2025 up and coming funds

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Reality is PE is a rat race and you need to focus on experience. With 1-2 years as a banking analyst after you sign your offer and 3-4 years as an associate the path to VP at the time of signing is foggy. Focus on getting deal reps and not going to bloated fund where 3rd year is an option and reassess after  1-2 years at the fund

Sounds like your goal is to maximize long-term promotion runway / risk-adjusted comp by staying in PE, with no interest in b-school or HFs. If so, the sweet spot to start your career is at a platform that's balanced between:

(1) Career-track / doesn't push you out after 2 years

(2) Has strong track-record across multiple decades and fund vintages; deep, defensible LP relationships

(3) Scaled and offers large-cap experience, but has runway for continued fund size growth

Very few PE associate roles satisfy all 3 of the above criteria at the same time, but they do exist and are extremely competitive - would look at select firms in the $8-12bn latest fund size. Firms with a $8bn latest fund don't meet criteria (3) and sometimes (2), while firms with >$12bn rarely meet criteria (1) and sometimes (3). 

Below is a comment from a recent thread that gives a pretty helpful framework - notice that some of the $8-12bn fund size firms (GTCR, Veritas, Nordic Capital, Hg Capital) listed are actually better positioned to grow than the smaller players.

Extremely rare to find a career-track role at a scaled player these days, but they definitely exist. Below are a few very distinctive buckets of firms, in order of overall attractiveness of an associate role. Notice that fund size and promotion runway isn't always a linear correlation: some of the larger UMMs in the $8-12Bn latest fund size range have actually greater chances of promotion than the smaller MM PE firms in the $2-5Bn fund size range.

• Large UMMs ($8-12Bn latest fund): GTCR, Hg Capital, Nordic Capital, Veritas

Note that none of the above funds are "new" by any means as they were all founded 30+ years ago, so they all have lived through many market scenarios, are cycle-tested and trusted by LPs even in the current environment. However, they've had a lot of success as of late when it comes to scaling fund sizes, and still have a ton of room for growth. Have heard that GTCR and Veritas usually push associates out after 2 years though, so maybe not good examples at the associate level. Hg and Nordic Capital are on missions to further expand their US presence, which when compounded with growing fund sizes should mean plenty of promotion upside for associates.

• Smaller UMMs ($5-8Bn fund): Berkshire, THLee, Ares, L Catterton

Fund size growth for many of these smaller UMMs have stagnated, and growth runway is limited compared to the above bucket due to (1) less scalable strategies (2) less differentiation (3) less stellar returns. As such, associate roles at these places are usually 2 years and out.

On the scalability of strategies point, one key aspect that differentiates the larger UMMs bucket from the smaller UMMs is the track-record and ability to play in the mega-cap space ($5Bn+ TEV deals). Similar to the names in the bucket below (MM PE), these smaller UMMs have likely missed the window of achieving fund size escape velocity, and won't have the ability to grow upmarket like the firms in the first bucket.

• MM PE ($2-5Bn fund): Lindsay Goldberg, Centerbridge, AEA, Kohlberg, Cerberus, WCAS, GI Partners, Audax, HIG

Mixed bag here with some historically "reputable" firms having outdated perceptions - e.g. the likes of Centerbridge and Cerberus struggling with fundraising and declining fund sizes. Similarly, have heard of multiple underperforming portcos under GI Partners and WCAS, with GI struggling to fundraise recently. WCAS's fund size trajectory has stalled / declined since their 1998 fund vintage (inflation-adjusted) due to inconsistent returns; their 2022 fund is marked at a -9.9% IRR though might be a bit early to tell. Audax and HIG have grown but the strategy of buying a high volume of small companies might not scale well, so fund sizes might stagnate going forward.

• Dying funds / former UMMs: American Securities, Providence Equity, Clearlake, BC Partners, MDP
   

Nothing much to say here as many on this forum are probably well-aware, avoid at all costs. 

Why is everyone still so negative on Clearlake? I see it everywhere. Can someone expand a little bit more