CD&R PE

I participated in a VC with their Co-President & Head of Europe in context of their fundraising of Fund XI last year. Just had another look at the deck to refresh my memory.

Pretty impressive shop, they have high and consistent returns (ie less standard deviation across multiple cycles / less reliance on few big outliers to achieve returns) and seem to have managed the tremendous growth of their platform ($6bn fund in 2014, $10bn in 2017, $16bn fund in 2020) and corresponding expansion of headcount and sub-verticals very well. Used to be the H&F of value / old economy investing focused on corporate carve-outs, partnership transactions, complex deal structures (lots of mergers, PIPEs, turnarounds etc), however expanded very successfully into disruptive healthcare models few years ago and most recently into Software.
They basically hired two guys in 2020 (one operating partners / ex software CEO, one TPG / EQT investor) who immediately knocked it out of the park with a $5bn deal in 2020 (Epicor) and $5bn P2P in 2021 (Cloudera - 50/50 with KKR). 

The whole speech was around the firm's DNA being focused on marrying financial with operating expertise (founders were a corporate CEO, a banker and a lawyer). If you look through the website, they have a pretty impressive roster of ex corporate guys (ex-CEO Boeing, ex-CEO Tesco, Chairman BP, Board Member Unilever, and like 20+ others of similar caliber), and those guys are more involved than in other shops (full time partners, part-time advisors, standing IC members etc.) which I suspect is also reflected in the way they interact with their portfolio companies and drive value. Their operating guys definitely take over the Chairman position at every PortCo, even the ones that are only co-controlled (e.g. CD&R Software Op. Partner becoming Chairman of Cloudera post take private, despite being 50/50 investment with KKR).

There is a page on portfolio interaction which talks about monthly operating reviews / board meetings (pretty standard), but also quarterly, semi-annual and annual sessions with a panel of operating guys, as well as best practice sharing across corporate functions between all portfolio companies, purchasing pooling etc.

Bottom line is that I would expect working in their PortCos to be a rather painful exercise, but at least you will be cranking for people that know your business / industry and what they are talking about vs. trying to accommodate random requests from some cookie cutter template shared by a dude that thinks he knows your industry because he did a few expert calls. Don't know how senior you will be in the organization / whether you get any sweet equity, but if so then I would take comfort in knowing that the MIP will probably end up being materially in the money.

On a side note, the session was organized through the platform Moonfare, a German startup which enables semi-professional investors to invest as LP in blue chip PE funds through their feeder entity (effectively a crowd funding to democratize PE investing, with minimum tickets as low as $25k or so.. $100k for CD&R). Highly recommend checking it out, they also offer a fund of funds platform. It adds another layer of fees (think 1% AuM p.a. or so) to the GP fees, but gives access to range of blue chip PE funds as well as e.g. BioTech, VC, Growth, Tech, Secondaries, Infra, Credit etc. People need to go through an accreditation process and then get IR pitch desks every time a fund is in the market...pretty good insights too. Amazed that platform never got mentioned on WSO.

Also amazed I spent my Thursday evening doing this - hoped it helped, maybe I will repeat this for some other shops at some point (have attended plenty of those sessions..) 

Good luck in the new role.