UMM PE List
What constitutes what people call UMM? Which firms are considered in this range? Just curious for some names of shops.
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Latest fund raise 3-7bn probably. Though many use 10bn as the large/mega cutoff. Portfolio concentration also plays into this bc umm is more of a function of typical check size (latest fund size / # of deals per typical fund).
This is similar to how I'd view the size range. Some HHs like HSP described UMM as $5bn to $10bn fund range during the recruiting process but UMM is a bit of a nebulous / subjective label.
Here are some UMM funds that come to mind (definitely not a fully comprehensive list): AEA, American Securities, Audax, Berkshire, Centerbridge, Francisco, Genstar, Golden Gate, GTCR, Harvest, Lindsay Goldberg, Madison Dearborn, New Mountain, THL, TowerBrook, Veritas, and Welsh Carson
Would add Advent and LGP and H&F to this. I was wondering what WSO thought of the Euro funds like Apax, CVC, Cinven, BC Partners and Premira
Advent and H&F are both very much MFs. Look at their last fundraises
MF implies more of a global presence so no they are not. Similar to how RBC is not a BB.
My guy just compared RBC to H&F/LGP/Advent
Thanks intern/prospect
Agreed, it's sort of a catch-all term for firms that aren't megafunds but also write big checks and have raised massive funds (often bigger than traditional megafunds). I think the best way to describe UMM would be large funds ($5Bn+) that haven't diversified away from being pure private equity investors into massive asset managers. For example, even though H&F's latest fund is bigger than TPG's, the latter is considered a megafund because they have dozens of funds across various investment strategies while H&F is purely PE. Ditto for say, CD&R and Bain Cap.
Of course, places like HIG complicate this definition but I would say it generally holds true and explains the whole "h&F IsN't A MeGaFuNd" debate
Decent perspective, but at the end of the day, who really cares. Just like the "what is a BB" debate, the "what is a MF" debate is pretty pointless and usually devolves into a dick swinging insecurity contest.
Like business schools and recruiters aren't like "oh we only hire from MFs" - people know H&F is legit AF. Just like how Stanford isn't an Ivy, doesn't mean it's less "prestigious" or whatever the fuck people are obsessed with on this forum.
100p this whole discussion is inane. Nobody in real life differentiates between funds based on meeting some arbitrary standard for “megafund”
Like most people are saying, the difference between MF and UMM is nebulous and doesn’t really mean much. You really need to consider three things when thinking about these funds: scope of the fund, velocity, and fund size.
Scope of the fund: is the firm’s $10 billion fund allocated across groups in the US, Europe, and Asia? Is the fund split between industry groups so that each group gets a pro rata share of the fund to invest? If you think about it this way, if a fund has a $10 billion fund split evenly between the US and Europe, as a US associate, you are effectively investing out of a $5 billion fund. If it’s further bifurcated by industry, that pool of capital gets smaller again. The point is that how the fund allocated capital across groups and geographies can change the check size that is being committed in deals.
Velocity: this relates to how fast the fund is to be invested. if a $2.5 billion fund has a 3 year investment window, and a $5 billion fund has a 6 year investment window, they fairly comparable. the $2.5 billion fund will have to be disbursed with much higher deal velocity than the larger fund with a longer investment period. Again, fund size does not tell the whole story.
Fund Size: lastly, the fund size is the coveted number that most people look at. Clearly firms with larger funds will have to increase their check size when looking at deals, but hopefully the above points show that much more goes into thinking about funds that simply the number of zeros appended to their latest fundraise.
I hope this is helpful.
I would personally consider the large diversified and multi product US asset managers (BX, KKR, et al) as "megafunds", pretty much everyone with above $10bn fund size (for US for example Advent or HF + others, for Europe CVC, EQT, Permira + others) "large cap PE" and everyone from above a couple of bn up to that mark UMM, but then again who really cares. All those names (incl many UMMs) still compete for many of the same assets, often in bn+ deals. What counts is that you get decent deal experience, work in a team you like and comp usually follows at all of these.