sales staff to help individuals, families, and business first leading Hispanic-focused insurance broker in owners—many of whom were buying insurance for the American history.

13 Sector highlights

14 Private equity helps companies in every sector of the economy

Renewable Health care Energy energy Manufacturing Technology

Environmental Agriculture services Education Restaurants

15 # of PE-backed State Health care companies as of 2020 California 117

Texas 106 Private equity has a long history in the health care that specializes in behavioral health. Advent industry, reshaping companies in every corner of the helped Genoa expand its footprint and serve more Florida 106 sector. From cutting-edge pharmaceutical companies behavioral health patients across the country, but it to the urgent care center down the street, PE capital also implemented a long-term plan to expand into Tennessee 50 is helping to grow hundreds of health care portfolio new markets. That eventually led to the acquisition of companies. a telepsychiatry provider, which helped with staffing New Jersey 48 1 and an influx of demand from patients. Pennsylvania 48 Private equity at work AIC member Advent International acquired Genoa Georgia 47 Healthcare in 2013. Genoa is a pharmacy provider New York 46

Illinois 46

Massachusetts 44

Source: PitchBook *As of December 31, 2020 Notable companies

Hopebridge MainStreet Family Care Indianapolis, IN Birmingham, AL

Vertara Health Altus Infusion Nashville, TN Pearland, TX

16 # of PE-backed State Energy companies as of 2020 Texas 257

California 36 Private equity sponsors hundreds of energy Antero Resources. Built from the ground up, Antero companies in the US, including more than 250 in surveyed several basins, including the Arkoma, Colorado 36 Texas alone. PE expertise is found throughout the Piceance, and Appalachian basins. It began industry, from exploration to production to refining. production in 2012 and became a public company Oklahoma 32 PE is also active in equipment manufacturing, energy a year later. During the ten-year holding period, New York 26 transportation, and storage as well as utilities such as Warburg Pincus helped Antero develop its business electricity and natural gas. plan and enhance its corporate governance. It also Pennsylvania 22 infused Antero with significant capital during the Private equity at work global financial crisis in September 2008.2 Louisiana 21 In 2003, AIC member Warburg Pincus financed a new exploration and production company called New Jersey 14 Massachusetts 12

Illinois 11

Source: PitchBook *As of December 31, 2020 Notable companies

Tallgrass Energy Altera Infrastructure Leawood, KS Louisville, KY

Ridge Runner Resources Northwoods Energy Midland, TX Denver, CO

17 # of PE-backed State Renewable energy companies as of 2020 Texas 54

California 32 Private equity is increasingly active in renewable neighborhood. The combined energy production is energy. Wind turbines, solar farms, hydroelectric enough to power about 1,100 apartments. It’s the New York 21 projects, nuclear power generators, and hydrogen largest rooftop solar array in the United States, and it fuel manufacturers have all benefited from PE capital. tripled the solar capacity for Blackstone properties in Pennsylvania 14 A broad swath of the country has taken in PE dollars, New York City.3 New Jersey 12 from the windy Northeast to the Sunbelt states. Michigan 11 Private equity at work Blackstone, which owns a sprawling complex in North Carolina 10 Stuyvesant, has installed more than 9,000 solar panels across 56 apartment rooftops in the New York Colorado 10 Illinois 10

Florida 9

Connecticut 9 Notable companies Wisconsin 9 Source: PitchBook *As of December 31, 2020

Vivint Solar Safe Harbor Water Power Lehi, UT Conestoga, PA

US Wind TerraForm Power Baltimore, MD New York, NY

18 # of PE-backed State Manufacturing companies as of 2020 California 232

Texas 188 Private equity is synonymous with manufacturing, was acquired by OpenGate Capital in 2016. In a tracing its earliest roots to American manufacturers. little under four years, OpenGate revamped Power Illinois 148 PE firms help expand and streamline companies Partners’ manufacturing footprint, which increased across a wide range of manufactured products, daily unit production rates, and put money behind Michigan 140 including industrial parts, commercial machinery, a product redesign, which helped improve product Ohio 134 construction supplies, plastics, metals and castings, quality and reduce manufacturing costs. They also textiles, steel, paperboard, and furniture. The helped Power Partners make a new product and Wisconsin 119 Midwest is heavily represented every year. made significant improvements to the company’s operations, leading to a three-fold jump in Power Pennsylvania 113 Private equity at work Partners’ EBITDA under OpenGate sponsorship.4 Power Partners, a Georgia-based manufacturer of New York 100 pole- and pad-mounted distribution transformers, Florida 95

