Currently a second year analyst at an EB and researching firms ahead of on-cycle. Interested in joining funds people think are up and coming, the "next Thoma / Vista - tier" funds, to the extent they exist. In other words, which funds today are most like where Thoma / Vista were ~5 years ago? I'm speaking more from a size / returns / growth trajectory perspective, and doesn't necessarily have to be tech. A few of the firms I've been looking into are below, along with my thoughts - please let me know if any other recommendations and if I'm totally off base. Thanks!
Already massive, nearing MF
Insight Partners (latest fund $9.5) - pros: great returns, software space will likely continue to have strong tailwinds, fundraising now for $12 bn fund. Cons: Large team / established platform = limited upward mobility, heavy sourcing at the junior level
(latest fund $10) - pros: returns, successful niche in operationally intensive, distressed investments. Cons: culture, not sure how much bigger a "bottom feeder" fund can get
(latest fund $8.5) - pros: very established name, strong returns, interesting mix of growth and traditional buyout, fundraising now for ~$12 bn fund. Cons: extremely large existing team, heavy sourcing at the junior level
Francisco Partners (latest fund $7.5) - pros: recent returns have been solid, tailwinds in tech sector. Cons: broad tech investing strategy will pin them with established tech MFs (SLP, Thoma etc) and not sure how much more appetite there is among LPs for these types of funds, historic returns have been volatile
Clearlake Capital (latest fund $7) - pros: great returns, unique strategy with flexible mandate across cap structure and growth / distressed. Cons: increased interest in preferred / minority investing may reduce effectiveness of strategy, recent fund performances difficult to gauge given frequency of fundraising
Veritas Capital (latest fund $6.5) - pros: stellar returns, successful industry focus in gov services / HCIT, read they would be fundraising again in H2 2021 for presumably ~$10bn fund. Cons: niche industry (may be offset by move towards more non-gov tech), recent fund performances difficult to gauge given frequency of fundraising
Genstar Capital (latest fund $7) - don't know much about these guys except that they have great returns, strict focus on MM type deals, fundraising now for $10bn fund
BDT Capital (latest fund ~$9) - limited information here as well, but know that they have grown a ton recently. Not sure on growth outlook given constraints of focus on family businesses and investments in "old world" economy businesses like consumer and industrials
KPS Capital (latest fund $6) - pros: stellar returns, value creation from high operational involvement, 30% inventive fee indicates strong LP interest. Cons: unsure if highly operationally intensive, distressed fund is scalable to $10bn + territory, invest exclusively in "old world" industrials businesses that may not be the sexiest
Established firms with strong brand name with decent returns in the past few years.
, TH Lee, Golden Gate, Oak Hill, MDP, Berkshire, Welsh Carson, etc