After a stellar LTM is GTCR now an "IRR outlier" and golden boy in the PE UMM space?
What do you think?
"GTCR is on track to return more than $5bn to limited partners in 2024, positioning itself as one of the few private equity firms delivering substantial liquidity amid a subdued exit environment, according to Bloomberg. The wave of distributions is being driven by a series of successful exits, including a two-times return from the $24.25bn carve-out of Worldpay (acquired in 2023). In addition, the completed $13.45bn sale of insurance brokerage AssuredPartners, as well as the $1.3bn exit of insurtech platform itel. These monetisations come at a time when many private equity firms are facing prolonged holding periods due to weak dealmaking and rising interest rates."
They are one of the best in the UMM / large cap space up there with New Mountain, Veritas, Francisco, and Genstar. Very sharp investors but also quite sweaty / sharp elbowed.
Yes. GTCR has a differentiated strategy, smart people, and as mentioned, great returns. There are other firms that are similar, obviously, but GTCR is one of the top investors in the broader middle market and upper middle market deal space.
What about their strategy specifically is differentiated?
Very googleable question. "Leaders Strategy"
TLDR: partner with actual strong managers in a space to acquire a platform and/or company that the manager will operate in a space that the manager in question is an actual expert in. Well-run business + smart capital allocation = successful PE (or really just any) company. They also pay operators very well and, unlike a lot of PE firms, afaik, treat them as actual partners in the portfolio as opposed to just people who are there as vessels to fulfill whatever the PE firm has modelled in their Excel models.
GTCR's recent performance, highlighted by its ability to return over $5 billion to LPs in 2024 through high-profile exits, certainly positions it as a standout in the UMM private equity space. Based on the most helpful WSO content, GTCR has consistently been recognized for its strong returns and solid reputation, particularly in its software group and other verticals. The firm's ability to achieve a two-times return on the $24.25 billion Worldpay carve-out and other significant exits like AssuredPartners and itel demonstrates its operational expertise and strategic acumen.
While the broader PE market faces challenges like prolonged holding periods and rising interest rates, GTCR's success in navigating these headwinds and delivering liquidity to LPs could indeed make it an "IRR outlier" in the current environment. This aligns with previous WSO threads that have praised GTCR for its strong performance and adaptability, even in competitive or challenging market conditions.
Sources: MM PE Firms, PE long-term attractivity: Is the trodden path "broken"? Quo vadis gen Y?, https://www.wallstreetoasis.com/forum/venture-capital/vc-is-a-laughable-shitshow-change-my-mind?customgpt=1, Chicago Private Equity - Help for 1st Year analyst, SoftBank Vision Fund / GIC / Temasek
will they raise a fund XV soon maybe in 2026 or 2027? With last fund being $11B and a lot of it already returned from WorldPay, how big can they go? $15B in-line with New Mountain or LGP or will they want to stay around $10B?
Repellendus nam qui architecto aspernatur sint similique. Ut delectus molestias corporis aut repudiandae dolorem. Nesciunt dicta inventore distinctio quia doloremque.
Dignissimos id tenetur occaecati consequatur placeat accusamus. Dolore commodi qui voluptatem sed et laborum aspernatur et. Id earum quia vel delectus similique sit blanditiis velit. Voluptatibus rem est sunt facilis voluptatum praesentium rerum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...