How much bigger can the Megafunds get?
PE Firms by Direct Investing AUM
Publicly Traded Legacy Megafunds:
- Blackstone - $670 billion
- KKR - $638 billion
- Apollo - $513 billion
- Carlyle - $346 billion
- TPG - $246 billion
New Age Megafunds & Privately Owned Megafunds:
- EQT - $227 billion
- CVC - $202 billion
- Bain Capital - $180 billion
- Thoma Bravo - $138 billion
- Silver Lake - $102 billion
- Vista Equity - $100 billion
- Advent - $89 billion
- Warburg Pincus - $83 billion
- H&F - $80 billion
- Apax - $80 billion
What is the trajectory of these firms going forward? Who is best / worst positioned to continue gaining share in the industry?
Where do you see the growth levers for the asset class overall?
Will continued consolidation occur in the industry, and what does that mean for the hundreds, if not thousands, of LMM and MM funds?
Best place to be an associate (overall MBA placement, HF exits, lateral opportunities):
BX, KKR, Apollo, H&F, TPG
Best place to be a mid-level (promotion visibility, fundraising, fund performance):
EQT, Advent, CD&R, Thoma Bravo
Best place to be a senior partner:
Good luck
Not fair to compare the first group with second, TPG's latest flagship is only around 13b, same as Apax's 12b (a bare step up from their previous fund which was 11b). Also on AUM Vista and SL only been around since 2000 while WP and Apax 1960s. In terms of future idk but would say TB / HF / SL / Advent / CD&R / KKR / BX for tier 1 >=20b, WP / Permira / Vista tier 2 at 15-20b, TPG / Apax / Bain tier 3 at never exceeding 15b
How about CVC
TB is at $177bn
As mentioned earlier, for these funds, PE AUM will still keep chugging along, but growth for the firm as a whole is going to be driven by creating and growing new fund families. For instance, Silver Lake has Waterman (and used to have a MM platform before the Sumeru spinout), TB has Growth, Credit, LMM, and MM teams outside of their flagship fund (Vista is the same but without the Growth team), Apax has the Digital team, and Advent has raised a specific fund just for tech. Also, expanding to new geographies is a great way to create growth for these newer funds (just look at Bain, Carlyle, KKR, etc., and how much AUM they were able to grow from funds in different geos). I don't think some of the truly pure-play players like CD&R or H&F will try and follow this strategy, and will likely instead just keep their firms just PE-focused (I think the move for these guys is to create an evergreen fund model, which H&F did try to do, I believe).
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