What is top-tier sourcing performance for an associate? How competitive is $200m+ sourced for UMM or MF PE/SM HFs/BSchool?
I am trying to get a sense of how my profile and performance would be looked upon should I try to recruit to an upmarket fund, move to a HF, or look at BSchool. With the proliferation of BD/sourcing-focused roles in LMM/MM PE over the past decade+, I would assume there must be some benchmark or way for people to gauge a candidate's relative performance and value-add as a potential hire for generating dealflow. Unfortunately, there aren't many resources or helpful threads on WSO/Google I could find that cover this topic.
For context (some numbers slightly changed for anonymity):
- 27 y/o, non-diversity, semi-target school, business major, 3.4 GPA (lots of side hustles/internships I was more focused on vs classes)
- 6 YOE, 3rd year ASO working for a $1b+ AUM, sector-focused fund (GP is ex-MF) w/ avg. check size ~$50m-75m, investing across NA/EU
- Exp spans both sourcing and execution (time allocation I'd say 80/20). Have sourced 2 deals (executed 3) to close in my career so far with each deal stepping up in terms of the size of the target. All "proprietary" in that I independently built the relationships with bankers who intro'd us (non-sellside processes) or emailed the founders and got 1st contact myself.
- 1st deal was a $30m buyout ($10m+ rev company) at my previous job, off market 1-to-1 deal w/ no other bidders
- 6 months into this job sourced a ~$60m buyout which we unfortunately lost at final bids to a competitor ($20m+ rev) where it's become a platform they've executed 2-3+ add-ons to, off market in that there was no advisor but there were a few other bidders involved
- 18 months in closed a $30m minority investment into my 2nd deal ($20m+ rev), off market 1-to-1 deal w/ no other bidders
- Another minority deal I got us first looks at 10+ months ago ($30m+ rev, $50m+ check), before it was banked, was recently invested in by a top quartile fund which to me signals it would've been potentially worthwhile had my team not disliked some operational aspects (not an operational-heavy fund and it seemed more work was needed than we had resources to support)
- Currently in various stages of DD for several more deals I sourced over the last 2 years (IOIs accepted, all $40m-60m+ rev, checks from $20m-$150m+, mostly off market 1-to-1 deals) and I anticipate we close at least 2 before EOY barring any skeletons/disagreements post-LOI
- Should we close at least 2 of the above in the next 6-8 months, I will have sourced ~$100m-200m+ in equity deployed in ~4 years. If we close all of the above (Hail Mary, wishful thinking but still possible) it will be more like ~$200m-300m+
- Anecdotally with respect to public markets, I've run a PA of 3-4 long concentrated names at any given time + a handful of opportunistic shorts/option plays for 5+ years which has grown >10x to be worth low 7-figs. I recognize this isn't performance (i.e. luck) I can bank on being taken seriously by professional public market investors given the ridiculous environment the last 3 years and unseemly risks I've taken, but I think it speaks to my interest in the discipline and will get me at least some nods for the amount of research I'm capable of doing when looked at in combination with my deal exp
I know moving upmarket in PE is extremely difficult, perhaps something more achievable if I went to BSchool and got a better pedigree. My targets would be mostly M7 barring H/S (assume my GPA 100% kills my chances there) as well as a few lower tier programs I believe I could get full scholarships for. Practice tests estimate my GMAT would land in the low 700s and with diligent prep I am confident I could score 750+ (anecdotally my SAT was 98th and ACT 93rd percentile w/ genuinely no prep, SAT taken twice and ACT once).
Looking at HFs my preference would SMs with mid to long duration hold periods, sector-focused approach.
I don't have any people outside my firm that I can talk about these sorts of things with on a personal-level, so apologies if my questions are unstructured or more stream-of-consciousness. Thank you very much for any advice/input more experienced monkeys are willing to share!
Can’t provide a super helpful answer here but no one is going to evaluate you based on $ deployed - that’s basically just showing how big of a fund someone works on it and is meaningless to their own ability.
People will care far more about the total number of deals sourced and, most importantly, how those performed. If you sourced a 5x, that’s a lot more impressive than someone who sourced a much bigger company that flopped.
Unfortunately, I can’t think of an UMM/MF that will care. No large cap PE fund is really able to reliably source their own deal flow, it’s all banked at a certain size point. So while sourcing can be super valuable in MMPE, growth, or VC, people at MFs typically just don’t put the same premium on sourcing
Very fair point! I wasn't sure what other metrics besides this and # of deals could be used to estimate "performance". I would assume it's somewhat harder to source say a $30-50m or $100m deal vs a $5m-10m deal but perhaps that's my own inexperience giving me that impression.
Now in terms of performance, obviously it's important to measure the IRR/MOIC from entry to exit, but given how long that can take would it also be worth noting interim features e.g. has the company consistently met/exceeded forecasts/budgets, has it executed & successfully integrated add-ons, has it made valuable C/VP-level hires, etc.?
This was actually helpful so thank you for commenting. I do realize that many of the larger funds rely more on banked opportunities vs independent sourcing, but I have been told anecdotally from my GP and through them some of our LPs (other senior PE professionals) that being able to relationship build/source is still a critical skill for anyone that wants to make it to the partner level at larger funds, since it's what lets you get first looks at some opportunities and every once in a while get significant sized ones off market (some founders just dislike/distrust bankers when it comes to their 1st big liquidity event). They made a name for themselves at their MF by sourcing a large deal that subsequently generated the lion's share of their net worth. It being a proprietary opportunity vs a banked process was part of what differentiated them to be able to go out and manage a significant amount for a 1st time fund as initially a solo GP (today 5 IPs).
Barring my anecdotal conversations and just thinking out loud though, if the UMM/MFs don't put any premium towards sourcing then what do you think differentiates the rare candidates that do make that transition upmarket, whether from downstream PE or non-BB/EB banking?
I work in sourcing with a very similar background to yourself, started in execution then moved to sourcing.
As the poster above me mentioned, proprietary sourcing isn't a needle mover for UMM/MF as most deals are banked. However, if they have a roll-up strategy the sourcing experience could be valuable at UMM port co.
From what I have seen you are given more credit for deals sourced directly vs. through a banking intro.
If you want to stay sourcing focused framing your experience based on equity deployed is fine. If you want to move into something investing related you should focus on the deal returns and your involvement in identifying operational levers etc. during diligence.
Curious on comp - are you paid on deals closed or regular PE base + bonus structure? Feel free to shoot me a DM if you want to take offline.
Currently a VP in Sourcing at a ~$5B fund. Have been in the role for 6-7+ years. Sourced $500M TEV across 6 deals.
I think the "headline" number of sourced $xmm deal is going to be meaningless unless you can back that up with some color. There is no benchmarking for sourcing performance as the street doesn't publish who sourced what deal in an official manner. However, it should be a reinforcement/talking point in your resume to highlight the way you segmented the market, identified a thesis, and executed on it by building relationships and generating deals. It's impressive at your age that you even sourced a deal - so craft a story around why this role personally motivated you and how you excelled in it.
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