Private Equity in London - US MFs vs European Funds

multi678's picture
Rank: Baboon | 158

Hi guys! In a recent thread, a discussion regarding PEs in London came up that, imo, deserves its own thread.
How are the top European funds perceived in comparison to the US MFs that are regularly described as the pinnacle on this forum? While the top candidates still seem to go for the known US names (KKR, CG, BX...), top EU firms such as CVC, EQT are regularly outraising them when it comes to European-focused funds. E.g, the European funds of Bain, KKR and Carlyle are all around 5bn whereas CVC has raised north of 15 and a number of Europeans are targeting above 10bn right now. Are those differences less relevant given that the US firms might also use their flagship funds or why are they still perceived as superior?

Comments (19)

May 3, 2019

Perceived in regards to what?

May 3, 2019

General prestige, exit opps to HFs/B-School and potentially perception regarding pay

Array

May 3, 2019

US>EU funds although for long term PE EU funds seem to be better, ie do not need to leave to get an MBA etc.

May 3, 2019

Agree that the usual US megafunds (KKR, Apollo, TPG etc) carry more prestige and provide better exit opps to HF/other PE shops although the performance in Europe of some has been abysmal (Carlyle, TPG, Blackstone, WP, think also Apollo) over the last few years. The only possible exception is possibly KKR who are now raising a new EU5B European flagship fund. CVC, EQT etc have performed far better but for some reason the junior people there seem to be of a slightly lower caliber than the MFs in my perception.

May 3, 2019

Performance doesn't matter at the junior level. It seems to me that the reason why they struggle is that they churn through partners brought in from the US and they don't fit the EU culture. There is a lack of grown partners from EU associate classes at US funds. Except maybe for KKR/Carlyle Tech.

May 3, 2019

Speaking of Euro funds: thoughts on Permira?

  1. What is their strategy? How do they differentiate in the market?
  2. How successful have they been recently, specifically their US operations?
  3. How is the culture? Have any of you worked with them?
  4. What is the associate experience like? Generalist? Are deal teams staffed cross-border?
May 3, 2019

1.usually a very sector specific focus
2. They recently exited magento - an 8x deal over 3years. I'll let you calculate the IRR...
Can't answer for the rest

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May 3, 2019

Thank you. Appreciate the response.

May 9, 2019

bump

May 9, 2019

check this other thread

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May 3, 2019

How difficult would it be to transfer internally at the US MFs, so going from London to New York?

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May 4, 2019

Very very difficult. Spots as associates are horribly competitive and even worse post MBA. Getting promoted is your main focus not transferring. At the MD level it might be doable although you need to have a network that allows you to move from a side of the Atlantic to the other.

May 4, 2019

Is there a realistic pathway to change offices by doing an MBA? 2/3 years MF London -> US MBA (ideally HBS, GSB, Wharton - potentially including Summer Associate Role at the firm) -> MF NY

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Most Helpful
May 4, 2019

Just few clarifications on the above. Visa sponsorship may not be an issue if you have been with the firm for at least 1 year as you can transfer with a L-1 visa.
I think one main point that has been missed so far is that post promotion people do not want to change location. Generally you are 30ish+, engaged, sometimes with children, etc. and you do not really want to transfer your life from one continent to the other, so I am not sure it is an issue of demand / supply but it is probably related to the fact that generally people do not want to do it and therefore funds are generally not structured for this.

On the same topic, sometimes you have been covering companies on this side of the pond and you don't want / are not allowed to give them up before the exit but, by the time of the exit, you have another portfolio company or are engaged or have other family / personal reasons for which you do not want to make the move.

In terms of precedents, Hg Capital and Bridgepoint moved people from Europe to US when they opened the office in NY, Verlinvest moved people from London to Singapore to New York (they have Vita Coco there) in the past but it is generally rare and event driven.
I'd be interested to know whether PE that do secondments to PortCo (e.g. Apax) do this across Continent.

Finally, I'd echo the above. If anyone wants to make a move between continent, you should do it before starting in PE (i.e. either at banking level, but be mindful of the VISA issue as from Europe to US they transfer you with L-1 and you are not allowed to change job) or when moving out of banking (i.e. people recruited from US to Europe - not aware of other way round because of visa issues).

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May 4, 2019
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