Dream PE firm?
Just for some fun and to learn about diff strategies - if you could work at any PE firm (not including the most obvious ones like BX/KKR) which would it be and why?
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KPS
CD&R
Understand KPS, seems like a super operational heavy strategy but why CD&R?
My edited comment didn't work. But I meant to say early CD&R which was very operationally intensive and had an interesting dynamic. IMO much more fun to work in a PE firm when it was just booting because that's when you would be able to work with the most brilliant founders.
Old article on CD&R that goes into it:
https://hbr.org/1995/05/rehabilitating-the-leveraged-buyout
I know nothing about KPS, what makes them so special? curious
Turnaround gods. Basically never fuck up.
Focus on your college exams kid.
Ha good one!
Platinum Equity
Why?
lol
You have to ask yourself: of firms with meaningful scale, who will win in tomorrow’s market?
1) Transaction focused firms are rarely able to buy at real discounts
2) Working at a buy and build firm that either uses buy and build to buy down the purchase multiple of the initial platform, or actually cobbles small businesses together to create platforms for larger buyers, would be hell
3) Operationally focused firms have less juice to squeeze given every company now has a Harvard MBA to run modern management theory
4) Growth oriented firms must pay extraordinary premiums and the median firm does not have strong returns (categorically, just because you overpaid on entry does not mean someone will overpay on exit); we also have a unique macro environment for growth so I see this as an unproven
What other strategies are there? I know a few, but I’ll be a monkeys uncle before I share them on WSO. These are the PE firms I think are dream PE firms, especially if you can get in at Fund I and get a slice of the pie.
Literally virtually every major firm falls in one of these 4 pillars. Guess they're all wrong and you're brilliant
The fifth kind of firm is run by Associate 2 in PE-LBOs and has an average 1200% annualized return with 3% max drawdown
I would instead suggest a failure to research on your part before an off the cuff answer, as I can think of at least one of the classic MFs doing a #5
Wherever I can maximize my comp:hours ratio
Oh boi, do I got a position for you, unemployment checks:0 hours of work.
Nope, my model says that is #DIV/0!
Seconding KPS.
My own fund
Aermont Capital
Interested in them, can you elaborate?
Think they have very strong guys and a solid track record from a returns perspective.
They raised ~€4bn for a EU dedicated opportunistic RE fund which is pretty un-heard off outside of BX and Brookfield.
Considering how well they are doing they tend to fly a bit under the radar.
Apollo
GS analyst to Apollo associate is the way to go
Yeah if you want to die from an heart attack at 40
As a current PE associate, Clearlake and Veritas are top choices - tons of deal flow, crazy returns, differentiated strategy, growing like weeds.
Evergreen Coast (Elliott) is also pretty interesting
What exactly is Clearlake's strategy?... Feels like a fast-growing UMM firm that basically does MM deals and has just been more aggressive than most.
They purchase a business (typically using leverage), operate said business for 3-6 years, and then sell the business with the goal of earning a return on their invested capital
Second Veritas.
Veritas numbers are incredible. Culture/lifestyle I’ve heard is quite bad, Apollo-like.
Flip side is if there returns hold up, or even gradually mean revert, there’s still runway to get quite rich.
Excuse my ignorance, but how good are they exactly? I’m not sure how to go about finding that info myself
What are the premier energy/ideal infrastructure PE funds? Any Houston ones?
Stonepeak, BX Infra, KKR Infra, GIP
Interesting thanks. What's the rep amongst the energy players in Houston?
Thoughts on Carlyle and Brookfield infra teams?
These are such new shops in the Infra space with the exception of Stonepeak and GIP
MIRA, Brookfield are definitely top players
advent
I'm at my dream firm but other than that I'd say Veritas or Berkshire Partners
Second time seeing Veritas on here - why?
Same question, why Veritas?
Absolutely killer returns. Not sure if that leads to a favorable junior experience but probably a great learning experience. They've really carved out a nice niche for themselves. Not my cup of tea though.
