PE Firm hasn't done a new Platform investment in 2 years
Tech PE firm that a recruiter hit me up about hasn't done a new platform investment in 19 months and will likely not close one for another quarter. They have a $14B AUM and are deploying capital for add-on acquisitions for existing port-cos, but that's it.
Is this a bad sign in terms of the fund? How common is it for $10B+ MM PE firms to not get new platforms done in this long of a time frame? What are some reasons that could cause this considering they have substantial dry powder?
I personally don't envision myself at a fund that isn't closing new platforms at least semi regularly, seems like it would be a negative experience-wise.
I think there's no way to really know until you talk to the team themselves. You hit the nail on the head, it's a long time to not deploy platform capital but tech has been kind of weird (when has it not been since 2013-2018 when people were riding 4x rev to 8x rev and are now on yacht somewhere for doing literally nothing). That said there has been somewhat of an uptick in tech dealflow since the iced over late 2022-2023 period.
But maybe there's a good reason and if they're getting capital out the door in an accretive way through portcos I wouldn't necessarily say there's nothing there. But you hit nail on the head as well that that doesn't necessarily translate to an awesome experience for you as an Associate, doing add-on work is either hands off no learning (e.g., if UMM sized deals) or if the portco is small enough to need your help then you're basically doing corp dev at the PE level which fucking sucks for a variety of reasons.
So if the firm is reputable I'd take the call but go eyes wide in about what you want out of your experience and whether you'll be able to get that there, and what your canary in the coal mine that you're looking for will be as to test whether or not the dynamics of the firm vs-a-vis no platform are palatable to you.
Wow this post made me hit 16k bananas after 10 years of posting......... might be time to stop offering advice....
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