I'm saying this from the outside in as I work in the syndicated loan market, but for Clearlake at least they fundraised in 2020 and then redirected all that money to sectors with a lot of lofty valuations. Those investments largely haven't performed and the valuations have come down- it takes two minutes on a terminal to see that a lot of their portcos have debt trading below 80. Also a double whammy they bought a CLO platform which took down large slugs of their term loans for these companies.

 

Not a direct answer to your question, but it does feel like this topic is usually way overdramatized on this site. Absent some severe organizational decay the pool of capital out there is generally large enough & growing. The tech funds that way overrotated in 2021 (Insight, Silver Lake) will have a tough vintage but LPs know the long-term tech opportunity remains compelling. Similar story to the megacaps that had difficult 08s (TPG, Bain, Warburg, etc) who have minted strong enough track records since. The cases of true “funds going downhill” you usually know when you see (key man departures, not raising for 5+ years, not actively deploying, etc.) 

 

Yeah this is the right approach to this question. When people on here call out Warburg/Bain for going downhill, I just laugh. Those firms aren’t struggling, quite the opposite.

Agree with that one of the best indications a firm is struggling is leadership leaving. Look for that. Partners in a firm obviously have the best perspective on what’s actually going on. Interns on WSO saying that a firm with a 30 year track record of success is going downhill because consecutive funds were the same size sound so stupid.

 
Controversial

Bain is undeniably a much less desirable firm to be at than 10-15 years ago. That’s the definition of going downhill. And it’ll continue on that path

 

Completely unsure on this, but I’ve heard negative things about Whitehorse, Instar and Onex (which I was surprised of). Anyone care to provide additional colour. Once again I’ve never worked at any of these places, just have heard from the grapevine so someone please correct me

Reasons for negative takes:
Whitehorse: returns have been poor
Instar: struggling to get deals
Onex: lacking the investor talent they once had

 

Whitehorse/Dawson is a marketing machine but not a place you go to if you're a serious investor and want decent returns. Culturally they're one of the worst out there and have brushed under the rug serious issues like allegations of sexual harassment, which naturally lead to one partner joining a no name competitor.

 

When they're doing turnaround deals looking for diamonds in a pile of shit, they're gonna smell like shit. Should not have worn those white pants

 
Funniest

"Experienced management team with decades of experience and a killer instinct to drive results"

 

Agreed… firm is a mess across the board. Significant senior departures over the last 6 months alone.

 

CCMP's CEO Stephen Murray passed away in 2015, which led to other senior departures from the firm. They were trying to raise Fund IV in 2015 but never ended up closing a fourth fund. Eventually they raised a continuation fund as they wound down the firm as it was. Some members of the remaining team recently launched CCMP Growth Advisors.

 

Carlyle is a mess.. CEO left given battle with founders and serious succession issues.. also over indexed to China so Asia portfolio is struggling and they have been laying off people.. way behind on fund raising and will likely be the only MF to raise smaller funds

among those who over extended in 2021, I would put Vista, Insight, TCV, Hellman and Silverlake to some extent in the same bucket.. they will seem fine for now but the next fund is going to be half the size and partners will leave 

 

Agree on Carlyle. Low performance, high turnover, significant layoffs, terrible fund raising, and succession issues. The firm is a complete mess, especially compared to other MFs.

Disagree on most of your tech names. For example, Vista wasn’t even included in top 10 Capital deployment for 2021 as they focused predominantly on exits. Whereas TB and KKR tech put record amounts of Capital to work at ridiculous valuations. Although I still feel confident in their ability to produce decent returns at least. I definitely wouldn’t consider any of those names “downhill”.

Insight might be a different story…

 

Also agree on Carlyle - they are absolutely already down the hill, definitely a shell of what they once used to be.

Like comment above, also heavily disagree with randomguy's tech PE firms. Not sure if it was just funny timing, but to refute "they will seem fine for now but the next fund is going to be half the size and partners will leave", Vista just raised their largest ever flagship at above $20B LOL (https://www.blackenterprise.com/vista-equity-raises-twenty-billiion-fun…). So that's simply wrong. Maybe just Insight because of their shitshow recent fundraise, but wouldn't take that and apply it to Vista, H&F, Silver Lake etc.

Valuations were absolutely crazy in 2021, and yes, some firms overdeployed and overpaid. For example, TB's $24B flagship vehicle is screwed, as of right now, because of how much of it they deployed at sky-high SaaS valuations, whereas Vista and H&F stayed much more disciplined and won't face that problem to the same extent as TB (in fact, Vista and H&F focusing more on exiting in the 2021 valuation environment has helped them, if anything).

The only thing that is even somewhat agreeable is Insight struggling for the next few years, and yeah Silver Lake has been quite funky recently, to say the least. But all of these names are top of Tech PE and PE in general, and are not going anywhere anytime soon.

 
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Many of the firms I've come across have been mentioned but I'd say the following:

  • Siris Capital: in wind-down mode and won't be raising any more funds. They were last in market end of 2022 into 2023 but have a number of 0's in their portfolio and laid off a bunch of staff
  • One Rock: currently stuck on $900m on a $3.2bn target. By no means shuttering such as Siris above but they're in prove-it mode to LPs. Their previous fundraises usually closed in <6 months so this 2+ year fundraise must come as a shock to them
  • Middleground Capital: once high-flying industrials / business services player that started expanding into ESG, London, random strategy funds. LPs finally waking up and pressing Middleground on realizations and exits before they back any of these new side projects
  • Onex: broader platform is essentially collapsing into itself. Tried to launch an infra fund last year and that's been put hold indefinitely
  • Vistria: another former high-flier focused on healthcare, education and financial services. Raising 5 funds in 10 years. Stuck on their current fundraise at just slightly under their prior fund size. Nothing to sneeze at and certainly not done for but coming down to earth...especially if Trump is re-elected as their entire platform is very heavily left-/Democrat-leaning. They've hammed this up a bit too much imo and will really be a problem if Republicans hold strong this time around
  • Linden: established healthcare player weighing minority sale. From what I've heard, performance has fallen off. No successful platform is really going to consider GP stakes unless it's either in trouble or really looking to launch new strategies/ need the capital infusion for something meaningful. Linden...is not that. 
  • Brightstar: just closed on $1.26bn...whereas the last fund was $1.27bn. That must've been painful. Again, similar to some of the firms named above, it's certainly not catastrophic but this isn't a good sign. They've also had a lot of turnover and LPs have complained a lot about nepotism (more than you would see normally) and they also pushed out their President last year
  • Providence Equity, BC Partners, Astorg, etc.: all fairly sizable names that had good brand recognition / aura but have fallen off quite noticeably in recent years
  • GIP: was struggling to fundraise and pushed out their flagship final close and was still dragging. But as we all know, senior team has since cashed out by finding a greater fool in BlackRock. I think infra will struggle to raise (despite all the paid-for buzz you see in the news)