Legacy vs. Up-and-Coming Funds
Currently prepping for next on-cycle and targeting MF/UMM names. Obviously the MFs speak for themself, but was curious more about the UMM names— specifically the “legacy” names vs. the newer names.
Would you rather have an associate seat at one of these established players (Berkshire, NMC, Welsh Carson, THL, Audax, Providence) or take a gamble on some of these newer names that have had fund sizes balloon recently (Great Hill, Nautic, TJC, Arlington, Havelli, etc.)
When weighing legacy funds versus up-and-coming funds, here’s what you need to consider:
Legacy Funds:
Up-and-Coming Funds:
Key Considerations:
Ultimately, the decision depends on your career priorities and risk tolerance. Both paths have their merits, but aligning your choice with your long-term goals is crucial.
Sources: Impact Funds Oncycle Recruiting?, Navigating Distressed HF space and recruitment, Reflections from year 4 as an equity analyst, Up and Coming Funds, PM / Sr Analyst at MM HF to LO PM -- doable?
Depends on what you’re solving for out of a PE associate program.
B-school / HF looks? Would assume you’d be better off at a legacy name given connections and brand.
Long-term career in PE / career-track role? Have a better shot at a newer fund. IMO
Edited by AI for language purposes. Personal background is that I am at a older top UMM that is growing. Although I do not regret my decision, wish I would have joined a firm with a larger runway for growth.
Not sure your fund classifications are accurate, but that's not really relevant to the underlying question. Before any of this, figure out sector, location, and style — that matters more than where a firm falls on the spectrum below. With that caveat, evaluate a PE seat like an investment: risk vs. reward.
Scaling UMM / first-time fund — Risk: prestige hasn't caught up to fund size yet. Mitigants: by the end of your 2–3 year stint it usually has, and first-time funds are typically founded by big names with reputations that carry on their own — if the founder couldn't clear that bar, they wouldn't have closed a debut fund of a size WSO goes rabid over in a fundraising environment this brutal. Reward: growing AUM means more seats above you and a real shot at promotion. If you're risk-tolerant and still set on PE, this is the best type of firm to join.
Flat to slightly-growing legacy UMM — Risk: promotion math. If AUM barely moves fund to fund, headcount doesn't need to grow, so someone above you has to leave for you to move up — and these shops are usually overstaffed at the mid-level already. Reward: a stable, established brand that isn't fading, steady deal flow, and a known quantity. Lowest variance in the UMM world on both the upside and downside. It's the risk-averse pick if you're staying in the UMM — though if pure downside protection is the goal, MF PE does it better (at the cost of slower promotes and less responsibility early).
Declining legacy UMM — Risk: fewer deals, and the prestige fades over the same 2–3 years you're there. Reward: the present-day name brand — which is exactly the thing that may not carry weight by the time you leave. Honestly hard to justify for most people; I'd take a smaller, growing MM over this almost every time.
Super helpful. If i could ask, what are some fund u would throw into each bucket? Just trying to wrap my head around the landscape a bit more.
Going to give you one clear examples of each that come to mind so it's very clear. Growing UMM: Arcline , New Fund : 26North, Flat to slightly growing UMM : THL, declining UMM: Providence. Every bucket except new first time fund has other names, it's pretty rare for a first time fund to be 2bn+, let alone big enough to be considered a UMM.
Great Hill was founded in '98 (ninth fund), TJC in '82 (seventh fund), Arlington in '99 (seventh fund), and Nautic's predecessor was founded in '86 but Nautic itself spun out in '00 (eleventh fund). They all had good recent fundraises, but I don't know I'd say any are "newer". Great Hill, TJC, and Arlington are all extremely institutionalized with long-term team continuity, which likely limits just how much additional headcount they plan to add; if they start new strategies or plan to reduce fund concentration meaningfully, then yes they'll need new heads, but if they're just going to moderately increase average deal size and moderately increase deals per fund, can probably do it with comparable team size.
Agreed and something I called out in my comment. Names that would actually qualify as young growing UMMs would be more the 26North, Patient Square, Arcline, Haveli, etc.
Not the most relevant to the conversation but friend is at Patient Square and absolutely hates it there, sweaty af
havent heard the best about 26N and Haveli. 26N is mostly Harris money and has only done two deals, seems more like a family office than any real fund. Took in insurance money for the AUM game but just seems like it isn't the best place for growth as it is really just managing one guy's personal wealth.
Haveli is a spin out of a guy who got pushed out at Vista. Hours are rough and is based in Austin which isn't great for meeting other people in the industry. Also I still don't really see where their differentiated edge is vs. a Vista. Just seems like another middle market software fund.
what are some names that would fall into the lower growth legacy bucket? THL? Berkshire? WCAS? Nordic?
Relevant to several posters above - reminder that the trifecta of good WLB, high pay, and career track role from associate+ does not exist. Pick 2 at best.
Figure out what you’re optimizing for, because you’re not going to find everything.
Are there any good software firms with strong career track potential in your view?
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