What are the reputations of these growth PE firms?
I'm currently a sophomore at a target school that is in process with several growth PE firms for junior summer. The coffee chats and interviews have been going great and I am really enjoying conversations I'm having with multiple firms.
One thing I noticed while going through interviews and chats with people in growth PE is its pretty hard to get a sense of what the cultures are like at these places. Pretty much everyone I talk to is nice and outgoing but I can honestly never tell what they are like in person or if the work environment at these places is the same across the industry.
I am also trying to set myself up at the best firm I can be in terms of reputation because many of these firms do not return all their interns as I have learned. How would you rank these firms in reputation / prestige / status? And any more info on how each is seen would be great.
Based on the most helpful WSO content, it seems like the reputation and prestige of growth equity firms can vary significantly based on several factors, including their investment focus, historical performance, and the professional growth opportunities they offer. While the specific firms you've mentioned (JMI, Bessemer, Sageview, Long Ridge, Spectrum, Turn River) aren't directly ranked in the context provided, we can infer some general insights about growth equity firms and how to evaluate their reputation and prestige.
Investment Focus and Historical Performance: Firms with a clear focus on sectors that have shown robust growth, such as technology or healthcare, often gain a strong reputation. Bessemer, for example, is well-known for its investments in technology and has a long history of successful exits, which contributes to its prestige in the industry.
Professional Growth Opportunities: Firms that offer significant professional growth opportunities tend to be highly regarded. This can be inferred from the context where firms like The Riverside Company and Bain Capital are highlighted for their high scores in professional growth opportunities. While these are not growth equity firms, the principle that firms offering good growth opportunities are more prestigious applies across the board.
Overall Employee Satisfaction: High levels of employee satisfaction can also be a good indicator of a firm's culture and, indirectly, its reputation. Firms that treat their employees well and foster a positive work environment are likely to be more prestigious. This is reflected in the context where firms like The Riverside Company and Blackstone Group score highly on employee satisfaction.
Prestige and Industry Perception: The context mentions that growth equity arms of buyout firms are seen with a certain level of prestige, indicating that the industry values specialization and a clear focus. Firms like Bessemer, which have a long-standing focus on growth investments, are likely to be highly regarded.
Networking and Insider Insights: Given your observation about the difficulty in gauging culture through coffee chats and interviews, it's crucial to network extensively. Speaking to current and former employees, if possible, can provide deeper insights into the firm's culture and work environment.
In summary, while the context doesn't provide a direct ranking of the firms you're interested in, it suggests that factors like investment focus, historical performance, professional growth opportunities, and employee satisfaction are key indicators of a firm's reputation and prestige. Bessemer is highlighted as an example of a firm with a strong focus and successful track record, which contributes to its prestige. For the most accurate and up-to-date information, consider reaching out to industry professionals and leveraging platforms like Wall Street Oasis for more specific insights on each firm.
Sources: Prestige Rankings Thread - PE firms, Growth Equity: Info on Susquehanna Growth Equity, Spectrum Equity, Stripes Group?, How to tell the prestige of LMM or MM PE firms?, What is top-tier sourcing performance for an associate? How competitive is $200m+ sourced for UMM or MF PE/SM HFs/BSchool?, Prestige ranking among consulting firms
Bump
Staying anonymous for obvious reasons, but growth equity analyst programs can largely be categorized into 3 "tiers"-- higher tier firms are more prestigious and recognizable, and thus will offer more optionality/exits and higher pay. In your list, I'd say Bessemer is the only Tier 1 firm, JMI and Spectrum are Tier 2 firms, and the rest are Tier 3.
People in this industry are very nice in general as sourcing requires good people skills, and cultures can vary a lot from firm to firm. Growth firms can have somewhat lower return rates since sourcing isn't a skill everyone is great at, and re-recruiting after a failed growth junior summer stint can be somewhat difficult, especially at a less recognizable shop. Happy to dive deeper on any of that, but best of luck in your process-- hope this was helpful.
Thanks for this, I have a couple follow up questions.
Is the difference between a "Tier 1" and "Tier 3" firm that big? Like do the exits and reputation differ that much? And are these tiers widely accepted classifications inside the industry or from the outside looking in?
People are generally reluctant to outwardly speak poorly of other firms given how small the industry is, but yes, among the analyst programs at least, these tiers are fairly well-known by those in the industry-- obviously, there will be debate at the margins.
The differences between a Tier 1 and Tier 3 firm are pretty big-- pay, for example, will likely be 50-75% more at a T1 vs T3 firm for the analyst program. In addition, moving strategies or upstream in terms of fund size from a Tier 3 firm is difficult, while Tier 1 firms give you more access to mobility across fund sizes and strategies. The difference between a Tier 3 Growth Equity seat and a Tier 1 Growth Equity seat, at least in my opinion, is much larger than the difference between a MM and EB Investment Banking seat.
Other poster is wrong on tiering system. Maybe Bessemer is more well-known in the venture community, but JMI, Turn/River, Long Ridge, etc. all have subsequently raised larger funds based on strong performance in earlier funds.
Of these funds, don’t take the other poster’s advice on prestige. Anyone in growth equity at any decent shop would know these names and have a chat. Many also have good b-school exits as well (eg HSW).
You should evaluate what you are going to spend your day doing and how much opportunity you have to learn. I would take a job at a smaller fund where you might learn all aspects of the deal process than a spot that will only have you cold-calling all day and only work on a deal if you get lucky.
FWIW I went from LMM growth to MF growth…have seen many others with similar paths. Always focused on learning as much as I could along the way.
Thanks for this. Did you start as an analyst at a LMM firm? Was it challenging to move funds later on when you wanted to?
And do you have any views or information you can share on how JMI, Turn River, and Long Ridge are looked at inside the industry?
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