MF PE Rankings
I’ve seen a lot of tier lists / rankings thrown around, and while I do feel stupid indulging, I think I’m a bit qualified to speak on this as I’ve worked at 3 MFs throughout my career (ignore title, helps maintain anonymity).
For any incoming IB analysts participating in on cycle or anyone in IB right now, I want to share a few words of advice. “Prestige” doesn’t matter after a certain point in the “rankings”. What matters is what you’re optimizing for. If you’re sure you want to do healthcare investing (idk why you would, but that’s a different story) don’t choose BX over TPG because BX has a better brand name. If you’re sure you want to do tech investing, don’t choose TPG over Hg because TPG has a better brand name. If you’re focused on living a quality life and not becoming a fat bald old man (or woman) after absolutely burning out after 2 years in banking, don’t choose KKR over Bain Capital because KKR has a better brand name. You get the jist. Identify what you’re optimizing for and gun for that. I see too many kids (myself included, back when I recruited) get swept up in the glamor of a name and it’s just not the right fit. As hard as it is, try to put that stuff aside.
So, instead of the traditional PE rankings, I thought I’d offer something a bit more helpful — in no particular order, a list of firms for each criteria that I’ve seen prospects optimize for. Again, these are only MFs. One can easily make the argument that MM investing is better for a large number of reasons. Please note that the following does not include any other strategies besides traditional buyout PE.
If you’re optimizing for culture: Bain Capital, Vista, Advent (could be wrong here, Advent ppl lmk)
If you’re optimizing for HF exits: BX, KKR, Apollo, TPG, Silver Lake (expected names)
If you’re optimizing for a specific industry: H&F (tech), Vista (software), TB (tech), SL (tech), TPG (healthcare), CD&R (industrials), Permira (internet / tech), TA (if you want to count them as a MF, I personally don’t but they’re one of the best at what they do - software), BX (energy), Warburg (tech), Apax (internet / consumer)
If you’re optimizing for the coolest name to tell your friends in finance you work for: TB (objectively the coolest), BX, KKR, Apollo, H&F
If you’re optimizing for the coolest name to tell your non finance friends you work for: BX, KKR, Apollo (maybe), Carlyle, SL If you’re optimizing for junior pay: Apollo, Warburg, Vista
If you’re optimizing for senior pay potential (carry, mostly, so this can read as optimizing for returns potential in the future): TA, H&F, TB, CD&R, EQT
If you’re optimizing for promotion visibility: Apollo, TB, Vista
If you’re optimizing for learning from smart, seasoned investors: BX, KKR, H&F
If you’re optimizing for operating experience — ie, running a company and getting in the weeds: Vista, CD&R
If you’re optimizing for complex deals to build your skill set: Apollo, KKR, WP
If you’re optimizing for pure deal velocity and number of deals you can have on your resume: TB, Vista, SL (basically, if you join a tech fund, this is taken care of)
If you’re optimizing for investing in high quality assets: H&F, CVC
If you’re optimizing for diversity in deals you get to look at, from an industry perspective as an associate (generalist programs): Apollo, BX
If you’re optimizing for diversity in deals you get to look at, from a deal type perspective as an associate: Vista, Apollo
If you’re optimizing for good looking colleagues: BX, EQT(!!!)
If you’re not optimizing, but are looking to join a shit fund:
Just kidding, won’t do the last one to avoid arguments. But feel free to correct me if I’m wrong on anything. Also, this is only the list of things I can think of that people may want to optimize for. Let me know of any others.
This is helpful - thank you.
As I expose myself to a few different sectors and the best within them (I.e., looking at a juiced up Vista software play, a frothy CD&R industrial carve out, etc) - I find myself torn between different sectors, each have their own merit and pull for me not only from an interest pov but also future upside, exit ops, etc. It feels a bit daunting to roll the dice on an industry and strategy this early in your career.
What if I sign software buyout and the industry and/or firm gets thrashed by AI when I’m hitting ASSOC2 and welp there goes my VP promote or better yet sign a consumer group and the next Kim K snatches up the group’s top guy/gal.
It all seems so risky and baseless - but I guess this is just the game and we have to play it if we want to be in it?
