Charlesbank CEO Stepping Down
Surprised there hasn't been a post on this yet given the prominence of the firm.
Anyone there willing to share what happened? Seems pretty abrupt and not something you'd want to do mid-fundraise...
https://www.charlesbank.com/news/charlesbank-announces-next-phase-of-firm-leadership/
Lmao idk what is up with all these Charlesbank posts lately , I mean they’re a fine shop and I’m sure it’s a valuable solid experience, but there are tons of other shops of that tier (though thinking in tiers too much is also not productive).
This stuff happens, you’ll prob continue to see this through the industry as old ppl get old
It doesn't just happen, dude wasn't that old for PE standards. Charlesbank hasn't had a top quartile fund in a very long time and haven't raised a flagship fund since Feb 2021, when everyone was raising funds. They have no real differentiation and the junior partners have nothing to lose kicking out the old guard and trying to right the ship themselves. It's happening across PE with legacy funds, look at Siris or MDP.
Don’t have anything to add other than to say, to put MDP & Audax in the same conversation as Siris is comical. Sure they are meh JAMMBOS with probably mid returns, but they were literally lighting money on fire at Siris and that was pre-AI boom. How they’re still getting people to work there is amazing to me.
Was it a leadership coup similar to MDP a few years ago?
Junior partners at a JAMMBO pushing out old timers who they blame for the funds lack of fundraising (haven't raised flagship fund since 5+ years). This is also why the tech opportunities team spun out. Dying firm who needs a big change to back to better times, therefore this "stepping-down" of the old-school CEO. Tale as old as time.
Edit: To be clear, I not saying Charlesbank is doomed. THL raised a larger fund than their previous one after 5 years. That involved switching focus to "thematic investing", stopping growth investments, and killing their automation fund. I think it can work similarily for Charlesbank, they just have to give the LP base some changes. It is not a zombie fund yet, though both THL and Charlesbank run the risk of being one if they have 1 more bad fund. There is only so many bad funds you can have before changing strategy or leadership stops working.
Why couldn’t the leadership change wait until fund was raised?
Are we reading the same thread? They haven't raised in 5 years, very safe to assume that's not due to a lack of trying given life cycle of a PE fund. It's not a unique problem to them, but there are a lot of similar 2-4bn funds who last raised in 2020 or 2021.
Their returns have been ok but not great for last couple funds. That being said they are fundraising right now and have raised +/-70% of their target, so they aren't dead and have fresh capital to live another day (just because they haven't announced the close, doesn't mean that they haven't raised anything in 5 years).
Him stepping down is shocking though, so I do wonder what the real story is. The head of a firm does not step down in the middle of the fundraise unless he had something personal happen in his life or he was forced out.
This is a good thing. Choe wasn’t terrible but I’ve known Brandon White for a long time and he’s very good. They’ll have to strategically pivot to raise a bigger fund but I think they’ll get there.
Don't know CB's people well enough to comment on the succession. But I am surprised by everyone citing the last fundraise in 2021 as a major red flag when nearly every firm is behind on deployment. It has been difficult to deploy capital 2023-2025 (and even this year). Not a ton of deals in market, ones that do go are pretty crappy and still expect high valuations, and GPs have been scared to make mistakes after purchases made in '21-22 that are likely underperforming. So raising now / into 2027 seems perfectly fine to me.
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