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Illinois is the headquarters for more than 100 private equity firms that manage funds totaling $77 billion, of which $65 billion is directly invested in companies and $12 billion is managed by funds-of-funds, which invest directly in private equity firms. Of the directly invested funds, $8 billion is venture capital and $57 billion is other private equity.
Over the past twenty years, private equity investment generated average annual returns of 13.7%. According to that rate, Illinois-based funds produce an estimated $6 billion in average annual returns to investors. These investors are primarily pensions, universities, and foundations, which reveals the vital role private equity plays in providing income for retirement, higher education, research, and charitable giving.
Private equity firms are large supporters of Illinois’ professional services sector, including legal, accounting, and consulting services. Based on an IVCA member survey, Illinois private equity firms pay service providers an annual average of about $1.7 million each, or $168 million in yearly total revenue.
The preceding numbers exclude private equity firms headquartered or with funds managed outside of Illinois. IVCA estimates that another 200 private equity firms operate in Illinois, including branches of out-of-state firms and firms that serve as advisors or brokers for funds that they do not manage.