Prestige Rankings Thread - PE firms

Trying to do my part to keep this community as toxic and as defeating as possible. Would love to hear some arbitrary rankings on PE funds and how they reflect on the value of kid's lives to make analysts that got the PE equivalent to UBS/DB from on-cycle recruiting feel like a colossal failure.

Even though you might have bagged one of the highest paying jobs in the country for a 24-26 year old, let's be honest if you didn't get KKR/TPG/Blackstone might as well accept M7 is out and the homeless shelter is in. Going to need the brilliant WSO brain trust of interns and prospects especially to chime in on this one.

 -King Kong

Edit: Also, goes without saying-make sure you include tiers. Want some UMM kids to really know their place.

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Comments (109)

  • Analyst 1 in IB-M&A
Sep 19, 2021 - 10:07pm

hey guys college freshman here (ignore analyst 1 title, only using it to legitimize my other comments). I'll take a first stab

BX, KKR, Apollo

Hope this helps

  • Analyst 1 in IB - Cov
Sep 19, 2021 - 10:23pm

Tier 1: Apollo/ KKR/ TPG/ Warburg 

Tier 2: Bain/ Permira/ Carlyle /Thoma Bravo/ H&F / Silver Lake

Tier 3: CVC/ EQT/ Vista/ Apax / Advent/CDR /LGP

Tier 4: Clearlake / New Mountian / L- catterton

Enjoy going to Kellogg/ Sloan/ Booth/ Columbia Tier: Spectrum Equity/ JMI equity / Waud Capital (really could just lump all the Chicago shops here) / obscure Boston shops that have great returns, but low AUM.

  • Investment Analyst in RE - Comm
Sep 19, 2021 - 10:54pm

H&F no matter which way you look at it should be tier 1

No reason for them to be tier 2 and tpg/warburg to be tier 1

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  • Analyst 1 in IB-M&A
Sep 19, 2021 - 11:05pm

Original poster here.

Monkey shit him and create your own ranking adding those in. Please scramble the middle tiers as well so future analyst 1's can make a decision based on your more credible post 5 years from now. 

  • Analyst 1 in IB-M&A
Sep 19, 2021 - 10:59pm

Sixth Street-Originally a part of a bigger firm (tpg) and spun off, hmm sounds familiar…

Sounds like Moelis for baking, obviously nothing to brag about, but you might still be in the runnings for the Mega-MBA on-cycle process.

  • Associate 1 in RE - Comm
Sep 21, 2021 - 5:32pm

If you don't think this is the funniest comment on this thread take a step back and literally fuck your own face

Controversial
  • Associate 2 in PE - Growth
Sep 21, 2021 - 2:45am

Certified official® b-school prestige ranking for generalist PE (lumping together buyout and growth):

Tier 1a: US Mount Olympus (Apollo / BX / Carlyle / KKR / Bain / H&F / Silver Lake)

Tier 1b: European megafunds (Permira / CVC / Apax / EQT) and US demigods (TPG / Warburg / Advent / CDR / Vista / Thoma Bravo)

---Past this point, Wharton still basically guaranteed but H/S becomes tougher---

Tier 2a: Value/credit-DNA shops (Oaktree / Ares / Centerbridge / Fortress / Cerberus) and top growth (General Atlantic / Summit / TA / Insight)

Tier 2b: Banks trying to break into PE (GS MBD / MS), Canadians and sovereigns (CPP / OTPP / Mubadala / GIC / Temasek), some top UMM names (Berkshire / GTCR etc)

---Past this point, H/S becomes a small miracle, W is hard, but M7 still decent odds---

Tier 3: Rest of MM buyout (HIG, Bridgepoint, TH Lee, MDP, Genstar, WCAS, Platinum, too many to list), SoftBank + a few others on the growth side

---Past here, M7 odds are like at one of those companies which actually makes products, like Coca Cola---

Tier 4: Anything with <$10bn AUM 

Tier 5: Anything with <$1bn AUM

  • Associate 2 in PE - LBOs
Sep 21, 2021 - 8:51am

There is also no way any one would prioritize a GS PE or even Cerberus / Fortress over Genstar / Platinum / GTCR. Those are all top sponsors with funds approaching MF size with killer returns. 