Would appreciate any thoughts. Understand some of this just uncontrollable but specific to industry I just find it hard to decide on one. Going to a HH and pretend with 100% conviction I wake up every day bubbling with excitement about ONLY healthcare services…
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Were you able to move around MFs at the junior level or is this over many years? Confused how for example you would move from one firm to another AS1 -> AS2 given the hiring cycles and the potential head hunter blowback if you tried to move before your associate stint was up
@OP bumping on this as very curious how this is possible... Maybe I'm being dense
Over many years, as I said ignore my title
Didn’t realize H&F is known for the velocity of their deals.
Agreed actually, just lumped them in with the other tech funds mistakenly here. removed
I think the tough part is that all of these offers are extremely hard to land and getting ANY of them for an associate seat is an accomplishment. In most cases, banking analysts are just trying to get out and will take what they can get.
Did you enjoy your time at H&F?
Thought H&F is a generalist program too?
Personally not sure if their ASO program is. If this is confirmed true let me know and I’ll add them
Ye they are generalist. Pre big in FIG and HC as well.
I must say, I am working at an MF PE, and the smartest investors out there seem to be at H&F.
These guys will push you to the most intense lifestyle during your ASC years, but everyone I have seen move laterally from H&F to other funds (including other MFs) after three years has been dominating in their new positions.
I agree with the post on long-term earnings: typically, the large private MFs (Advent, CVC (which went public a few weeks ago), H&F, etc.) will give you a much higher share of carry compared to listed MFs (BX, KKR, etc.), who have to distribute a large portion of their carry to shareholders.
I mean you have to be incredibly sharp to get an H&F offer. Had a few friends interview with them and the oncycle interviews were the toughest out of any MF. How much can you really attribute to the firm rather than the individual? I’d guess those same associates would still be rockstars if they went to CD&R or Advent
Can you please share any color on the types of questions asked during oncycle that make them more difficult?
What’s wrong with HC investing?? Want to make sure I’m not making a huge mistake lol
bump
I work at a top banking group and anecdotally the talent caliber of people going to BX / Apollo / H&F is extremely different than the people going to Warburg / CD&R / TPG. I know people won't like to hear that but 10 years ago a megafund seat was a megafund seat, but with how large funds / associate classes have gotten, its not that hard to land a seat at a 15bn fund if you want it bad enough and have the right profile. Pretty much everybody thats done banking at a group group knows someone kind of ass thats going to a "lower tier" megafund. I also think that's because those funds themselves are so prestige obsessed that they prioritize the wrong things and Advent / Apax / Warburg Tech will accidentally hire a 25th percentile goldman TMT analyst during on cycle vs some more thoughtful UMM funds like a BDT or Welsh Carson who are willing to recruit slowly and look at top performers from middle market banks and wind up with better classes. TLDR there actually are pretty clear tiers to the quality of associate offers at "megafunds" the same way there are pretty clear tiers to the quality of analyst offers at bulge brackets. Sure, any bulge bracket / megafund offer is great, but you'd be lying if you said they were all the same to the population that actually is competing for them.
So caliber of ppl going to BX / Apollo / H&F is higher than the Warburg / CD&D / TPG crowd?
How do you feel about Bain Cap and KKR?
KKR is in the second group.
Lol at using BDT and Welsh Carson as examples of “thoughtful” hiring
Ignore the title am an AN2 going to an MF.
I don't know what you mean by the talent caliber of people lol. I am also at one of the top banking groups at a BB, and our job is just cranking out models. That doesn't require much talent, just purely hard work, it's not rocket science or very hard at all. Stop jerking yourself off and realize people take their offer for a variety of reasons. For example, CD&R has great senior pay compared to the public names as does Warburg, and has some powerful teams like CD&R industrials or Warburg Tech, which are better than most of the Apollo seats. A lot would turn down APO for CD&R because of the terrible working culture. Maybe someone wants to do tech and so might go to a less "prestigious" seat that's in tech vs elsewhere. Get your head out of the gutter and realize people want different things and recruiting reflects that.
Anecdotally, some of the top bucket analysts in my group that WSO terms "top" are going to "2nd tier" UMM/MM, while a lot of the middle and bottom buckets are going to MFs. Spoiler alert : PE recruiting cycle is fairly random and not reflective of actual ability as talent due to A) how quick on-cycle is(rewards the hardos by definition), B) how spread out/varied off-cycle is, and finally most importantly C) not everyone wants the same thing.
In order:
1. Even if your job does not require a lot of intellectual work, there's still a very easily visible difference between how smart / how good the good vs bad analysts are (even within top groups). If i told you I was going to give you another analyst on your deal and either you could pick the analyst or get a random one, would you really go random?
