PE Firms With an "Moat"
Question for all the PE guys and gals out there. We spend our day looking at industries / companies, trying to identify companies with 'competitive moats' in attractive industries that have sustainable edges that allow them to preserve or grow their earnings power over time. Clear examples are tech companies that directly benefit from 'network effects' - Google, Facebook. It will quite literally take an act of the United States government to break up the de facto monopoly that is Google because the business model and the nature of network effects in the tech industry is extremely difficult to overcome.
So let's look at the PE industry. There is literally mountains of capital out there - and many new funds. Barriers to entry - while not as low as theworld - aren't particularly high either. So my question is this - what are the firms with actual competitive moats? A lot will market their executive network, proprietary deals, sector expertise, but at the end of the day the majority of these firms are participating in wide auction processes where definitionally winning a deal means you decided it was a good idea to top the bids of 10 other highly savvy buyers at the high point in an extremely long bull run.
What does a real competitive moat look like in PE world? Some thoughts to get things started:
Actual deep sector expertise / network / sourcing -(tech) / Vista (tech) / (tech) / (consumer) / TSG (consumer) / Welsh Carson (HC) -?
Investment strategy not focused on broad auction / buyouts - Apollo
AUM scale to the degree where literally only a handful of funds can compete based on deal size / equity check being too big -, , Carlyle, H&F, EQT, Cinven, Advent - ?
What have you guys and gals seen out there in terms of sustainable competitive differentiation among buyout investment funds?