Q&A: TPG Capital Associate Experience
Hey guys. With the ever-so ridiculous on-cycle process looming, I figured I'd use my delayed flight to hopefully give back to the WSO community - especially those of you who have absolutely no idea what you're doing or like professionally, but are gunning for top PEs (no shame, that was me half a dozen years ago).
So, ask me anything. Won't get into specifics or anything identifying (myself or others) but will try to be as open as possible
Before and after BMI? Number of girlfriends?
16; 1
what are hours typically like when on and off deals? any tips for the interview process?
Lifestyle was honestly better than banking.
25% of the time you’re sprinting in round 2 diligence, working ~80-100 hours
75% of the time you’re not, so you’re working ~60-70 hours
Will comment more on interviews below
oh and comp?
It may have gone up but think you can expect over 350k ur first year and over 420k your second and low 5s for senior associate
Cries in lower middle market
This accurate for all MF? Or higher for TPG
Higher comp than everywhere except APO/H&F
What did you under prepare the most at other funds you were interviewing w before hand? Or maybe see friends undeprepare at their top funds only to get their secondary/ tertiary options with more experience under their belt?
Until I was on the other side,I didn’t fully appreciate just how brutal this process was from a candidate probability success POV. I’ll look at resumes of these kids wearing in and they’re simply flawless, but simple fact is we can only hire a few of them.
To maximize your PoS you need to be either absurdly smart or absurdly prepared.Sometimes the former doesn’t work if you come across as being on the spectrum. I got asked things in my interviews (bond math, other niche finance topics) that would’ve taken so much time to prepare for that it’s almost not efficient or worth it to spend meaningful time on. Just get good at thinking through new situations and be smart enough to actually figure them out.
Honestly given what I’m hearing from my friends at other larger funds, TPGs process is likely one of the most difficult if not the most difficult in terms of technical challenge. Which makes sense given it’s a top 4-5 seat to have generally speaking. Also, know your deals extremely well.
It’s a fine place to work and it’s considered a MF mostly because it’s publicly traded and grandfathered into that category from when the big guys were KKR, bx, Apollo, TPG, etc.
But let’s be real, TPG is not a top 4-5 destination in PE. They haven’t done great, latest flagship fund is like $12bn. So half that of bx, KKR, Apollo. Half that of H&F, Thoma, Silver Lake, CD&R.
They still have the MF brand halo around them, but their peer group is now more like Platinum Equity and Genstar in terms of size cohort. $12bn fund as a public GP means there’s only carry attached to $6bn of AUM for the investment team.
It’s a solid destination as a Pre-MBA, but if you have options at one of 1-2 dozen other PE firms, that’s a better spot.
Least obvious troll attempt. I don’t work at tpg but if you’re actually a principal in PE you wouldn’t 1) forget the MSD billion healthcare sidecar 2) compare tpg to platinum equity(??) in any world 3) remember this whole premise was for associate experiences.. go look at the mf returns thread - all of tpgs peers have mid returns/fundraising
Put wso down and hit the books.. it’s finals season intern
Who cares about the sidecar? Everyone has some variant of sidecar funds, tech, fig, HC, special sits, rescue capital, etc. All that matters is the flagship. They have a large HC sidecar bc their investors don’t trust them to do anything else. And they’re not raising an undersized flagship fund because it’s fun — get real.
Numbers don’t lie. Look at flagship fund sizes. TPG is more akin to Brookfield PE than a BX/KKR/Apollo.
Even Carlyle, which sucks, atlaast they went out with a $22bn target. They may have failed and only ended up with $15-16bn (still well above TPG), but they’re at least pretending to still be a big boy. TPG ship sailed long ago.
You are right about the comparison to Platinum. Not a very good one at all. Platinum has great returns and is the best within their style/size. TPG has none of those things.
There’s so much to unpack here and it’s hard to believe you’re a principal in PE based on the lack of understanding in what you said.
TPG has raised the 3rd most PE capital of North American PE firms ($61 bn) in the last 5 years. Only ones above them are Blackstone and KKR. This is directly from the PEI 300.
