Best Mega Fund Financials teams?
I'm at a top FIG group and really enjoy the coverage (thought I'd absolutely hate it coming in) to the extent that I really want to continue to cover financials on the buy-side. I would like to do more balance sheet heavy investing rather than the type of capital light "FIG" (e.g. payment processors, fund administration etc.) that Advent / Cinven do for example.
Apollo appears to be by far the best, with Warburg also seemingly being very good. Are there other names amongst the mega funds? I know the standard FIG names would be places like JCF or Stone Point, but the former has fallen off a cliff and Stone Point doesn't have a London office.
Based on the highest ranked content on WSO, here are some of the top mega funds with strong Financials teams:
Other notable mega funds that are active in the financials sector include:
These funds are recognized for their ability to handle a range of transactions and have significant capital deployment capabilities.
Sources: Working in FIG (Financial Institutions Group) - An Overview., What’s the mega fund cutoff?, Former PE associate's perspective on these "megafunds", Best Investment Banks for FIG (Financial Institutions Group), Why Should I Work in FIG Investment Banking?
Funds that have done really well in financial services that are top mind are Stone Point, Apollo, Warburg, H&F, GTCR, MDP, Genstar and a few others. I’m not sure to what extend they are investing in balance sheet heavy companies though bec there’s a ton of complexity and volatility associated with some of those deals. Would assume it would be more value driven given the risk and M&A heavy to diversify that risk. I think more players in the space do tend to buy the more capital light companies like asset / wealth management, insurance brokers, services, etc. because there’s less of that volatility in underwriting. Probably best to look at who are invested in insurance underwriters since there’s a ton of PE players in that space.
Understand this might not be super helpful but hopefully that can help you out. I think towerbrook might be in London too
Centerbridge does asset-heavy FIG stuff
Depending on whether you’ve had insurance exposure (and liked it), you could explore M&A roles in the asset-intensive life reinsurance space. Would be looking at inforce blocks of life and annuities to acquire for the insurance company’s balance sheet, and depending on firm, maybe some legal entity acquisition. Area’s seeing significant amounts of capital inflows and is a core part of certain alternative asset manager’s credit growth strategies. Firms to consider would be:
Decent list. A few others off the top of my head that have entered insurance: Bain, Brookfield, Blue Owl, Eldridge
Bain’s a bit different from the others as they’re doing all of their insurance investing directly out of a fund, not via a long-term vehicle’s balance sheet. What this means is they aren’t participating in asset intensive reinsurance, but more so looking at sponsored de-mutualizations / insurance services / interesting stuff in P&C.
For the others you listed, here’s some views. Blue Owl’s not yet a real player - they’ve just bought Kuvare’s asset management but haven’t made an entrance into doing actual insurance deals. Brookfield’s spent huge $$ on entering insurance at very lofty valuations, but not clear whether they intend on participating for legacy blocks / doing more US deals / how long it’ll take to recoup their investment. Eldridge’s insurance biz (Security Benefit) is lower rated which has the byproduct of fewer counterparties wanting to deal with you as a buyer. This is an industry where scale/reputation/credit rating really matter for winning deals.
to add onto this:
Aquarian, Prismic (Pru), Everlake (Blackstone), and Knighthead
I believe Bain also has an insurance group, unclear how it performs compared to all these though.
Edit: nvm see above comment
Centerbridge
Any reputable funds that invests in banks? I know PIPE investments aren’t uncommon in the space such as Banc of California ..
When you say banks, do you mean FIG assets which are regulated as banks (but don't necessarily offer retail lending)?
In which case even more capital light focused FIG teams do this. Take H&F for example - Allfunds is regulated as a bank because certain services require it to be licensed, so it adheres to Basel capital requirements.
Cerberus recently did a club deal for a bank as well. Its less common because the deal maths is harder (unless its trading at a huge discount to book).
A few do. WP is one
Incoming analyst at FIG BB looking towards FIG PE. Which verticals position best for FIG MF positions, fintech or insurance?
Insurance opens the most doors IMO. By the time recruiting comes, you will be forgiven for not having done pure EBITDA businesses (it's not normally within one's volition to choose verticals) and its incredibly simple to learn. Banks is that unuseful middle ground, where its not a positive differentiator for FIG PE nor does it helpful with generalist.
If you want to do pure growth, I think possibly FTAM is better.
Interesting, I heard insurance pigeonholes you the most though? Can it also position you for generalist PE? I know brokers are very popular assets, and every fund seems to want/have one…
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