Prestige Rankings Thread - PE firms

Sounds like the ranker didn’t get an H&F interview…

More common now than before ever since the direct teams were scaled out - all the people I know at SWFs do 100% direct. I think they're competing decently vs. MM funds for talent, considering junior pay is in-line with most MMs (mid-200+), good hours, huge AUM, and big institutional brand helps with b-school. On the tech side the exposure is decent, since these guys are some of the most active in terms of leading growth rounds.

That said most buyout/growth funds are still considered better than SWFs overall because uncompetitive pay progression = senior talent usually not as good. I think the verdict is: good option for pre-MBA 2-year stint all things considered, but if you want to pick a spot to lean into investing post-MBA, probably avoid. This applies to places like SoftBank too for similar reasons. Junior talent seems good to great, but when you look at the MD-level, you'll find a lot of questionable profiles. 

The amount of misinformation on this site about PE placement into MBA is toxic. Don’t listen to anyone here - feel free to ignore me as well. 
 

In my business school class (S), we had 25-30 folks with non-VC private investing experience (growth equity to buyout). There were maybe 8-10 from what this forum would consider as megafunds. There were also many from lower AUM funds of different types, including many from the LMM to middle-market. Ever heard of Blackstreet Capital in DC or Water Street in Chicago or Thompson Street in St. Louis? Associates from these firms were at Stanford during my two years there.

MBA adcom treats all PE firms the same - an average candidate  working at KKR (of which there are many) does not have a meaningfully higher admission shot as the same quality of candidate as someone who works at Altamont. Some firms have better relationships with some schools (eg Berkshire places well into HBS), but at the end of the day you are more than where you work. There is of course a correlation between quality of firm and quality of candidate, but the simple idea that because you work at Bain Capital you will get into H/S is not true.

Also, I applied to 3 schools (1 more than the several of my peers) so I chuckle at the notion of M7. We aren’t recruiting VPs out of Sloan.

So, please don’t think that joining a private equity firm hurts your B school chances. That’s stupid.

Don't disagree and am very biased - will acquit - but could also argue that other than your generalist strategies, stuff like Silver Lake and tech-based funds should also be weighed down as their growth/attractiveness is similarly a "presence of the times" dating from the 2000's and internet/SWE/FANG/derivative (stuff like Salesforce) exploding in market cap and therefore creating a larger market opp. 

Infra has increasingly become more versatile with places like Sidewalk doing tech-adjacent infra, hard assets having more first derivative stuff available to invest in (what Apollo's NR group focuses on) and more flexible mandates where investors look to infra funds to invest in things with "infra-like" characteristics. 2020 was a massive year for infra - $100bn fundraised across some of the biggest brands. BlackRock (big brand name, big presence in infra) had a $5bn climate fund raised last year - that's low end UMM-ish if we're going by the book and yet completely dwarfed by the rounds that EQT, ISQ, Stonepeak and KKR all had at ~$15bn each. All in 1 year. There are reports of Brookfield looking to raise a $25bn fund with GIP having done $22bn in 2019. If you compared the size of top infra funds vs top generalist funds and made a rankings list by latest fund AUM, infra would populate half of the top 10. Pay at places like GIP/Stonepeak rival and are definitely not less than the Tier 1's on this list across all levels. The polish/resume (blue chip school and bank) requisite to recruit inward is similarly prestige-gated.

Someone above posted that you need only 4 years to make principal at Apollo (in their non-infra/NR strategy presumably in this comparison) but 7 to make the same level at GIP. That conveniently ignores the fact that you need an MBA and then you need to re-recruit at Apollo to make that jump between 2 yrs as associate and 2 yrs as senior associate/VP. During those 2 "gap" years the person employed at GIP is going to be making at least $450k/yr+ while the Apollo person is not only not making money, but having to pay $150k/yr+ in tuition and housing. That's a $1.2mm delta with growth/carry/comp trajectory post-principal at both firms being very similar afterward. This doesn't even include the opportunity cost from carry that you start accruing as a year 1 senior associate at both GIP/Stonepeak; having even 10 bps in GIP's fund 4 at 12-15% net IRR would be 1.8-2.0x (say 1.8x) MoM aka 3.2bn * 0.010% = $3.2mm over 7.5 yr avrg vest period for a conservative $450k in carry/yr. The top shops in infra are mostly career track whereas you can't say the same for several Tier 1 generalist programs - forget the carry, the actual upward mobility is huge and goes unmentioned on a lot of the stuff I read on WSO for some reason when MF infra PE vs MF general PE is being compared. 

That being said I would generally agree in having top infra funds being 1b/2a just because a critical criterion in rankings is optionality and at the end of the day whether you're looking at things from an IB or PE perspective, generalist PE funds and RX (at top shops)/M&A banking have always been, and will continue to be, weighed the highest because exit opps from these places are the most versatile.