Of course the pure play firms like Advent or H&F will have larger flagships, they only raise 1 fund at a time and don’t have otherstrategies.
The public alts are a different model, they want to maximize AUM. TPG still managed to raise $16bn when you combine their flagship and sidecar funds. They’re meeting with endowments and pension funds, collecting capital across almost 10 strategies at this point. So everyone’s giving them a piece for flagship PE, growth, infra / renewables, credit, now sports, and so on. Harder to raise a $25bn fund when your most loyal LPs are writing billions in checks to the plethora of other strategies on top of the sizable allocations they’re making to your PE funds.
Equating the size of a flagship fund with quality of associate program or strength of exits (which is what really matters at the pre-MBA associate recruiting level, because let’s face it, most people at MFs are not going to be promoted) is laughable. KKR’s flagship fund is $19bn. Based on your logic, KKR is below funds such as Advent, CD&R and CVC. We clearly know, however, that any associate would choose KKR or Blackstone, both of whom have smaller flagship funds than the other names.
The TPG associate class’s average outcome post-associate years is as good or better than that of almost any fund (including most MFs). The firm sends the most associates to HBS/Stanford of any PE fund, albeit their class size is larger so on a % basis this might not be different than others. The firm’s exits to hedge funds is as good as any other fund, and better than most other MFs.
Their flagship PE fund is smaller than most other MFs, but also runs leaner than your average MF. Would you rather be one of 2 or 3 VPs/Principals in a group at TPG, or one of the (not an exaggeration) 8 to a dozen VPs / Principals at other MFs bloated at the midlevels like Advent, Vista, or CD&R.
Do you think top hedge funds, bschool admissions, or other MFs even care about the size of the flagship fund when recruiting associates from pre MBA. Of course not.
Whether it’s Bain, CVC, KKR, TPG, Carlyle, you name it, employers think of all these programs in the same light. Don’t over complicate it.
Congrats on Platinum
if you had to prep for interviews again, would you do anything differently and/or what would you prioritize in the final few days before oncycle kickoff
It looks like on cycle isn’t gonna happen in the immediate future (shoutout my boys at THL tho) so your order of operations should be this assuming you’ve spoken to HHs alr.
Modeling - need to be able to do peak level 4 from scratch in 90mins, 60min Level 1 LBO that’s in every banking drive, and ideally one that has the ancillary prompts, know this includes Carlyle, cd&r, bx, apo, and Veritas if you can get any of those models
Paper LBOs / M&I 400 - hopefully easy but need to have these absolutely cold and flawless, can’t afford to get anything wrong here
Deals / interesting companies & industries - need one take private candidate and it needs to be good. Don’t over-inflate your role on the deal but know it as if you were going to IC. I got asked so many niche questions I had to start making up stuff about the end markets, customer contract dynamics, etc., so either know it extremely well or be able to lie and have ur lies not fall apart
Math - Whether brainteasers or in technicals or paper LBOs, you need to be very comfortable with stuff like 1.1^5, if rev grows 30% margin expands Xbps, how much does ebitda grow, etc.
General casing - I did a summer in consulting and had done that prep so this wasn’t bad for me but you have to be able to knows businesses and be able to structure your thinking to answer is this a good investment
Super helpful for understanding - thank you
Would anyone be able to share what the level 4 LBO is? Is that just everything up to a dividend recap
1.1^5 - is there a simple trick I’m missing?
I know it’s impossible to know for sure but if you had to guess, when would you say on cycle will be? Trying to plan my grad trip around it but it’s fcking impossible
what are the best ways to answer "why PE" and convince interviewers you 100% love PE when you don't necessarily know what you want to do
Even before this, would love to hear how you decided on PE / do you still have the level of conviction for going into PE now after having lived it for 3 years?
Back then? I had no idea what you actually do in PE but knew I didn’t wanna do IB for more than 2 years. Honestly it’s funny to think back at how many of my priors about the job were wrong- everything from the work to the culture and the lifestyle.
