Boston Private Equity Firms

Berkshire is around 3bn, as well. Don't know if that's bigger than what you wanted. Monitor Clipper, Parthenon and Battery Ventures is there as well.

From what I know, Windjammer is a pretty lean firm - they have offices in MA as well as Newport Beach, CA (I think there are five investment professionals out there). Work culture seems to be quite pleasant, with decent work-life balance. They talk about how they're very research-oriented and diligent in the way they evaluate deals -- seems like even when the credit markets were good, they were pretty deliberate about the pace of deals. On a pre-MBA level, you'll probably work on a couple deals a year -- maybe not the type of place where you'd see a ton of deals, but you'd work pretty closely with the senior professionals and have a chance to get to really get to know the portfolio companies and think about add-on acquisitions. They also invest through a variety of vehicles, and some of the other middle-market players consider them to be more of a debt provider rather than a direct PE competitor given their transactions in recent years, if that makes sense. The firm's been around for a while and people come from solid backgrounds (check out the bios on the website).

Does this help?

GameTheory -- Definitely forgot about Monitor Clipper / Parthenon. Would love insight on these two shops. Berkshire is a bit large for my taste and Battery Ventures I believe is more VC.

WSO -- Thanks for the heads-up!

numi -- I seemed to get that impression from Windjammer as well. They don't seem to have many investment professionals and there definitely aren't many at the junior level. I'm alright with debt financing buy obviously more of a buyout role would suit my experience as I've only really done M&A.

As far as Monitor Clipper goes, word on the street is they're looking to recruit their next associate (that's right, singular) from Monitor- dunno the rationale because apparently they do have a few ex-bankers.

I know a guy who works for MC. He likes it quite a bit, but I've heard some so-so things about the fund and the performance.

As for Battery - they do private equity, growth equity and VC. They hire associates with a sector focus, so I don't think you'd be a generalist between the three. However, they have a sourcing model.

One of my ex-classmates in banking interviewed with Parthenon, all he told me was that he really liked the guys. To be honest, though, he was just using Parthenon as a warm up for his large-cap interviews (which he recieved multiple offers and accepted one).

Polaris Ventures has been involved is some pretty large growth-equity (i.e. Summit/TA) type deals, although they also have a sourcing model.

I know for a fact that there are over 1,100 people employed in VC/PE in Boston (versus ~5k for silicon valley), so I'm sure we still have a lot of companies to cover...

GameTheory -- I checked out Battery and they seem pretty good. I'm really not into the sourcing model so I don't think it would be a great fit for me, but I really enjoy tech and wouldn't mind working in a tech industry vertical at all nor would I mind focusing on one of the three sectors. I appreciate your pointing them out.

Ideating -- It is interesting (and really scary at the same time) that MCP is slowing hiring. Sounds like I may want to bump them down on my list.

VCmonkey -- How are the hours at these places? While I wouldn't initially consider VC, through strange small world circumstances I have a few connections at HarbourVest, Ampersand Ventures, and a couple other Boston based VC firms.

Thanks again guys. This knowledge is quite valuable to me.

Might want to throw in an application at Berkshire. Know the guys there, and they are a pretty awesome team. Would be an amazing place to work!!

Probably not adding a whole bunch to the discussion, but a buddy of mine works with an ex-Audax associate who said working there was worse than banking. I also know a pre-mba there that hates it.

What are the working hours like at Berkshire? It's one of the funds I've been considering for post-MBA.

WallStOasis.com, what's wrong with Heritage Partners? Weren't they one of the bidders for the Boston Herald a few years ago?

DCHockey1,

they might be fine now, but definitely some red flags in the article below. lets just say they have no qualms about throwing people under the bus (and I also have some inside knowledge from a few sources back in 2003-2005).

Passing the buck at Heritage edited by john E. Morris 1107 words 31 March 2006 TheDeal.com English

"I thought that was one of the most egregious examples of throwing your partners under the bus that I've ever seen," says one limited partner.

The investor, who spoke on condition of anonymity, is referring to a March 15 memo from the three general partners of Boston's Heritage Partners Inc. outlining pending write-downs and the planned retirement of one general partner, the second to leave in a year.

Another memo two days later announced the bankruptcy of package consolidator APX Logistics Inc. One source says the APX investment alone will wipe out about $110 million of equity Heritage had invested over 11 years.

According to the first memo, $342 million in gains on portfolio companies has been largely or completely offset by losses on APX and two other portfolio companies, point-of-purchase display maker Diam International and beauty parlor chain PureBeauty Inc., which are expected to be sold or liquidated at a loss this year. Partners were warned to expect big write-downs.

The memo made it clear who was not responsible for the wipeouts.

"Performance diverged dramatically among lead partners," LPs were told, "and the firm did not have the appropriate organizational dynamics to bring the best collective efforts to bear on each portfolio company."

