Best and worst funds in terms of AuM per associate
Hey guys,
There are a lot of funds who are overhiring these days so keen to find out which funds are legit for proper career development and assuming responsibility early on as opposed to those who hire way too many associates.
Thanks!
Bump
Not sure AUM/head is at all a good metric for career development/responsibility.
Would take a closer look at internal promotions, platforms done per year, fund size divided by check size, recent fundraising success, returns, etc
So which ones would you recommend from that perspective?
Berkshire, GTCR, Advent, Apax, EQT, Bain Cap, TPG, Permira, Genstar, Hg are some names where you'll learn a ton and get good responsibility
Why is platforms done a year an important metric and how does it differ materially from deals per year?
To be honest, I hate these questions given how hard it is to get a PE offer. I know finance people are all about competing, but getting an offer from any respectable MM / UMM / MF is an achievement and you will learn a ton. For your associate stint, just focus on getting a fund where you have the best likelihood of getting to VP then focus on fund performance given as an associate, the burden of fund performance never falls on you. You can always lateral as a VP given the number of openings.
Well that’s the question precisely - which funds are better for a VP promotion? I’ve seen funds that hire hundreds of associates and all of them just can’t possibly make VPs etc
I think focusing on funds where you see a lack of MBAs is a great start given they most likely do not have 2 / 3-and-out policies. Looking at funds such as Apollo, Platinum, etc.
Who's hiring hundreds of associates?
It's a bad metric because the firm's fundamental strategy will influence it more than anything.
For example, if I am a firm buying cream of the crop companies, willing to pay a premium, etc, then naturally I can get away with less people on my team.
If I am like HIG and deploying a large amount of capital into a bunch of small deals, but each deal has higher IRR with some hair, then I need more people.
Really depends on where you sit on spectrum of "pure investor" (like an HF) to operationally focused (KPS, HIG, etc)
Biggest one for me is platform deals/year versus Associate class. Or some proxy of “current investments” / Associate class. You want to be at a place where you can close a platform deal, full stop. So for an HIG or similar, there’s bigger associate classes but they (try to) buy more platforms. For concentrated funds, they typically have fewer Associates.
Obviously some nuance with operational intensity (add-ons, “roll up your sleeves” bs, etc), but if you get a sense that youre *likely* to close a platform over 2 years, then that’s pretty good tbh.
But there’s also an interesting dynamic with where many associates don’t close an investment at highly reputable funds, but you get the perks of being at that reputable fund.
Closing a platform deal is ideal, but it’s hardly necessary. I got better experience doing add-ons as an associate than i did on platforms. People WAY too focused on a platform IMO.
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