L Catterton vs Roark vs Sycamore Partners vs Other C&R PE Groups
With PE recruiting in full effect, is there any way to see what the difference in mandate are for the various C&R-focused shops. Is there any way to compare them like-for-like? Which would be considered the best / most desirable of the players?
Consumer PE will be dead in 5 years
Care to say more?
I work in Consumer PE for what it's worth so I'm aware of megafunds closing their consumer groups / the difficulty of creating a long-standing competitive edge in certain segments (e.g., beauty, CPG, food), though it's a bit hard to fully appreciate the doomsday predictions. After all, I'm working in a firm that has to justify its existence so it's not like people are screaming about the end of consumer within the industry itself.
Seems like there's still a lot of scaled assets across different segments (e.g., consumer services, franchisors) that do well.
As an addition to the above, I've sort of struggled to explain why consumer would struggle while we're fine about PE overall. Clearly, we're in a harder rate environment for the overall industry, though the typical response I've seen is that valuations will drop to levels that support these current rates.
Similarly with consumer, I would expect that (i) valuations drop for companies until they become more attractive and (ii) consumer-focused shops like the ones quoted for this post will have less competition in processes
Maybe thinking about it too simplistically though
Fun companies but very very very tough place to make money.
out of curiousity. Why is there negative sentiment around C&R?
The three groups mentioned have very different investment styles. For example, many Roark deals arbitrage the ABS market for cheaper capital. Regarding why some people don’t love consumer, I think it comes down to less deals fitting the classic buyout playbook. The growth companies get snapped up at huge valuations or IPOs and the strategics will often outbid PE firms for more scaled assets. I’ve done a home run deal in the space so it is possible. There are some MM firms with a heavy operational playbook that post consistent returns.
can I pm would love to learn more about the space
All I know is Sycamore guys are MAD for that $22bn Walgreens LBO w/ circa. 85% debt smh
Math is wrong, it’s like 65% LTV at close.
The fact everyone keeps running with that Restructuring post… lmao
Gtk. Still a shit ton of debt for such industry. Hope they make it out down the road
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