Differences between traditional MFs (KKR, BX etc.) vs large operational funds (BainCap, H&F, Advent etc.)
Hi guys,
I am trying to better understand the practical differences between working at one of the traditional MFs favoring people with finance backgrounds (KKR, Blackstone, Apollo, Carlyle etc.) versus the large but more operationally focused firms which also take consultants (BainCap, H&F, Advent etc.) . To be specific, I am primarily interested in the large funds within the second category, not LMM/MM funds. Further, I am only interested in the traditional corporate buyout funds, as opposed to e.g. real-estate, distressed, growth equity etc.
More specifically, I am interested in the following from the perspective of an associate in the investment team:
Split of work by type (deal screening, running the deal process, working with portcos etc.)
How the investment style of the fund is reflected in analysing deals (e.g. associates in operational funds spending more time understanding the industry dynamic & opportunities for additional value creation through operational improvements vs associates in “traditional MFs” focusing on potential financial engineering?)
Role of associates (and seniors) in supporting the portfolio companies (limited vs highly involved, focus on supporting in M&A / financing vs broader set of responsibilities)
Culture and personalities at the funds (banking 2.0 vs “softer” consulting culture)
Lifestyle (hours, flexibility etc.)
Exits after associate years
I know all of this is highly fund dependent and there are significant differences between e.g. BX and KKR, but I am looking for general insights. Ideally would like to hear from someone who has worked at both, but any insights are greatly appreciated!
For additional context, I have talked with a number of associates at some of the operationally focused funds and gotten an impression that the actual operational involvement is relatively limited beyond the initial setting of strategy / screening executives / helping on finance focused tasks (M&A, financing). Hence, I am trying to better understand what actually sets these two types of funds apart.
Thanks!
You're right about Bain Cap and their consultancy culture. Don't think many other companies share it though; they're extremely unique and hard to replicate.
Bump
Bump, also curious to know... hard to distinguish between these top MFs.
Heard BainCap is 60-65 hours usually, never more than 75.
No wonder their returns have nose dived
You are wrong about H&F, as they are not operationally involved at all. An associate there described their investing style almost like a concentrated long-only HF. Just because they hire consultants doesn’t mean they automatically have an operational focus.
Completely agree based on chats with couple of formers. I think H&F indexes very heavily on trying to understand the industry dynamics and trying to get high conviction around the business quality, which is crucial given their concentrated portfolio.
...isn't that exactly what every PE firm claims to do? are you saying H&F is particularly roll-up rather than deep value?
bump
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