The one that I, theoretically, own.
Ik you said no BX, but BX Tac Opps seems super interesting
Bx tac opps blows lol
What about Apollo's Hybrid Value fund? Are they considered to be similar to TacOpps in terms of investment criteria?
Tac Opps was way cooler 5 years ago when they were launching the strategy. A lot of the cool / interesting stuff has been spun out (e.g. BXG)
One that shuts down so I have an excuse for quitting early
Permira
why
Sidewalk Infrastructure Partners
I’d second this, I think they’re going to have some really interesting work ahead of themselves.
Underrated answer. This is my dream firm as well.
Lmfao I thought you guys were joking yet this is real company and it’s backed by fucking Google
Audax Group.
I think you really want to aspire to run your own fund working with a couple other founding partners with whom you really enjoy working. To get to that point, it certainly helps to come from a big, brand name shop, but only if you can reasonably attribute the fund's returns to deals you ran from sourcing to exit. Simply working on a deal doesn't give you credit for that deal in the eyes of most LPs. That's why it's rather hard for principals at MFs to break out on their own. They don't really 'own' a track record. They also typically don't have a network among endowment, foundation, pension fund or family office CIOs, so raising institutional money is very difficult. As a result, raising a first fund typically means leveraging their own money, family connections and maybe a few UHNWIs they know.
After that first fund, the only thing that really matters is investment performance. But before you really own a track record of your own, savoring of the track record at the fund where you previously worked can lend you a lot of credibility. That's why someone like Veritas is attractive. If it keeps performing, they'll keep expanding their partnership. Making partner at a fund with massive returns is arguably as attractive as running your own fund. It comes down to carry and whether you'd rather be a big fish in a small pond or vice-versa. There are a lot of aspects of running a fund that have nothing to do with investing. After all, someone has to handle all the operations nonsense that no one enjoys. If you're the managing partner, that's all ultimately on you.
Still, I think running your own fund and being your own boss trumps working for other people almost every time, so my preference is doing just that. However, early in your career, that's not really feasible for most people. In my case, I had a lot of learning and maturing to do (I still do, I suppose), so if I were giving advice to younger guys today, I would suggest that you target the funds where you think you will be able to learn the most. In the end, your knowledge and your network are the only things you can really port from one place to the next.
GTCR because their office is insane
TBH I kinda wanna work in a top secondaries/co-investments firm (ideally GP-led deals focused), relatively good hours, decent returns, good deal flow, good pay up on the ladder
Any specific firms come to mind?
Harbourvest, Lexington Partners, Coller etc.
Starwood Capital.. Barry Sternlicht is the man
Kelso and Harvest for returns + culture mix. Housatonic and GTCR (brutal hours) for learning experience. H&F for deal flow, returns, prestige.
Why Housatonic?
Thoma Bravo and Vista
All things tech
Berkshire Hathaway
Berkshire save the Hathaway
Thoughts on Temasek?
GTCR has always been fascinating to me.
why's that?
In some Asia-Pacific markets, it's not uncommon to see fund managers uses fund's money to invest in their own businesses or businesses that they are a direct/indirect beneficiary.
Of course, they have to mask it thoroughly enough so it cant be traced back, and still follow the fund's mandate. It's just a neat way to make money for yourself while managing other people's money.
Furthermore, fund managers let their subordinates (think VP/Director level and above) have skin in the game as well.
In their defense, employing this strategy not only help the fund managers get rich (since pay structure here is not usually 2/20 and smaller fund size), but it also help them attract talents from MF, even though the comps are not comparable, there are virtually unlimited capital gains.
Silver Lake always looked interesting
My own
Not sure why everyone in this thread wants to work at kalamazoo public schools
Court Square and Jordan company
Ur mom
I'm working at it :p
Insight partners
SKKY Partners
MF: H&F
MM/UMM: GTCR, Veritas
Genstar
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