  • Intern in PE - LBOs
Sep 21, 2021 - 5:17pm

Do people actually target SWF exits from IB? I was under the impression regular buyout PE is considered "better" since it's 100% direct investments, but I could be completely wrong…

  • Associate 2 in PE - Growth
Sep 23, 2021 - 12:41pm

More common now than before ever since the direct teams were scaled out - all the people I know at SWFs do 100% direct. I think they're competing decently vs. MM funds for talent, considering junior pay is in-line with most MMs (mid-200+), good hours, huge AUM, and big institutional brand helps with b-school. On the tech side the exposure is decent, since these guys are some of the most active in terms of leading growth rounds.

That said most buyout/growth funds are still considered better than SWFs overall because uncompetitive pay progression = senior talent usually not as good. I think the verdict is: good option for pre-MBA 2-year stint all things considered, but if you want to pick a spot to lean into investing post-MBA, probably avoid. This applies to places like SoftBank too for similar reasons. Junior talent seems good to great, but when you look at the MD-level, you'll find a lot of questionable profiles. 

Most Helpful
  • Analyst 2 in IB - Cov
Sep 22, 2021 - 9:43am

Directionally agree with tier 1, but a couple of thoughts below. 

1. Would move GA to tier 1b, think it's a top growth shop and understand there might be a slight discount to growth relative to buyout, but it's clearly best in class and ahead of other players in the space. Bain Capital, I would move down to tier 1b; despite strong political heritage, think there has to be a consideration of recent performance (not great) as well as location (Boston), which would warrant a minor dip. 

2. Would add another list of UMM names as tier 2a and drop everything else down one. Think the strong UMMs that stand out to me are GTCR, BDT, LGP, New Mountain, Veritas Capital, Francisco Partners, MDP. Not sure why there's this point of "H/S becomes miracle / W is hard" for GTCR; just search on LinkedIn and you'll find most folks are able to land H / S with the occasional W. 

3. After the above move, would put MM buyout ahead of banks trying to break into PE into a new tier 3a, and move the banks / sovereigns into tier 3b. Think GS MBD is far less attractive than say, a Platinum Equity or Softbank (both of which could be arguably in tier 2a) in terms of flexibility of investment mandate. Not really comparable here. Other notable names for MM buyout / tier 3a, I would add here are Amsec, HIG, L Catterton, Audax, Genstar, Lindsay Goldberg, and Abry Partners. Though it's a very different mandate, would put the growth equity arms of buyout firms in this tier with respect to prestige (ie. KKR Growth); folks in industry typically strongly prefer doing growth at a pureplay growth player such as GA rather than a MF growth arm. Just a function of track record / clear focus. 

5. Would definitely move down the value oriented firms (Oaktree, Centerbridge, Ares, Cerberus, etc.). Just look at the fundraising track record of these firms as well as performance in past 15 years; pretty much all of them have downsized relative to their 2006 / 2007 vintages. Generally have not done very well on a returns basis in recent years and have had pretty clear difficulties in fundraising (Cerberus / Centerbridge the clearest examples of this). That said, they do have a fair amount of heritage historically and definitely targets for many of the restructuring folks on the forum. Open to thoughts on this one

  • Business School in PE - LBOs
Sep 22, 2021 - 12:18pm

Good expect THL sends associates to H (and W) every year so calling it a miracle is a stretch. 2 out of 8 outgoing associates just started at H. Another at W. Not all targeted bschool. +1 SB for good comment overall.

