NAICS code for a private equity firm, fund and holding company

This page is for private equity and venture firms filling in forms that ask for an industry code (bank onboarding, a vendor or data room provider, a tax return, SAM.gov for a portfolio company) and for sellers building lists of PE firms. It sets out which code fits each entity in a typical fund structure.

The NAICS codes for private equity

523940 is new in NAICS 2022: it merges the 2017 codes 523920, Portfolio Management, and 523930, Investment Advice. Older forms and data may still show 523920 for PE firms.

How to choose: one code per entity

A typical buyout structure has a management company, a general partner, one or more fund partnerships, acquisition holding companies and the portfolio companies. Code each by what it does:

Two cross-references settle common arguments. The 551112 definition sends companies that hold shares and also operate the business to "the business operated," so an operating company doesn't become a holding company because a fund owns it. And the 523940 definition puts establishments with authority to make investment decisions in portfolio management, which is what a PE firm's investment team does.

SIC codes for private equity

There's no SIC code named for private equity. Forms usually want 6799, Investors, NEC (whose Census piece covers venture capital companies, investment clubs and speculators for their own account) or 6282, Investment Advice. From the Census concordance:

On EDGAR, the listed PE firms all use 6282. To convert other codes, use the NAICS to SIC converter.

How many firms there are

County Business Patterns (CBP) 2023, establishments with paid employees:

523940 pays about $259,000 per employee (our calculation). It's also much broader than private equity: it includes mutual fund, pension and hedge fund managers and financial planners, and CBP gives no split by type. Funds usually have no staff of their own (the people work at the management company), which helps explain why 525990 shows only 1,652 establishments. In 523910, 10,603 of 12,892 establishments (82.2%) have fewer than five employees.

CBP 2023 uses NAICS 2017, so 523940 here is the sum of 523920 and 523930, and CBP publishes no size split for the combined code.

SBA size standards

PE firms rarely need SBA size status themselves, but their portfolio companies do. From the Table of Size Standards, effective March 17, 2023 (13 CFR 121.201 on the eCFR shows no later change):

The bigger issue is affiliation. Under the SBA's rules (13 CFR 121.103), affiliation comes from control, and businesses under common control count together, so a fund-controlled portfolio company bidding as small may have to include its sister companies. Check this with counsel before a portfolio company certifies.

Where the code is used

• Tax returns. Funds and management companies usually file partnership returns. The Form 1065 activity codes include 523900, Other financial investment activities (including portfolio management and investment advice), 525990, Other financial vehicles (including closed-end investment funds), and 551112, Offices of other holding companies.
• Bank and vendor onboarding. Know-your-customer forms ask for a code per entity, so give the management company 523940 and the fund 525990.
• Portfolio company contracts. The code on a federal contract is the portfolio company's own, measured with affiliates.

Finding private equity firms

The largest listed PE firms file on EDGAR under SIC 6282, Investment Advice:

These are a handful of the firms in 523940. For the rest, the SEC's Investment Adviser Public Disclosure site holds each registered and exempt reporting adviser's Form ADV, which lists the private funds it manages. The largest private equity firms page ranks the biggest. A Bebop search can describe the firms you want (lower middle market PE firms in the Midwest that own home services companies, say) and return the firms and partners with the reason each fits.

Worked example: coding a fund structure

Illustrative example. The firm and companies are invented.

Harborlight Capital (harborlight.example) manages Harborlight Fund II, LP, which owns Coastline Air Holdings, Inc., which in turn owns Coastline Air, an HVAC contractor.

1. Harborlight Capital Management, LLC (the manager) is 523940 and SIC 6282. On its Form 1065 it uses 523900.
2. Harborlight Fund II, LP (the fund) is 525990 and SIC 6726, and 525990 on its Form 1065.
3. Coastline Air Holdings, Inc. only owns Coastline Air's shares, so it's 551112 and SIC 6719.
4. Coastline Air keeps its own code, 238220, Plumbing, Heating, and Air-Conditioning Contractors. If it bids as a small business, the fund's other controlled companies may count as affiliates.

Next step: see the largest private equity firms for who manages the most capital, or the NAICS code for a holding company for holding structures outside PE.