PE Ranking - Europe
Think it would be useful to have a ranking for PE Funds with a significant presence in Europe according to Prestige, Selectivity, Performance & Ticket size. Will adjust the list based on feedback.
Tier 1.5/MFs: BX, EQT, CD&R, Permira (although have heard recent performance was comparatively weak - can someone comment?)
Tier 2: Cinven, Bain Cap, Warburg Pincus, Apax, General Atlantic (although mainly GE?), Silver Lake, Apollo (what about European presence?), H&F
Tier 3: PAI, Ardian, Partners Group, Apax (also GE), HG Capital, TPG, Carlyle, Nordic Capital, TA
Tier 4/MM: Bridgepoint, 3i, Triton (big in Germany)
Adjustments: CVC up to T1, BX down to T2, Carlyle to T3, added CD&R in Tier 1.5, added H&F in T2, added Nordic in T3, added TA in T3
Where would industry specific funds such as L Catterton rank?
Tier 3 imo
For Permira, they have quite a few assets that they've held for a long time and are struggling to get rid of.
Would say general consensus is that CVC is a tier-1 in Europe.
I would definitely move Triton up a notch. Their last fund has been very successful and they've been doing some pretty big things recently ($1.3bn public takeover bid of Caverion, $1.6bn public takeover of Clinigen etc.). Triton is mostly known for its activity in the DACH region but would say they are definitely a top 5 player in the Nordics as well.
You are basing this ranking off of perceived “prestige and selectivity only”
Unfortunately, perceived prestige doesn't pay you carry
ranking is so wrong for the actual good funds in Europe - lots of in-depth posts were made so use the search bar
Bx at tier 1 is laughable with their extremely weak track record in Europe. KKR raised for 2 years and fell really short of hard cap. Lots of US funds like TPG don't even deserve to be on this list because they are shit in Europe but are banking on their US name for clout.
Cvc performance for their size is killer - they are eu focused and are raising the largest buyout fund ever and you have them at tier 1.5?
Where is Cd&r? Why is HG tier 3? Why is Carlyle tier 2?
You have to be honest with how you are ranking these funds. If you want “prestige”, fine go for this ranking though I’d still argue going to the funds with best performance gives you more clout than going to a mediocre fund with a big brand name from the good old days.
Rankings based off of actual performance. You can extrapolate perceived “prestige” by comparing these to their fund size. I cba to make more tiers hence why everyone is lumped into the end is bad or very mediocre:
Tier 1: CVC, EQT, Advent, CD&R
Tier 1.5: Waterland (due to fund size), HG, Permira
Tier 2: HIG
Tier 2 (Good performance, but too US centric): Silver Lake, H&F (could move to bottom tier after recent performance - might blow up soon)
Pretty much splitting hairs after this point - just take the biggest name as performance is all around bad/mediocre at best
Tier 2.5 and below: Cinven, KKR Europe, BX, Bain Capital Europe, Apax, Carlyle, TPG, Astorg, Apollo, Triton, Bridgepoint, 3i, PAI, Ardian, Partners Group, Warburg Pincus, IK
Agreed. Many of the US funds are not doing very well in Europe. I've also heard about several cases where deals are run from the US and the London office is just a support function. That will seriously impact the learning experience and skills you develop.
I've been in 2 American REPE mega funds based in London. Both with a lot of prestige but really low performance as pointed above. I can also confirm that all decisions were taken from the US and key roles in the London office were held by Americans. You need locals to handle your investments, especially if you're going balls deep in RE located in Southern Europe. The disconnect between decision takers and underlying assets is so huge that carry discussions are not even on the horizon. The European offices are surviving solely on management fees.
My new motto around other students will be "Unfortunately, perceived prestige doesn't pay you carry"
What's going on @ H&F - everyone is saying they are going underwater
They've bought a ton of assets at peak tech multiples, and haven't exited anything yet. they're savvy investors, but it's a real challenge to shuffle around the portfolio when the market has shifted so drastically and you're left holding a really concentrated portfolio at the current market rates.
You made some valid points on why the original list was incorrect, but then you make an almost equally ridiculous list.
Truth is it is impossible to make an accurate list. What people should really consider is "where would I have the best career", which is optimizing for pay / career trajectory / recent fund performance (because it relates to you career and pay trajectory) / size & prestige (if you care about that, but reasonable to factor in due to how it impacts your exit optionality) / WLB & culture (but usually too subjective to really include for a ranking).
You may disagree on these metrics, but some rather questionable tiering here if you consider the full picture.
Sure, the full picture is important including culture and headcount saturation, but performance is the most important metric out there. When you take fund size into account, the tier 1 to tier 2 funds in Europe are the best, no two ways about it.
Ranking can be adjusted for some of the other points you raised, but at the end of the day, if you are grinding to reach the top, you'll look at performance and headcount saturation and won't care for anything else. Your career will be equally as miserable at any of these funds anyway while grinding to the top. if you just want to adjust for a "good career" which is very subjective, then that's a very different story and would agree that a lot of the other points matter.
Ranking based on exits in Europe is pointless - this isn't the US where people do 2+2 and then an MBA or go to a cub. the expectation is that everyone getting into PE is gonna stay within private markets. Jumping from PE to HF isn't that common (most folks get into HFs from sell-side ER and banking).
Thanks for the in-depth - albeit slightly condescending - answer.
