Thoughts on the following for tech: KKR, Carlyle, TPG, H&F?
Title. Would love to understand how each of these funds stack up in the tech sector in terms of learning opportunities for associates, deal experience, and exits (bschool, HF, and other funds). Obviously all are great, but just wanna get a sense. Thanks!
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following
H&F > TPG > KKR > Carlyle
H&F/TPG, huge drop off, KKR/Carlyle
Assuming TB / Vista / SLP are above all of these names except maybe H&F for tech investing, but where would you put other MF tech teams: WP, CD&R, Permira, EQT, Advent, etc or UMM tech teams: Francisco, Genstar, etc in comparison? My perception is that some of these teams are stronger than perhaps KKR or Carlyle, but curious to hear thoughts.
permira advent francisco hands down better than cg / kkr for software
Advent is no good at tech
H&F is definitely strong in comparison to the others.
how about SL, TB v HF, Premera and TPG?
Del
Agree that H&F wins but would actually argue Carlyle > KKR / TPG (and I don’t work at any of these).
Carlyle tech has done some high profile deals and are pretty strong in specific areas (i.e fintech and govtech). KKR and TPG both aren’t anything special when it comes to tech
when it comes to vertical software tpg is miles ahead of Carlyle
Works at one of the funds mentioned above. I track deals in the tech market and returns on the deals that happened. In my opinion in terms of capital deployment and returns on invested capital:
TB >= Francesco Partner > Silver Lake >= Vista / HG > TPG / KKR / Cinven / EQT/ H&F >= Waburg (mostly growth, less buyout) / Carlyle / BX / CD&R & Others
MF tech is a very competitive space. Thoma is a strategic buyer, not a financial buyer. Strategic buyer has much more you can do in terms of value creation, hence underwrite a better price and deploy more capital. Definitely the most successful tech PE out there, outside of Francesco Partner who is a value buyer and has a different strategy.
1) Francisco over the pure tech behemoths that are SL and Vista is a blasphemous take lol
2) what do you mean by being a strategic buyer vs a financial buyer — shouldn’t all PE firms be following such an approach?
1 - again, I’m talking about return and combo of Capital deployment. You can track all sponsor deals that happened 2023 YTD. In a shit market like this, only true sharp, well connected investors can do deals. Calculate which deals are done by which funds? Also calculate all the deals exited, which funds made the most money? FP bought Forcepoint in 2020 and in 3 years they sold a piece of the government portion to TPG and generated 3x+. Only a piece!
Francisco is the next H&F you heard it here first
In what sense, and what makes you say that?
Genstar seems like a closer comp
Agree - both (H&F and Genstar) pay up for quality assets, similar vertical focus, lean deal teams and great returns
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