Sep 26, 2021 - 3:44am

Curious on the thought process behind ranking SoftBank tier 3 given they have the biggest fund in the world? Haven't found too much about them on here and would love some to know more if you know more about them. I've heard they changed their strategy for Vision Fund 2 and it's a much different place now

  • Associate 2 in PE - Growth
Sep 26, 2021 - 8:47am

Softbank isn't a bad place by any means, but I work in growth and within our circles they are considered a tier 3 operation. Some of this might still be hangover perception from the big Ls they took, deals they backed out of last minute, and nightmare politics stories from inside the firm, etc. But regardless, the way they invest is seen as a low-IQ Tiger Global if that makes sense. Scrappy DD and valuation insensitive - similar to the SWFs but with the bad press a SWF wouldn't have.

If you want to size up the firm you should look into the people at the very top. In Softbank's case it's a lot of questionable profiles for a "fund" of its size: former S&T, CVCs, tier-3 funds, ex-lawyers, etc. They clearly couldn't get any actual tech investing talent to lead the shop (unclear whether because of pay or reputation), and that sort of inexperience trickles down and affects everyone. I wouldn't be surprised if some of their VP-level hires actually have more investing experience than their managing partners. Anecdotally, I knew 2 associates who went there - 1 already got out and the other is trying to.

  • Analyst 2 in IB - Cov
Oct 5, 2021 - 1:24pm

I think it depends on which UMM PE fund and what its track record is. There are a good number of UMM funds that have had great historical placement into H/S with the occasional W (ie Berkshire, MDP, GTCR). This would likely be because the folks from that fund have gone to the school, done well (by way of performing well academically, and being involved in the community / extra-curricular clubs), and maintained good relationships with the school. I know of UMMs in which H/S adcomms would show up and talk to the firm about the program, and that's clearly an indicator that the firm is a feeder. 

That said, I think the flip side of the coin is that the ORM UMM / MF PE bucket is probably the most competitive to apply out of from a stats perspective. Ie, the average applicant will have a 3.8+ at a target school with a 760 GMAT score and BB / EB / MBB prior experience. I think it would be likely easier from a stats perspective to apply out of the consulting pool, which is still highly competitive, though I think less so than the PE pool (ie GMATs might be closer to 730 range rather than 760). 

Certainly, I think getting into one of your top choice MBA programs is important, but I think the other things to think about are genuine interest / passion, earnings potential, as well as optionality. If you love the buyout investing side of things or want to have the potential to earn absurd amounts of money via carried interest (assuming meaningful carry / decent fund performance), then you would be crazy to stay in consulting and try to move to PE at the post-MBA level (which is nearly impossible without pre-MBA PE experience). However, if you enjoy the operational tilt of consulting, like the people / firm culture, and can see yourself staying at the firm in the long term, it would likely make more sense to stay at the firm. 

  • Intern in IB - Gen
Sep 30, 2021 - 6:36pm

Personally know someone at a tier 4 firm based on your rankings that is currently at GSB. Is PE placement really that important for MBA?

  • Analyst 1 in PE - LBOs
Sep 21, 2021 - 10:21am

the only shop that matters is the one that you love in ur heart :) 

  • Associate 2 in PE - LBOs
Sep 21, 2021 - 2:16pm

Disgraced Icarus of a PE firm that tried global expansion but couldn't hack it (shuttered their HK office). Had one of the greatest failed LBOs of all time (BCE takeover). After a $12bn fund with a mid single digits IRR they downsized to $5bn. Bought a daycare in the Netherlands that eventually went bankrupt. Myriad other stories of poor decision making. Resorted to going downstream instead of upstream with PSG. The PSG team I believe is actually decent but just goes to show the classic old school guys had to raise AUM by bringing in other people who could invest better. Icing on the cake: terrible culture. Really a shame too, because these guys have a sweet mandate (Education and Media/Comms). Jonathan Nelson is the richest guy in Rhode Island. And I'm the tallest guy in my living room.

  • Analyst 2 in IB-M&A
Sep 21, 2021 - 10:42pm

Holy shit just took a look into this. $4bn fund raised in 2005, straight to a $12bn fund raised in 2007. That 2007 fund returned an IRR of 5.7%. Brutal.

Looks like a 2012 5bn fund returned 22% IRR and they just raised a 6bn fund in 2019 so who knows. Maybe they just sized up too quickly?