A couple of points to note:
a) When looking at junior levels I'm not sure how vital carry really is - perhaps it's better to maximize learning experience/exposure. I know that some funds such as CVC are known for aggressive "eat-what-you-kill"-compensation, but maybe someone can shed some light on other compensation schemes & the other funds on this list.
b) KKR & BX still manage to attract some pretty impressive talent - there must be at least some reason as to why they are able to do so even though their performance lacks behind other funds such as Waterland.
I agree entirely that prestige is not the only metric and probably also not the main metric that should influence future career decisions but I do think that it is a reasonable factor to consider when choosing between different offers and funds.
Would also be interested in some opinions on Cinven - thought that their performance was relatively strong in Europe (+ some pretty impressive deals) & they seem to be held in relatively high regard on this forum.
This only applies at more senior levels. It doesn't occur at the Associate level, at least not anymore.
These large funds are changing to just who can amass the biggest management fee slowly slowly.
I do slightly worry about CVC performance going forward. Their historic returns are very good but have slowly come down over time.
I do wonder if they are in the situation where perhaps Carlyle etc. were a few years ago. Obviously, a function of the market / low rates / high valuations but increased fund size is usually hints at lower returns (but great for mgmt. fee...)
Thanks for the list and I think you hit the nail on the head with all the points around prestige. Just a comment on the list, I don't think CD&R will do well in the coming days. Morrisons deal will hurt them real bad (been hearing that from seniors at different MFs).
Yeah that deal appears to be a dumpster fire
Where would BC Partners come in?
Well.. their last fundraising target was 8.5bn EUR and they only managed to raise 5bn EUR and they started raising well before the marco shift..
HIG? Get me some of what you’re smoking
Lists are dumb anyway and this one is pretty bad even in the lists category. But yeah go ahead picking waterland or Permira over H&F. ‘Might blow up soon’ is quite insane. They’ve raised $26bn and are one of the few funds which have produced realised 1st quartile funds in recent years (news flash, all of those in your tier 1 list haven’t)
I’m not sure in what world you get to a higher TC at some of those places vs the ones you have in lower tiers.
Generally you want to avoid the European carry waterfall if that is your goal and get deal by deal carry.
Waterland is just too small to maximise your expected carry, because of lower equity tickets (less carry to go around the deal team even if you do a 4x deal vs a larger fund doing 2x).
Hg still very much operates in mid market (multiple funds I know, but similar issues), large team (lower aum per head) and a lot of the sizeable deals have been fund to fund.
Not saying these are bad places to be, but it is a rather questionable list for optimising TC.
Do you know which funds have an American carry waterfall? (Including European ones and MM ones…)
As others have said, the US funds are generally pretty bad in EMEA. They survive on management fees and brand value.
Several MM funds like Inflexion, PSG and Waterland have outstanding returns but at those places it can be hard to get promoted into a position with meaningful carry.
Point being that 'tier lists' are useless in the context of PE and it's overall better to join a rising firm with a consistent track record, visible career path, and strong growth trajectory than any of the brand name shops that have delivered mediocre results historically (KKR, Blackstone, Carlyle, etc.).
Unfortunately, the new environment will likely make it much harder on a relative basis to find attractive long-term PE careers in the next 3-5 years.
Agree - IFX I've heard Founders do hoard the carry. PSG and Waterland I know less about.
It’s as much about those firms being bolt-on shops which is a labour-intensive model and thus contributes to low AUM-per-head
What about sofina? Where would you put it?
Tier 5, they mainly do FoF for VC & Growth and co-invest in some rounds
Got it thank you
Nordic Capital should be on this list. If you are including GE, TA’s London office is solid.
Do you know anything about Nordic’s culture? Have heard very mixed things
Tier lists are so cringe
CVC should be listed before KKR because certain managing partners can bench press their model wives; not sure the same can be said at KKR or Advent. As such, KKR and Advent should be both bumped down to Tier 1.5.
I do think a lot of the above comments make sense regarding TC, however many US MF are still able to attract top notch talent and serve as a launch pad for your PE career.
This list might be more accurate than OP's for EU:
Tier 1 (MF and strong EU returns): KKR, Advent, CVC, H&F
Tier 1.5 (UMM/MF and good EU return): BX, EQT, Bain Cap, Cinven, Permira, CD&R
Tier 2 (EU UMM and strong EU returns): PAI, Hg, Astorg
Tier 3: (EU MM and strong EU returns): Waterland, PSG, IK
Tier 4: Ardian, Five Arrows, Montagu, Eurazeo, etc.
Explanation for BX being 1.5: Not been very active in EU + decided to put PE investments in Europe on hold 6 months ago, does not hold tier 1 as in US
Other US Funds which are not strong in EU: Carlyle, TPG, Apollo, etc
PS: edited from feedback from below
Thank you, where would you put partners group ?
Tier 3
IK Partners? I heard they recently shut down one of their offices so I can't imagine they're doing great these days. But I'm not an insider, so not sure to what extent this is true.
Nonsense list. PAI is not mid market my man. In terms of prestige, PAI, Hg are way ahead of PSG, IK, Waterland, you can't put these funds in the same sentence.
Whomst hurt UMM Associate?
Not about being hurt, you cannot categories large cap players with mid/small and say all of them are mid-cap.
Does anyone have a view on how many people actually get promoted from Associate levels at (say) Tier 1 and 1.5 European funds? Such as EQT, CVC etc. As this matters to actually realise carry.
No mention of WP?
What about ICG?
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