PE Capital Markets - how to break in?

Anyone have insight into what the capital markets team do at the top PE firms (KKR/Warburg etc) and the career path to these teams? Is it more internal hiring or do they hire from BB global capital markets teams/IB? What skillsets are useful in this type of role.

Also how do these roles compare from comp/workload perspective?

Appreciate any information appreciated!
Many thanks.

 
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Capital markets roles within PE can mean many things

KKR essentially operates as an internal broker / dealer competing with investment banks. Not only do they do capital markets transactions around the PE portfolio, but they will also go out and pitch for business within the lev fin and ECM markets. If you look at their latest investor deck, I remember they had a slide breaking out their fee % allocation around their existing portfolio and outside capital markets activities. I want to say that number was around 300-400 million a year in fees in recent years, just so you get a sense of magnituide here. I also want to say roughly 20-30% were fees from transactions around the PE portfolio. 

Other places like TPG, Silver Lake, Francisco Partners, Platinum Equity, and Genstar, have a capital markets team but they tend to focus exclusively on capital markets activities with their existing portfolio companies or prospective portfolio companies the PE team is looking to acquire. They dont go out and compete with IB. The role here is to field inbounds on pricing grids from investment banks to try to push for the most favorable terms for the PE team. Majority of the opportunities will likely skew lev fin vs ECM. Some teams will have professionals that only focus on lev fin activities and others that focus on ECM, but the majority operate as generalists across both. These teams tend to run significantly leaner. I havent seen a team exceed 3 bodies. Usually a Managing Partner, VP, and Associate. With smaller PE firms, the PE partner on the deal and the junior PE deal team run point on securing the capital structure. But you can also see this at some larger funds. I know LGP for example doesnt have a capital markets team. 

If you look at the background of people that join, they almost always come from outside of the firm. They are not internal hires. They come from a leveraged finance background at a BB bank, usually reaching the Associate / VP level before making the switch. Once they join, they typically stay and move up the ranks until a partner role opens up within their firm or another one.  

I would shoot for a BB capital markets group, ideally lev fin over ECM. Try to aim for a group that has high volume working on sponsor backed deals. Also a group that has the opportunity to be a lead bookrunner on said deals. The relevant experience here is to have familiarity pricing an issue taking into account the credit, how it compares to similar issues, and some element of fielding investor interest. You dont get that experience as a passive bookrunner since you are a price taker from whatever the lead bank and the sponsor has agreed to. If your goal is to land at one of the leaner strategies, it wouldnt be a bad idea to take a temporary detour and join a KKR esque capital markets team. These teams are larger and you can sell yourself as having experience doing this work on the investor side under a PE umbrella with their existing portfolio companies. 

I have no idea what comp is. If i had to guess, it would probably be in line with what private debt associates are making. I would also guess that the capital markets team does not make the same as the PE team. And by not the same, I mean less.

 

This is spot on having interacted with them in LevFin, been at a credit shop and now working in Private Equity (disregard my title).

KKR’s business is a $500m p.a. Business last I heard. 

Role is quite boring & repetitive if you ask me (churning through grids to deliver the best docs & pricing to your deal team - aka 25bps of interest saving on the capstack) and when market goes south like today’s environment these flow/vanilla guys have no clue how to handle it. 

 

This is spot on having interacted with them in LevFin, been at a credit shop and now working in Private Equity (disregard my title).

KKR's business is a $500m p.a. Business last I heard. 

Role is quite boring & repetitive if you ask me (churning through grids to deliver the best docs & pricing to your deal team - aka 25bps of interest saving on the capstack) and when market goes south like today's environment these flow/vanilla guys have no clue how to handle it. 

Seems sweet to me. Prob same cash comp. Less carry but whatever it’s easy as pie and you just do the same thing over and over. More stable hours too

 

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