And in case that wasn't clear: "Two of the general partners, Peter Hermann and Mark Jrolf, have led portfolios of investments that have proven to be consistently successful." Since 1999, the release stated, "all of the liquidity returned to our limited partners … has come from investments led by Hermann and Jrolf."

Translation: Those other guys were responsible for those wipeouts.

The unspecified other guys here were co-founder and general partner Michel Reichert, who retired before the last annual limited partners meeting in November, and fellow co-founder and GP Michael Gilligan, who will step down at the end of this year if the portfolio is reduced, as expected.

Hermann denies that he and Jrolf are trying to distance themselves from Gilligan and Reichert, who co-founded the firm with Hermann in 1993 after working together at BancBoston Capital. (Gilligan's name is on the memo along with Hermann and Jrolf's.)

"I'm fully responsible for everything that happened at Heritage because I'm a general partner. I'm very disappointed and embarrassed about how the overall firm has performed," Hermann says.

But, he adds, Heritage's successful investments are "largely concentrated in a couple of hands — Mark Jrolf and myself."

Gilligan says he is proud of the contribution he has made to Heritage.

"It happens that the investments I've worked on have had their share of successes and challenges too."

He declined to elaborate on specific deals, but the firm quoted him in its press release for an add-on acquisition for APX in 2004, suggesting APX was one of his deals.

"Clearly, we ended up taking more money than we had the organizational structure to manage," says Hermann. Indeed, after raising a $150 million fund in 1995, Heritage quickly corralled an additional $380 million in 1997 and then raised an $843 million pool in 1999.

Hermann argues that a "silo approach," with individual general partners overseeing their own investments, and a lack of communication among the GPs was the firm's main problem.

It wasn't all bad news, he stresses. He cites Skilled Healthcare Group Inc., a Foothills Ranch, Calif.-based post-acute-care company the firm sold to Toronto-based private equity firm Onex Corp. for $640 million in October 2005 for a 3 times return after eight years.

(That was all the more remarkable given that Heritage had to put the company into bankruptcy in 2001 because of a lien for a $6.1 million malpractice judgment.)

And there was the $205 million sale of Needham, Mass.-based Bennett Footwear Group LLC to St. Louis' Brown Shoe Co. in March 2005, which Hermann says also generated close to 3 times Heritage's investment after less than two years.

By the end of the third quarter, the firm also expects to exit suburban Boston newspaper publisher Enterprise NewsMedia LLC; Castle Rock Industries Inc., a maker of floor and carpet maintenance equipment; and do-it-yourself supplies distributor AmerTac Holdings Inc., leaving it with just three companies.

"We're going to focus first and foremost on our assets on the ground And getting money back to our LPs," Hermann says. And with the smaller portfolio, the staff will be cut back.

But three outsiders who know the firm and read the March 15 memo were taken aback and see it as buck-passing.

"What's clear to me is they're picking the few good Heritage deals and claiming they're Jrolf-Hermann deals," says one.

"If any LP buys into this, I'm astounded."

But next year the firm hopes to raise a new fund, though smaller than the last two — in the $250 million to $300 million range, Hermann says — to invest in lower-middle-market businesses.

But it may be a hard sell. Asked what Heritage's fundraising prospects are likely to be, one investor says: "I hope they're bleak." — Kelly Holman

Private equity firms took a bath on equipment rental firms earlier in the decade, when construction ground to a halt as the economy slowed.

But sponsors are expected to be major bidders as a cluster of rental companies come on the market (see table), including the biggest: Atlas Copco AB's U.S. construction equipment rental business.

In two cases — NES Rentals Holdings Inc. and Penhall International Corp. — financial sponsors are the sellers and are expected to face other sponsors across the table.

You might think sponsors would be leery of the industry. After all, GTCR Golder Rauner LLC and Brown Brothers Harriman & Co. lost a bundle when NES slipped into chapter 11 in 2003.

And Florida financier Wayne Huizenga, DB Capital Investors LP, Investcorp SA, J.P. Morgan Partners LLC and Sixty Wall Street Fund LP saw more than $200 million of equity evaporate when NationsRent Cos. went bust. (It is also the subject of sale speculation.)

Bain Capital LLC also took a hit in Anthony Crane Rental Holdings LP's 2004 bankruptcy.

But the sector still has its allure, says one banker, because it remains fragmented, with the top 10 companies controlling less than a 25% market share.

And lenders have been more prudent in recent years, he says, so the businesses are much less leveraged than they were in the last business cycle — Lisa Gewirtz

Don't know much personally but I can try to find out some more from friends...

I would focus on whether each firm has a sourcing model or not (and it kind of sucks in my opinion if they do, a lot of that is really pointless cold-calling and trying to convince companies that they actually need money), what types of deals (growth equity vs. buyouts) they do, how big the teams are and what the people are like.

People in particular make a huge difference but it's hard to say anything general without knowing the specific ones at the firm, especially since people switch jobs so frequently.

And again this is not particularly helpful to the discussion but I would stay away from Audax, Summit and TA... Audax because it is a sweatshop from what I've heard (friends work there) and Summit/TA because the sourcing model reigns supreme at those. Bain is also going to be a sweatshop but hey at least there's no sourcing.

