Tired of being a generalist
Principal in a PE shop where we do buyout stage investments but we are truly generalists across sector. Finding it tiring to be going through all these deals having to put on different hats when looking at tech vs industrials vs consumer.
Curious how other generalists tackle this.
Agree. Think generalist PE model is dying - at least at the MF / UMM size range. It's just hard to win a deal in any case when rest of the industry is moving towards sector specialization.
Think the future is in sector-specific funds, or strategy-focused funds (e.g., infrastructure, 'special situations', mezzanine, etc.). I think like many industries - PE GPs will start bar-belling into two groups - megafunds who are effectively asset aggregators / "Walmarts" of PE or boutique sector specific funds that have some real angle for alpha. Undifferentiated MM/UMM generalists I think will grow slower / shrink over time.
Tech, healthcare, FIG, and to an extent consumer I think are non-starters these days for generalist PE. If at a truly generalist shop, would personally focus on industrial-like businesses (which is pretty broad in itself set). And as with most things, best path is to do 1-2 deals in a certain niche-sector - and then basically build a whole career hunting for those kind of deals over and over.
could you elaborate on why you would focus on industrial-like business at a generalist PE shop; also if you were still on the sell-side and truly didn't care about a specific sector, would you have raised your hand to get staffed on industrial deals?
asking because I'm currently staffed on 3 deals (2 are industrial, 1 is consumer tech) and thinking about how to best position myself for short and long-term
I'm not him, but the immediate logic is that at a sector-agnostic firm, you aren't going to succeed very often trying to invest in a technology, healthcare, or financials asset when there are firms like (taking technology, for instance) Thoma Bravo, Clearlake, and Vista with:
You're either going to:
Industrials is a broad universe so you're less likely to face these factors.
Ah makes sense, will keep pushing hard for these industrial deals then
Curious on the industrials as well
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