Minnesota 86

Source: PitchBook *As of December 31, 2020 Notable companies

Associated Materials American Scaffold Cuyahoga Falls, OH San Diego, CA

Molded Dimensions Sierra Machinery Port Washington, WI Sparks, NV

19 # of PE-backed State Technology companies as of 2020 California 357

Texas 230 Private equity has taken to technology by storm. Typically years, Vista more than doubled Marketo’s value, associated with venture capital, software providers thanks to investments in machine learning and artificial New York 192 and tech manufacturers have benefited from private intelligence and a partnership with Google Cloud. Their equity just as much. PE firms are active investors in product offerings expanded, new technologies were Florida 142 semiconductors, telecommunication providers, IT implemented, and the company changed the way it Massachusetts 125 infrastructure, cloud storage, and cyber security. recruits new talent. Vista “created an environment where you can take risks,” said former Marketo CEO Steve Illinois 109 Private equity at work Lucas.5 Marketo, a popular digital marketing firm, was acquired Virginia 95 by Vista Equity Partners in 2016. In a little over two Colorado 91

Pennsylvania 87

Georgia 85

Source: PitchBook *As of December 31, 2020 Notable companies

Payscale Zayo Group Seattle, WA Boulder, CO

Tech Data Apptio Clearwater, FL Bellevue, WA

20 # of PE-backed State Agriculture companies as of 2020 California 13

Washington 3 Private equity’s experience in agriculture is vast, develops technology-enabled food safety solutions, ranging from cattle farms to fisheries, seed suppliers, thrived under Paine Schwartz ownership. The Colorado 2 irrigation specialists, fertilizer manufacturers, and partnership resulted in better technology, an vineyards. expanded customer base, and access to new Iowa 2 markets. FoodChain ID now has a proprietary Pennsylvania 2 Private equity at work database that tracks more than 100,000 products, Paine Schwartz Partners, an AIC member and surpassing 100,000 regulatory references spanning Florida 2 a sustainable food chain investor, invested in 218 countries and product recalls in 40 different FoodChain ID in late 2016. FoodChain ID, which languages.6 Indiana 2

Kansas 2

Source: PitchBook *As of December 31, 2020

Notable companies

Legacy Farms Spectrum Seed Anaheim, CA Lafayette, IN

Five Rivers Cattle Feeding Midwestern BioAg Johnstown, CO Blue Mounds, WI

21 # of PE-backed State Environmental services companies as of 2020 Texas 34

Illinois 10 Private equity has a deep background with Asset Management had to find a way for local fish environmental services, which range from daily waste to migrate through or around the dam. After several Pennsylvania 9 management services to more specialized cleaning technical problems were solved, Brookfield began companies (radioactive waste, oilfield cleanup, construction on the new Heuvelton Dam fishway, an Florida 8 wastewater solutions, and recycling centers, to innovative fish passage that mimics a natural river Ohio 6 name a few). PE has also helped grow environmental channel. Its efforts were recognized by the National engineering firms and environmental recovery Hydropower Association, which gave Brookfield the New Jersey 6 providers across the country. 2019 Outstanding Stewards of America’s Waters award in the Recreational, Environmental, and California 6 Private equity at work Historical Enhancement category.7 As part of its investment in the Oswegatchie River Washington 6 Hydroelectric Project in upstate New York, Brookfield North Carolina 5

New York 5

Louisiana 5

Source: PitchBook Notable companies *As of December 31, 2020

Advanced Disposal Denali Water Solutions Ponte Vedra Beach, FL Russellville, AR

PSC Environmental Solutions Liberty Tire Recycling Houston, TX Pittsburgh, PA

22 # of PE-backed State Education companies as of 2020 Texas 9

Pennsylvania 8 Private equity is a quiet contributor to the country’s colleges and universities were severely impacted. education system. PE-backed companies provide Cultural Experiences Abroad, the fourth largest California 8 everything from test preparation to language learning study abroad program in the US, took an investment services, study abroad programs, and career from Infinedi Partners in the summer of 2020. The Florida 8 advancement services. They often help students investment allowed CEA to remain afloat until the New York 7 succeed directly, too. PE firms currently sponsor charter market rebounded. The capital was also used to schools, Montessori schools, early childhood education, add significant health and safety resources to the Arizona 6 and online programs for high school dropouts. company’s programs and maintain its university partnerships during a disruptive period.8 New Jersey 5 Private equity at work As the COVID-19 pandemic upended higher Michigan 5 education in 2020, many businesses that cater to Massachusetts 4