  • Analyst 1 in IB-M&A
Sep 21, 2021 - 9:57pm

MF's are extremely overrated. Work as many if not more hours compared to IB, and make less compared to an Associate at an EB. Have 0 chance for internal promotion as well. Worth it for the brand name on resume? 

  • Analyst 1 in IB-M&A
Sep 21, 2021 - 10:27pm

You do know there is only one way to measure success right? It's WSO's opinion of a fund-not a funds returns, your individual economics/ salary, actual B-school placement, location preference, or an individualistic balance of work you find interesting, salary, and work-life balance. All that matters is megafund PE placement for the Mega-MBA, so you then can go right back to being a post MBA associate, which will be exactly like shark tank where you are Mark Cuban and everyone else is kids that just couldn't hack it. 

  • Intern in HF - Other
Sep 21, 2021 - 11:00pm

Thoughts on infra funds like GIP/Stonepeak/Brookfield? Will they belong to tier 1?

  • Associate 1 in PE - LBOs
Sep 24, 2021 - 9:15pm

Don't disagree and am very biased - will acquit - but could also argue that other than your generalist strategies, stuff like Silver Lake and tech-based funds should also be weighed down as their growth/attractiveness is similarly a "presence of the times" dating from the 2000's and internet/SWE/FANG/derivative (stuff like Salesforce) exploding in market cap and therefore creating a larger market opp. 

Infra has increasingly become more versatile with places like Sidewalk doing tech-adjacent infra, hard assets having more first derivative stuff available to invest in (what Apollo's NR group focuses on) and more flexible mandates where investors look to infra funds to invest in things with "infra-like" characteristics. 2020 was a massive year for infra - $100bn fundraised across some of the biggest brands. BlackRock (big brand name, big presence in infra) had a $5bn climate fund raised last year - that's low end UMM-ish if we're going by the book and yet completely dwarfed by the rounds that EQT, ISQ, Stonepeak and KKR all had at ~$15bn each. All in 1 year. There are reports of Brookfield looking to raise a $25bn fund with GIP having done $22bn in 2019. If you compared the size of top infra funds vs top generalist funds and made a rankings list by latest fund AUM, infra would populate half of the top 10. Pay at places like GIP/Stonepeak rival and are definitely not less than the Tier 1's on this list across all levels. The polish/resume (blue chip school and bank) requisite to recruit inward is similarly prestige-gated.

Someone above posted that you need only 4 years to make principal at Apollo (in their non-infra/NR strategy presumably in this comparison) but 7 to make the same level at GIP. That conveniently ignores the fact that you need an MBA and then you need to re-recruit at Apollo to make that jump between 2 yrs as associate and 2 yrs as senior associate/VP. During those 2 "gap" years the person employed at GIP is going to be making at least $450k/yr+ while the Apollo person is not only not making money, but having to pay $150k/yr+ in tuition and housing. That's a $1.2mm delta with growth/carry/comp trajectory post-principal at both firms being very similar afterward. This doesn't even include the opportunity cost from carry that you start accruing as a year 1 senior associate at both GIP/Stonepeak; having even 10 bps in GIP's fund 4 at 12-15% net IRR would be 1.8-2.0x (say 1.8x) MoM aka 3.2bn * 0.010% = $3.2mm over 7.5 yr avrg vest period for a conservative $450k in carry/yr. The top shops in infra are mostly career track whereas you can't say the same for several Tier 1 generalist programs - forget the carry, the actual upward mobility is huge and goes unmentioned on a lot of the stuff I read on WSO for some reason when MF infra PE vs MF general PE is being compared. 

That being said I would generally agree in having top infra funds being 1b/2a just because a critical criterion in rankings is optionality and at the end of the day whether you're looking at things from an IB or PE perspective, generalist PE funds and RX (at top shops)/M&A banking have always been, and will continue to be, weighed the highest because exit opps from these places are the most versatile. 

Oct 3, 2021 - 2:44am

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  • Analyst 2 in IB - Cov
Oct 12, 2021 - 1:15pm

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