Hard to suss out how Charlesbank has been doing by look at their fundraising trajectory. Obviously pretty strong start before and through the early part of the pandemic, even if their ~$4 billion flagship close wasn't a huge step up from the previous fund. Looks like they've shifted to a many-funds strategy with credit and tech which, about the size of fund that we start to see doing that.
But obviously tech performance has been highly variable since 2022 and I'm not sure how Charlesbank's bets have shaken out. Also, it's one thing to add on a tech vehicle, but it's another to have a bunch of ~$1bn-ish funds that apparently have subsumed flagship fundraising in recent years at about the point you'd expect to begin hearing whispers about their target size, preliminary interest, etc.
So basically, how are they doing and what's their outlook like in the tech / Boston / MM world?
All anecdotal / am at a competitor fund so take with a grain of salt, but here’s my view.
They’re at a tricky size where they’re bigger / better brand than the typical MM fund but aren’t quite in the UMM camp, and it can be tough to grow further and it’s at the point where LPs challenge a lot of further fund growth at that size because it is a potentially different ballgame ($2B -> $4B still pretty clearly middle market, but to double to $8B is an entirely different world in PE landscape).
The tech fund was doing really well a few years back and I think they tried to follow the Bain playbook of growing AUM with targeted strategies rather than clawing to grow the flagship, and senior leadership is getting paid on it either way so they’d rather do the path of least resistance.
As an associate, i would argue you’re better off somewhere with a core flagship strategy and nothing else since the associate on the $1B tech fund is going to be very different than the associate on a $6B flagship, even if AUM is the same.
I also haven’t heard any fundraising rumors which is surprising given timing of last raise
What’s the difference between the associate (experience) on 1B tech fund vs 6B flagship
Everything lol. With a $6B fund, the opportunities you have to deploy capital into are of a completely different profile. Assuming you’re doing 12 deals per fund, which is on the higher side, that’s ~$500m deployed per deal, not including co-invest and other funding sources. Which means, these are typically larger, sophisticated businesses in more mature industries, with polished management teams, data controls, etc. Due diligence and portfolio operations are different. If pReStIgE is important to you, larger fund = more prestigious public and private opportunities in the future, as you’d be akin to working on larger transactions and businesses of a certain scale.
Del
Citibank
Bump
Del
this is not true lol
Del
Bumping given the Eterna spin-off: which fund would you rather be at, the legacy PE or the new tech?
Charlesbank is a middle-of-the-pack JAMMBO. Ok returns but would be hard to see the fund differentiated in the next 10 years
Not sure why Eterna spun off. Also does not have a competitive moat against the endless of firms that do bootstrapped growth in Boston like Cove Hill, Summit, TA, PSG, BCTO, Battery etc.
Does Cove Hill do deals? Feels like they and BayPine have incredibly high hype-to-deal-activity ratios. I'd feel like it'd be more fun being at a BVIP if you're going to be in Boston tbh.
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