Now? I love PE. Or at least I love PE at TPG - I don’t think I would nearly enjoy the role as much if I were at most other places. The people are truly great and sharp investors and you’ll learn an insane amount and get incredible branding. I think it’s the west coast + family office heritage that really shines in making it a great place to work. Won’t comment on now as to not identify myself
An answer that ties your background / experience to the job while also subtly demonstrating you have a logical informed interest in the role. Don’t think it’s that deep especially for on cycle
Did you have enough time to goon? If so what is the frequency?
Goon?
Spoken like 2 through and through virgins.
How would you rank the groups? Is consumer that bad / would you prefer a good UMM over it?
Generally for capital the consensus is healthcare >>>> software >>rest of the groups.
Can’t say enough about how sharp the healthcare guys are - really think they’re the best healthcare investors alongside patient square(not really a MF) and KKR/Carlyle. Step below that would be like the H&Fs / CD&Rs of the world.
If you’re considering which seat you’d want for an associate role, that’d be healthcare by a mile. Huge allocation of main fund + sidecar where they do interesting investments so you’re gonna work on real stuff the whole time. Strong exits even for MF standards - everyone who wants b school gets HBS/GSB (except for one international guy at W a few years ago but he did 2+2 and was only in the group one year where he lateraled from Apollo), HF placement is S-tier - Elliot’s/ValueActs of the world. Lifestyle is also consistent with the post I made above, generally very good when not in round 2 on a deal - can do Thursday Hinge dates, Saturdays are fully free, limited Sunday hours.
Happy to go into software or the others but realized how long my comment is already so will stop there unless anyone wants further detail.
Can you give your views on the rest of the groups?
I’m not sure when you were at TPG but I have a very close banking friend there now and getting into H/S was not easy for them -he was rejected at both as were several of his classmates
idmc is doing pretty well and i'd consider them a step above the other groups like consumer / industrials
any views on patient square?
Edit
Given what you said above about interviews, if you had 24 hours to prep, knowing what you know now, how would you allocate it to maximize chances of an offer? Thanks
Peak lvl 4 with template in 75/90mins. Paper LBOs, your deals. Sit out if you’re not ready
Peak lvl 4 from scratch or with template in 90mins? Just wondering bc in your other comment you say from scratch.
Seems like healthcare is a good spot but is it trending up? Have heard at places like CD&R it was a focus for IC but their partners left
Doing great. Hired a cofounder of patient square to be a partner recently. Think they’re well positioned going forward if that’s any indication
All the profiles I’ve seen lean very prestige-heavy - is that true in your opinion?
Just do a quick LinkedIn search. Would say they do veer towards prestige overall, but (1) so do most MFs; (2) seems to fluctuate class by class a tad.
What do your chances look like for getting looks coming from a BofA/Citi/DB, non-M&A but top group? Seems very prestige focused.. worth to recruit off cycle?
del
TPG HC vs KKR HC? What makes one different from the other (seems like they both have similar strategies)
TPG HC more active than KKR given KKR had a few large investments that were challenged. TPG is very active within healthcare but not best performing sector at TPG from a returns standpoint. I’ve heard TPG does a lot of HC because IC is controlled by healthcare partners.
KKR has recently had some badly botched HC deals. Just Google their bankruptcies. Despite that, the big names left to go do Patient Square and now the remaining KKR group just seems sort of slow and inactive
Broadly speaking, does anyone have insight on how Patient Square is doing?
Coming back to this - what are the good HC funds these days? thoughts on Carlyle?
From your experience and what you've seen with others, do you think it's possible to go from MM Tech IB (Jeff, Lincoln, TD) to a fund like TPG, Vista, Thoma or like JMI Equity, GI Partners, Bessemer, etc?
If not, would you say it's possible to go from MM IB -> MBA -> UMM/MF Tech investing?
Those 3 firms are not on the same tier lol
Can you clarify a little more? Which ones would you say are better for Tech out of the MM firms?
How much do you expect to make as you move to VP? Chances of moving up to VP without MBA?
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