Evening Monkeys,
Looking for a little color on Capstone headwaters, specifically the LA team. First look had MDs with strong tract records but I haven’t found much else about that. Seem to run pretty lean, decent(?) deal flow.
Looking for someone to hopefully provide insight on comp, exits, quality?
Anything really that’s relevant.
Thanks!
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Considerably below market comp vs. MM/EB/BB (WSO has some good data points). It's a hodge podge of MDs, some good, some terrible, some in between. The firm is far less structured than a MM, meaning the MDs have more autonomy and leeway in terms of how much they bring in, how they operate, where they work (some MDs don't even go into the office), etc.
Apparently has some decent groups (HC services guy seems to be doing well as I acknowledged in another thread), but overall is a notch below Cascadia, D.A. Davidson, etc. which are boutique LMM banks.
Haven't seen anyone from Capstone or Headwaters in PE, but I'm sure there are some, would just be an uphill battle. A few have moved in to Corp Dev or Corp Fin.
Expanding out to Chicago - The MD there does very well with lower MM industrials / tech services coverage.
Had a friend that just summered in the Chicago office who said it was pretty abysmal stuff
So I talked to him and got some more specific insight...
Apparently deal-flow was high but working on below average, hairy mandates. No one bothers doing any modelling during the sale process, they just slap a multiple on it and call it a day. Their internal CRM is absolutely abysmal and to even get one interested counterparty they often have to reach out to 200+ firms. Most of the work there is literally a repetitive grind of entering emails into a CRM. Even when good companies come along my friend said that the shop was absolutely garbage at pitching them to potential buyer (particularly with half-decent sponsors). He said that it wasn't a banking job, think more like working out of a call center where you just build random industry slides, random investment highlights (often times half of it is just a slide on management or some bullshit). He also told me that they work out of a IWG (co-working space) with no windows. Avoid at all costs. BAIL.