Top Candidate Preference
Hi all,
Curious about what the general top candidates’ preferences are in private equity (from IB). How have you seen your peers decide where they want to target.
My impression is that it’s a combination of fund size, fund performance, prestige, office location, and the associate program.
Definitely generalizing, but it seems to me that people generally prefer “megafunds” (10Bn+), that performed top quartile in the last few funds, are well known by even outsiders, in New York, and have generalist programs.
Most people I’ve seen prefer: 1. APO -> fit all of the above 2. BX -> have industry specialization but very comprehensive coverage and not silo’ed; otherwise it’s a mega uns with top quartile performance and in New York 3. KKR -> similar to BX but recent North America Private Equity funds are not as big 4. H&F / Carlyle / TPG / Centerbridge > a combination of the above 5 criteria 5. Providence, CD&R ... etc
Again, this is strictly North America and strictly focused on corporate private equity. It’s also not a ranking or nor am I claiming this is representative -> just want to share what I’ve seen and see what people are seeing; meant for a discussion to see how people choose while acknowledging it’s very nuanced.
Thanks,
Compensation also matters a ton. That moves BX down and H&F up for me personally. I'd have it: 1. APO 2. H&F 3. CB, KKR, BX 4. WP, TPG, Carlyle 5. etc..
Generally top candidates prefer HFs in my experience.
What are the compensation like at the associate / principal level at some of these funds?
This is silly. Especially with the rapid interview timeline, people take offers as long as it is at a good fund. There is an opportunity to shop, but oftentimes people end up at the place where they first gain momentum and SOME are able to shop their offer.
Top candidates do not nit pick between the CD&R & Apaxs of the world at H&F.
They do. They prioritize where they interview.
Yup -the people I know prioritized and made choices when they received interview invitations at over the same time period
Went through the process last year in a top NY group. Would say for PE, this is how most people I know saw things; and would say most people end up choosing purely off prestige and perceived selectiveness.
A lot of top kids also went for Oaktree SS/GSO/Anchorage/SVP/Maverick
I also just went through the process, and think the people who placed well didn’t think about it this way at all.
You have the kids who really want megafunds. Within that, they’ll be thinking BX then Carlyle then WP. Then there are kids who want distressed who are thinking CB then APO then Oaktree. There are others that want UMM growthy PE so they think H&F then SL. My point is that the successful ones are targeted in their approach - they bucket funds based on style. That’s why ranking Silver Lake against Apollo is a silly exercise. Doubt it really ever works that way, unless a candidate is really good at faking their interests...
I think this is correct (though no one puts Apollo below CB). And there’s the people considering hedge funds that are completely separate.
More kids than you think put prestige/risk aversion over genuine interest when rubber hits the road. And if you’re at one of a few select groups (the ones that always come up), it’s pretty easy to get interviews at whichever places on my list you want. Had kids in my group whose first day interviewing consisted of, say, Centerbridge and Thoma Bravo - not exactly similar investment styles.
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All respectable places to be at and would be in the same sentence as the above funds, except for GA only because it is focused on growth equity (which some MF like SL and Permira dabble in but are not focused on to the same extent as GA)
@ people who look at this post in the future, please remember that the people ranking megafunds are those doing this on Christmas Eve; speaks a lot on how serious you should take this tier 1a, 1b, etc.
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