Ranking PE Secondaries Firms
Hi all, am interested in hearing how you guys think of the secondaries players in terms of culture/comp/wlb/reputation - specifically at the bigger shops like BXSP, GS AIMS, Harbourvest, Ardian
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HarbourVest > Ardian > HL > Blackstone > Apollo
Would love to hear reasons behind this
What about Lex?
Lexington Partners or "Lex" is one of the top firms in the space, and if you interview with them, I'd recommend mentioning that their size/reptuation gives them access to deals that almost no other firm can simply do, giving the firm significant leverage in negotiations and terms.
You can find more with a quick google search, which returns lists such as the following:
https://www.penews.com/articles/revealed-the-top-10-secondary-firms-202…;
https://www.secondariesinvestor.com/top-secondaries-firms/
For the 'Why Secondaries" question, mention the shortened J-curve and better risk-adjusted returns, the opportunities to buy at a discount from LP's that need liquidity, and transparency into what you are investing in versus traditional blind pools. This will demonstrate you have a strong understanding of the industry. The rest is up to you.
Considering I work at one of the shops you mentioned, I can give you an honest view.
For starters, there is no comparison to Blackstone - it is miles above the rest you mentioned. BX can buy tiny positions as well as big positions, the team is massive, and the level of talent is second to none. I find the BX team to underwrite much more bottom up than the other groups you mentioned. Downside is that you really are a massive beta play as it is overly diversified so you're really just capturing the market.
HBV has historically good returns but pay is under market and its leadership is rigid. To me they are more of a FoF than a true leader in secondaries.
Adrian would be my runner up to BX - while BX might be 60/40 LP to GP, Adrian is 90/10. Adrian have great relationships, their deals are massive, but they use too much leverage and often pay too high of a price. If I was an ultra HNW I would prefer BX to Adrian, but could also find funds in the MM or LMM with better returns and strategies than both.
Apollo isn't really anything to write home about. For a few years they've been using Hybrid Values balance sheet and have been irritating the hell out of bankers and other buyers in club deals. They now have their own fund but the team isn't that great - I really don't think they're doing anything special despite what they claim.
This guy clearly doesn’t know what he’s talking about. he doesn’t even know how to spell Ardian.
Xx
Once they start generating decent returns I'll rename them from Adrian to Ardian.
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