I am currently working in Investment Banking. Do you know what the "associate" experience is supposed to be like at Heritage? Will it prepare me for a job at a top PE firm (large scale: KKR, TPG, etc)

Hours are usually 8AM-8PM with weekends far and few between. The model of a sourcing analyst is basically to present 1 investment-worthy idea/lead per week. You are usually expected to make 25 connected calls per week. So it's two factors: (1) your efficiency and (2) how much deal work you have to complete.

The firms that do deal sourcing include:

Sequoia Capital (late stage), TA Associates, Summit Partners, Bessemer Venture Partners (late stage), VantagePoint Venture Partners (late stage), Battery Ventures, Insight Venture Partners, Platinum Equity, Spectrum Equity, Technology Crossover Ventures, Pequot Ventures, Concert Capital Partners, The Carlyle Group, Updata Partners, Polaris Ventures, Menlo Ventures.

Phew, if you can think of any more let me know.

I meant few and far between...sorry...goof on my part.

Carlyle may have true analysts (i.e. straight from undergrad) doing sourcing, but they don't have a sourcing model for their pre-mba associates like TA and Summit do. Add Thoma Cressey to that list. MidOcean used to, but I don't think they do anymore.

Boston PE, perhaps due to its large consulting heritage, is a pretty lifestyle-friendly place to work. Most firms have much much better hours than NYC/SF shops, and the worst (hours-wise, Bain Cap/Audax/THLee) are probably on-par with NYC. They are definitely not sweatshops in the typical Blackstone/KKR sense.

The trade-off with the shops with great hours (Berkshire, Charlesbank,etc.) is that they tend to close very few deals in a year. This may not be great for pre-MBA associate who wants to learn a lot and see every aspect of the deal process. If you want to do middle-market, so no BainCap/ThLee, then you can't go wrong at one of the top 3 or 4 Boston firms with strong brands and no sourcing component.

WhydoIbother, that's an interesting perception you make, and not to challenge it, but I'm wondering how you're making that comparison. THL definitely has a better lifestyle than funds with comparable size, but Audax (a fund of only about a billion dollars) especially I know is worse than banking and definitely on par with KKR and Blackstone (analysts in my class are now at all three). The consulting heritage theory makes sense, but Bain hours are pretty terrible, as well, and both Bain and Audax are ex-consultants. I trace THL's better culture back to alot of their partners (and former partners i.e. JW Childs & Berkshire) being from non-banking backgrounds (mostly investment management - a huge past time for the Boston area).

Also, to address VC Monkey's post above about 1,100 VC/PE professionals, the biotech market in Boston drives alot of the VC in the city - the PE circle is much smaller, I think.

Hmm, I'm not sure that's exactly an accurate description of the working hours of Bain Cap, and I know that's not an accurate description of Audax (former analyst classmate of mine works 90-100 consistently, as well as an associate I know that left recently because he never saw the light of day, even on weekends). You may be right about the emails, though. You do receive quite a bit less emails at night, probably because the partners are content to leave you to crank out your work well into the night without the 10 or 11pm fire drills that their New York, ex-banker counterparts may have. I'm not sure. I can be fairly certain that the Bain guys work well past 9 on a regular basis.

As for the large deal teams and spreading of the hours, I don't think that's true at all. A former pre-mba alum of my current firm is now at KKR, and his major complaint was that his deal teams were huge, and they double staffed alot of the levels (i.e. two pre-mbas per deal team), resulting in less responsibility. Same thing with my friends at Blackstone (which I would argue is more of a function of less deal flow than anything). But remember, larger deal teams may mean less responsibility, but not necessarily less hours (as you have more people to answer to and more people making requests).

Any updates to this thread, more than a year later? What's changed in the Boston PE landscape?

What's so wrong with the source model? Any changes to the private equity scene in Boston the last few years? What's considered the top MM shop

bump

Would like more information on this too--

With headhunters starting to reach out to folks, wanted to see if there's any updates to this Boston PE info. Particularly interested in the more lifestyle-friendly shops mentioned above (Charlesbank, Berkshire, etc.). Are those still considered good lifestyle shops? What are some others that aspiring buyside monkeys should be looking into?

The forums are always more active. Interested in this as well.

Interested in this as well- in particular, which of these Boston firms (if any) are committed to hiring from MBBs/other Consulting firms and don't really consider hiring any of their associate class from the IBD pool of candidates?

Black Jack - Almost all of these firms have the associate profiles available on their websites. Go take a look and you can see exactly where they source their associates.

Black Jack -- go to Charlesbank's website, almost every associate up has been hired out of consulting rather than ibd. Its surprising how little I knew about these guys before checking them out today given their size. I've heard of golden gate, catterton and a coouple others regularly talked about in consulting circles but never knew Charlesbank was so heavily consultant focused.

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interested as well...bumpity bump