2. I agree that someone who really prioritizes work culture would turn down Apollo for CD&R. That person would also probably turn down CD&R for Berkshire (even better culture / WLB). Someone could also really be interested in tech / industrials and prefer Warburg Tech or CD&R Industrials to Apollo. Those people would also probably prefer Silver Lake or KKR Industrials to Warburg / CD&R respectively. My point is that there are a bunch of big megafunds that aren't the best at anything. They're not people's first choices along any axis they care about (industry coverage team, strategy, WLB, pay). If I were to bring all the incoming megafund associates into a room and tell them they could choose any offer they wanted on the spot, I don't think anyone really believes that the % of people from TPG / CD&R / EQT / Permira who would choose to stick with their current offer would be the same as the share of people who signed at BX / Apollo / H&F / KKR / Silver Lake (places that are disproportionately number one choices for people depending on what strategy they want).
This is the least groundbreaking / controversial take ever imo. The same way that MF is generally considered more prestigious / attractive than MM (even though of course people will have their own reasons / preferences), all I'm saying is that the MF band has gotten so big that there's observable hierarchy within that class as well. At the end of the day, all of these are great jobs. All BB IB jobs are great jobs. Still, it's not a controversional take that a GS/ MS offer is better than a UBS / DB offer and I'm saying the same dynamic is at play with buyside recruiting.
WCAS goes on-cycle as of last year btw so that's not even correct. A lot of UMM's go on cycle just as MF's do, it's almost as if there's an insane amount of competition for top talent. A lot of recruiting is luck based and based on what good offer you get. The exploding offers are insanely quick and a lot if not most just take the first UMM/MF offer they are happy with. Most people aren't turning down GTCR to wait on MF's, it just doesn't make sense from a risk-reward perspective.
Honey, you work at a bank. Either you failed at recruiting for the buy-side or you’re one of those hardos that really believes bankers add value to the economy. In any case, your opinion on buy-side seats is irrelevant, similarly to how my opinion on consulting/big tech/whatever would be irrelevant with my finance background.
Recruiting is mostly random and your ability to interview well and excel in the job are reasonably uncorrelated, whether you like it or not. You can have a great career at any of these funds. Some of the funds you mentioned are incredibly cutthroat and rigid due to their size so lots of top quality people who could stay around couldn’t due to tough up or out etc.
what are latest thoughts on KKR nyc groups?
Group-dependent but heard super solid stuff about the culture and caliber of people in Industrials and NY TMT (Media & Tech Services)
Lol KKR industrials culture is so uptight, good group from a deal / learning perspective though if you want to focus on that sector
If you want to optimize for going from 0 to 1 experience wise: search fund
If you want to optimize for going broke and declaring bankruptcy: search fund
What's wrong with healthcare?
Just personal preference, a ton of people don't like healthcare deals for "moral reasons"(this is a long debate that can be had about it, but whether you like it or not a large chunk of banking leans left-wing, especially at the junior level where people just entered banking right out of their liberal target schools or even worse their liberal arts college). More pragmatic reasons for HC hatred: it's nearly impossible to understand most of the new tech in the space without advanced degrees such as a PhD(even this only helps in your niche of research mostly) or doctorate, so as a regular old IB - PE guy it's very hard to build expertise. It's also an industry where there is already talk of regulation into PE activity in the space more so than any other space(obviously not extremely likely, but should factor in slightly in terms of risk-reward). Just not a lot of HC interest by people at the top groups tbh, tech remains the most popular followed by maybe CR and GIG. People are attracted to CR cus it's companies they interact with, and GIG because it's stable and a very steady broad set of businesses that fund the economy(a lot of people I have met at top groups seem weirdly interested in manufacturing or transport), and tech is very obvious. In short, HC just doesn't have as much demand at junior levels in top groups, but there seems to pretty clearly be money to be made there.
Edit: just wanted to note that JPM might be the exception amongst the top banks just because their HC team is arguably their strongest so they tend to attract a lot more people interested in HC. HC simply just isn't that popular at GS and have heard similar things from my friends at MS/EVR/other EB's. HC still has a lot of interest, it's just less so than other industries just due to the aforementioned and general political/moral views of a large chunk of IB analysts. I am not going to give my opinion here, but on the street, there is simply a large chunk of people who hate HC deals and avoid them as much as they can due to those reasons even in top groups thus HC is slightly lower competition in the PE world than something like tech or consumer. This doesn't mean that HC teams are bad or whatever, there's clearly money to be made and you can have a phenomenal career in the HC space. All I am commenting is that there is less interest in the space at junior levels not that anything is better or worse than another.