Illinois 3

Georgia 3 Notable companies Utah 3 Source: PitchBook *As of December 31, 2020

McGraw-Hill Education Rosetta Stone New York, NY Arlington, VA

The Great Courses Teachers of Tomorrow Chantilly, VA Houston, TX

23 # of PE-backed State Restaurants companies as of 2020 California 25

Texas 20 Private equity has been helping the restaurant Freeman Spogli in 1996. The investment allowed industry to grow for several decades. PE has Popeye’s to temper its debt burden and emerge Florida 20 sponsored national restaurant chains, local out of bankruptcy. Freeman Spogli helped grow sensations, bakeries, coffee shops, sports bars— its operating income by 40% over the next three Georgia 10 even food trucks. years. Many years later, in 2017, Popeye’s was again North Carolina 9 acquired by a private equity firm (3G Capital) and Private equity at work developed a new menu process that included a Illinois 8 Popeye’s Chicken, a New Orleans-style restaurant crispier chicken sandwich. When the new sandwich chain, owes much of its success to private equity. was unveiled, it was so popular that most of Popeye’s Pennsylvania 7 Facing bankruptcy, the company was acquired by stores were sold out for several months.9 New York 7

Colorado 7

Massachusetts 7

Source: PitchBook *As of December 31, 2020 Notable companies

Whataburger Huddle House Austin, TX Atlanta, GA

Checkers & Rally’s Pitfire Pizza Company Tampa, FL Los Angeles, CA

24 Appendix

$B of PE-backed $B of PE-backed $B of PE-backed $B of PE-backed State State State State companies as of 2020 companies as of 2020 companies as of 2020 companies as of 2020 California $86.55 Minnesota $12.56 Kentucky $3.63 Montana $0.76

Texas $60.44 Maryland $12.09 Nevada $3.33 Vermont $0.67

Florida $59.37 Arizona $11.61 Oklahoma $2.58 South Dakota $0.66

New York $41.54 Washington $11.15 Iowa $2.56 West Virginia $0.58

Massachusetts $36.70 Tennessee $10.26 Nebraska $2.51 Puerto Rico $0.41 New Colorado $32.51 Wisconsin $9.71 $2.44 Virgin Islands $0.38 Hampshire Illinois $30.56 Connecticut $7.89 Wyoming $2.18 Hawaii $0.29

Georgia $23.91 Indiana $7.58 Idaho $1.94 North Dakota $0.27 Ohio $20.25 Louisiana $6.66 Source: PitchBook Rhode Island $1.91 *As of December 31, 2020 Pennsylvania $18.44 Oregon $6.51 Note: An additional $4 billion was Arkansas $1.86 invested in US-based companies with unavailable contact information New Jersey $17.91 Missouri $6.44 Maine $1.70 Virginia $17.53 South Carolina $6.05 District of $1.66 Columbia Michigan $16.76 Alaska $5.92 Delaware $1.34 North Carolina $14.41 Kansas $5.51 New Mexico $1.14 Utah $13.53 Alabama $4.09 Mississippi $1.03

25 Methodology Methodology • This analysis of private equity investment in 2020 is • Not all private equity transactions have publicly and notes based on data provided by PitchBook. PitchBook disclosed investment values. For these collects information on private equity investment transactions, PitchBook applies an algorithm to from public sources, surveys, and primary extrapolate the investment values. As a result, research. private equity transactions without publicly disclosed investment values are calculated in • “Company inventory” reflects all current portfolio the total capital invested for each state and companies sponsored by a private equity firm, as congressional district. of December 31, 2020.

Notes

1: “Genoa Healthcare,” Advent International, 2021. 8: “Infinedi Partners Completes Investment in Cultural 2: “Antero Resources,” Warburg Pincus, n.d. Experiences Abroad,” Businesswire, August 10, 2020.

3: “New AIC & PitchBook Report: Private Equity 9: “ICYMI: Popeyes Chicken Sandwich Is Back— Investment in Renewable Energy Rose Four-Fold Another Reason to Thank Private Equity,” American to Nearly $24 Billion in 2020,” American Investment Investment Council, Drew Maloney, November 4, 2019. Council, April 13, 2021. 10: “Storefront Marketer Grows by Acquisition,” 4: “Power Partners Inc.” OpenGate Capital, 2021. Rough Notes, Susan R.A. Honeyman, April 2012. The Confie case study includes several details from Ms. 5: “Spurring Growth and Innovation,” Vista Equity Honeyman’s article. We are grateful for the insights Partners, 2021. the author was able to gather about the company’s development. 6: “Paine Schwartz Partners Announces Sale of FoodChain ID, Completing Successful Investment,” 11: “Alliant Announces Definitive Merger Agreement Cision PR Newswire, December 9, 2020. with Personal Lines Insurance Leader Confie,” Alliant, April 21, 2021. 7: “Brookfield Renewable Constructs Nature-Like

Fishway to Transport Migratory Fish Species,” National 26 Hydropower Association, April 3, 2019. About AIC

The American Investment Council (AIC) is an advocacy and resource organization established to develop and provide information about the private investment industry and its contributions to the long-term growth of the U.S. economy and retirement security of American workers. Member firms of the AIC consist of the country’s leading private equity and growth capital firms united by their successful partnerships with limited partners and American businesses.

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