True LMM / MM firms?
It seems that a lot of people mistake what the LMM / MM is, and i’m looking for a more up-to-date view on this. Does anyone have any insight into “up and coming” LMM / MM funds? When I mean LMM / MM I mean firms with $1-3 billion dollars in AUM.
Here are a few examples (looking for more in this discussion):
Resurgens Technology Partners Excellere Partners Platte River Equity Harvest Partners McCarthy Capital
This can include traditional PE funds and GE funds, any insight is appreciated.
Trivest is one of the best
Can attest to this, have seen their materials and have had multiple double-digit MOIC deals in their past 3 funds
Congrats on Trivest
HGGC thoughts?
Most of these firms are leaning MM with their most recent funds falling somewhere between $900mm - $3b so total AUM will likely be a tick higher than your $1-3b number. Some are better than others but all appear to be growing (some even in this environment):
Sunstone, FFL, BV Investment Partners, Warren Equity, Court Square, Nautic, Bertram, Sentinel, Cortec, Aurora, Pamlico, Norwest (growthy), Gryphon, Arcline, Knox Lane, Sterling, Wynnchurch, Windjammer, Incline, Levine Leichtman
The list of LMM names is extensive, as we just went through a ~2-3 year period where too many managers (imo) were able to raise a first fund or first two funds without a real and extensive TR of success or thoughtfully constructed infrastructure to scale, and we will see those be the biggest losers in PE during this market slowdown (along with publicly traded MFs). All this to say, I'm not even sure you can say a firm is up and coming until they've at least reached a certain size threshold
Thoughts on Sunstone, Court Square, Arcline, and Incline? Heard good things about these four and are on recruiting radar going into this fall.
Have heard good things about Arcline and they’ve grown rapidly. Very lean team for their size and essentially all industrials / industrial services.
Court square is a historically strong firm that went through a tumultuous period leading to a significant downsize in fund. I think returns have been ok but their recent fundraise has been slow from what I’ve heard.
Sunstone just raised a $900M fund and have done well thus far but I’d put them in the bucket of TBD to see how they handle this current soft software market. Killed it during the heart of zirp the last few years with some big winners. Good people from those I’ve interacted with.
Incline is an interesting one. Returns have been good and just raised a new fund but probably the last of these I’d want to work at. Knew a mid-level that left from there and culture is very sweaty + plus you’re stuck in PA. Have met a few awesome people there and a few that came across as interesting to say the least. They clearly have a formula that works but tough sell from a lifestyle perspective.
Others likely have more specific info on each.
Would appreciate your thoughts on Nautic. Latest fund is $3B, so seems firmly MM, but have heard their returns have been strong.
Performance has been great. There’s a reason why Blackstone made an investment in them. Healthcare has been their bread and butter historically but they now have a fairly large industrials practice and also a separate business services team. Office is in Providence but a lot of people on the investment team live in Boston. Lot of the senior guys have been there for a while.
My firm competes against them a bit on the healthcare side and I know a couple of guys on their team.
I've seen Bertram overpay for a few deals, and then get very very lucky. I think they were well positioned with COVID.
Any insight on culture? Not very talked about but from what I’ve heard and seen on pb, historical returns are strong. We’ve gotten beaten to the punch on several assets in recent years by them.
Harvest’s latest fund is $5B+ with a total AUM of $20B+ lol that’s nowhere in the realm of your criteria
Wasn’t aware that they were that large.
If you're able to get a list of funds firms like RCP or 747 capital (FoFs) are investing in those fit the profile of true LMM. Can't speak to any of them in particular but all of those two firms underlying fund investments will be sub $1b and most are $200-600mm.
Thank you, this was extremely insightful. I was able to find some interesting funds looking through 747 Capital’s portfolios.
This was helpful thanks!
Anyone know fitzwalter? Know someone that interviewed there a bit ago and said were very sharp
Bump
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