This is also the exact same case in RE, excluding the esoteric knowledge part. Also, that esoteric knowledge requirement is only relevant to life sciences. Read more about this here: https://www.wallstreetoasis.com/forum/private-equity/healthcare-pe-0
This certainly wasn't true during my time at JPM. Healthcare was one of our top groups and routinely attracted the top talent, most of which exited to healthcare PE. TMT and Healthcare Group Heads in IB are known for having the highest cash comp (along with fig) and in PE the partners also tend to be paid the best. Very cycle resistant, has lots of room for innovation, and Great pay. The only downside is the ethics aspect, but pe as an asset class isn't ethical anyways. Agree with CR being alluring though. GIG is incredibly boring for the most part. Tech investing can also be extremely boring depending on your vertical and its not like your investing in interesting companies for the most part.
Lol this is absolute nonsense. I've been in HC my whole career (IB -> PE) and political leanings have nothing to do with it. If anything, I think HC tends to lean more left than the average IB/PE group, not less.
The vast majority of healthcare investing/banking doesn't require advanced degrees or knowledge, even in life sciences... it's only in biotech/pharma where that scientific knowledge becomes useful. These are three entirely distinct coverage areas (life sciences, biotech, pharma) with different skillsets/education requirements.
Analyst 1 take...
CR is super hard to do PE in, super cyclical.
The best point in here was HC is much higher regulatory risk than other sectors, that is a very valid reason esp. with recent MA headwinds for provider.
As per the other comment, no one in any sector at my firm has moral qualms about their sector, def. not the healthcare folks. And PE isn't biopharma investing, you don't need an MD to understand these business models...you wouldn't need a BS in compsci to do tech investing either.
End of day we are in PE to maximize returns, and HC is a super durable sector through recessions b/c people will spend their last dollar on their health.
Do you guys realize that there is more to healthcare than opioids and group homes?
They have tech, software, services, consumer, infrastructure, real estate, just about everything.
The alpha at the top end of the range for check size comes from the regulation itself - incumbents are destined to win moreso than any other sector.
How can you live with yourself squeezing bp’s for EBITDA margin when cutting costs in HC directly correlates to lower quality care for people who need it? Healthcare saves lives, and the people that are in the field are in it because they feel a calling to help people. Corrupting this field with private equity is straight up evil. It’s the morally worst vertical to be in (by far) when it comes to PE.
If you’re optimizing for Canada: Brookfield and Onex?
Onex kinda cooked. Not sure how much PE is done out of Toronto vs NY
Only real answer is Altas
That’s a true MM not a MF
Could someone discuss HC teams at TPG vs KKR?
Also curious why Bain Capital / Warburg aren't often mentioned when talking about MF HC.
Curious as to what makes certain firms “highest senior pay”, aside from obviously not being publicly traded?
Wouldn’t firms like Bain, Vista, WP, Advent all essentially automatically have higher senior potential given both a) still privately held and b) not as old as some of the public PE firms (BX, KKR, APO, Carlyle, TPG) where the carry pool has already been divided 9999 times?
Pretty much yeah
Based on your experience, have you seen many people join PE in a different sector than the one they were covering in IB? Say, for example, join a tech-focused firm like Vista after covering Industrials or Consumers.
Trying to understand how important the team choice in IB is (other than team-specific prestige / strength).
Not common but not tough coming out of a strong group
Would put Partners Group in culture
Great culture indeed, but not MF
This is laughable
I’ve never heard Partners referred to as a MF but looking at their latest fundraise I’m starting to think they should be
1. APO/BX/KKR
2. The rest
There, ranked them for you. By the way, Vista and the nerdy tech places are not PE, they're growth equity.
I’m not the most familiar in the space but how would Vista, Thoma Bravo, Silver Lake, and all their flagship funds at least not be considered straight up MF PE?
Username checks out.
Vista has both buyout and GE teams.
+1 SB'd
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Think TB definitely has a focus on software but has shown willingness to venture into other areas as well
Don’t think Vista is below market for pay, saw a thread that says they’re 400+ for ASO1 but could be mistaken
you're wrong about everything you just said lol
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