H&F vs CD&R
Thoughts? Both large cap pure play PE shops. I know comparisons have been done before on these two, but opinions as it pertains to recent culture/comp/fund size/returns?
Thoughts? Both large cap pure play PE shops. I know comparisons have been done before on these two, but opinions as it pertains to recent culture/comp/fund size/returns?
Career Resources
CD&R
C
H&F and it’s not really close
Reality is that H&F is better at what they are doing than CD&R and CD&R is (much) better at their own strategy.
H&F has stellar track record since foundation while CD&R had a choppy patch late 90s / early 2000s but their last 3-4 funds are all >3x MOI and actually better than H&Fs, although H&F has close to 0% loss ratio given focus on overequitized high quality & growth businesses.
CD&R has done a better job diversifying across sectors but H&F has done better at scaling their ticket sizes without meaningful headcount growth; H&F's funds are much more concentrated than CD&Rs.
H&F has benefitted from 15 years of multiple expansion to larger degree than CD&R given sector focus, while CD&R created value through carve-outs, complex structures, mergers & partnerships, operational improvements etc
Both have a bunch of high duration assets across the portfolio, but H&F has bigger liquidity pressure as they struggled with full exits already before the markets shut down (primarily driven by deal sizes significantly limiting the buyer universe at exit, and not all companies are good public candidates assuming you hit the window properly - see Verisure for instance).
CD&R will have the bigger fund by year end (mark my words) but H&F keeps having higher AUM/Head, and hence ultimately better economics.
Associate experience at H&F is incredibly intense, I know that their London office had 1 promotion over the past ~5 years (corresponds to >20 associates) and that's the office where the CEO sits.. associate experience at CD&R is a bit more team dependant, Industrials vs Software in NYC might as well be a different firm.
Bottom line is that it's a pointless debate, bit like comparing Messi with Kobe..