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Based on the most helpful WSO content, here are some notable up-and-coming funds that have been highlighted in recent discussions:
BayPine: Boston-based, founded by a co-founder of Silver Lake and a Blackstone executive. The fund focuses on digitalization and has already been involved in significant deals.
Brightstar: New York-based with offices globally, founded by the executive who built up Lindsay Goldberg. Known for being operationally focused and rapidly growing.
Stellex: A promising fund mentioned for its growth potential.
Cove Hill: Another fund gaining traction, often highlighted for its entrepreneurial feel.
Cornell Capital: On its second or third fund, this fund is more institutionalized but offers room for growth.
Gamut: A spinout fund with strong deal sourcing and faster advancement opportunities.
Searchlight: A fund with a solid reputation and growth trajectory.
BGH: Based in Australia, this fund is also gaining attention.
Nonantum Capital: Boston-based, founded by former Charlesbank professionals, raised a ~$450MM first fund.
Arcline: Frequently mentioned as an interesting early-stage fund.
These funds are often targeted by individuals from top groups like GS TMT, GS FIG, PJT RSSG, and MS Menlo due to their potential for career growth, favorable carry positions, and the opportunity to be part of a growing platform.
Sources: Up and Coming Funds, GS TMT/FIG vs PJT RSSG vs Evercore M&A, BY EASE OF RECRUITING, Best Up-and-coming/MM PE funds, Finding the next Thoma / Vista?, Growing/Rising and Shrinking/Falling Banks
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Joining an upcoming fund is great but very rare. For every GTCR, Genstar there are probably 3-4x the funds that showed promise but are faltering/mediocre performance. At the associate level I still think on a risk-reward basis MF/UMM are the best for the top analysts.
With that being said in order to help facilitate a discussion some strong 'newer' firms that could be interesting (note: not necessarily 'the best') below. I've skipped the strong developed platforms (e.g., Veritas, HIG) as they've been extensively talked about in the past
Kingswood Capital (Fund III $1.5bn): Huge upsizing from initial target ($1bn) and took less than 4 months to close their fund which is impressive given the environment. Special sits, carve-out focus (though have heard from bankers they are tough to deal with). Senior management comes from Ares/Cerberus background so would expect culture to be sharp elbowed but this is just my conjecture
Baypine (Fund I $2.2bn): Started off with a 'bang' with founders coming from Silver Lake/ Blackstone. Still think the jury is out for these guys (although its slowly looking bleak) but surprisingly high turnover on the junior size, culture is sort of mid (friend used to work there) but if you believe/bleed software probably still have tailwinds to ride on here.
Haveli Investments (Fund I $4.5bn): Vista spin-out really sharp people but hours here are tough. They do good deals and expect fund to perform well but know that people have certainly not enjoyed the experience (on the junior side). With that being said probably growing pains but expect them to be a name you'll see more and more in the software side of things competing with Vista/TB
Arcline (Fund III $4.5bn): I've only come across these guys 1-2 times but seems like a strong team and unlike the 10x software/tech companies out there if you want to do industrials this could be an interesting place to play in. Juniors seem to work hard but given the types of deals that they do seems like it could be a good experience
Avoid: Clearlake - Been discussed extensively of course but another shoutout here. Honestly not sure how they're still surviving (maybe its the 10+ continuation vehicles) but something just tells me its a house of cards
I’m not sure I’d work at either Baypine or Arcline.
Arcline has proven themselves very good at spending and raising money and TBD at how good they actually are at making good investments and generating returns. I think they’ve sold like 1 company total? Heard recently they dropped from a process because they didn’t have the equity $ left to do the deal (was a sizable add on for a port co) and LPs didn’t have appetite for new $ given the lack of realizations.
Baypine obviously has great senior pedigrees and raised a lot of $ but my sense is they’re still figuring things out, have done some mediocre deals, and lots of turnover. Not sure how much substance there really is to their tech modernization angle vs what every single other firm is already doing.
Both have grown fund sizes so quickly I have a hard time believing either has much more room to go upwards unless they can put up the returns to justify it.
I don't disagree, to caveat if I were an analyst and had a choice between a LGP/GTCR over any of these shops I'd take the former 10/10 times.
But, as I'm sure those at GTCR, NMC probably made a bet at the time (naively if I had to say) it paid off just trying to list a couple of firms that could potentially provide upward mobility rather than joining KKR/BX which 9/10 associates will get bounced before even hitting director.
I still think both places could be interesting places to start at (especially Baypine) but agree their returns nor their culture (from what I hear) have been 'first quartile' thus far
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.
Why is everyone still so negative on Clearlake? I see it everywhere. Can someone expand a little bit more
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