Rapidly Growing UMM Funds

Does anyone have insight into culture, exits, perception, and general work quality at the handful of MM firms over the past few years that have grown rapidly over the past few years to become solid UMM / potential MFs? Names like Francisco, Clearlake, Veritas, AmSec come to mind, all having raised funds in the solidly UMM range.

Could anyone comment on what it's like to join these places now and what career profession looks like?

Comments (9)

 
  • Prospect in IB - Gen
Jan 11, 2021 - 1:23pm

Asking in the context of being in offer stages with one of the aforementioned funds and in early stages with a larger MF. Wondering if worth it to attempt to leverage on a career progression / opportunities perspective

 
  • Associate 3 in PE - LBOs
Jan 11, 2021 - 2:28pm

Exit opps from MFs are marginally better than those funds due to brand, better b school and HF exit opportunities. UMMs with strong fundraising trajectory often have clearer path to VP promotion which may be attractive. Experience and overall deal flow will likely be strong / comparable to MF. Geography is also a factor with a couple of the funds you mentioned being west coast based. 
 

If you get an offer, you can leverage it to accelerate the MF interview process. I would not turn down an offer from francisco without several MF interviews lined up. 

 
  • Prospect in IB - Gen
Jan 11, 2021 - 5:04pm

Thank you. In your opinion, would there ever be an argument to take one of these quickly growing UMM funds over a MF? Understand the inferior brand value of the UMMs broadly, but it seems plausible that these funds enter MF territory soon with their subsequent fund raise, putting you at the inflection point of their next phase of growth. Or do you not see that as a likely scenario?

 
  • Associate 3 in PE - Other
Jan 12, 2021 - 7:38am

 

Thank you. In your opinion, would there ever be an argument to take one of these quickly growing UMM funds over a MF? Understand the inferior brand value of the UMMs broadly, but it seems plausible that these funds enter MF territory soon with their subsequent fund raise, putting you at the inflection point of their next phase of growth. Or do you not see that as a likely scenario?

I'm taking certain private rapidly growing UMM funds over a publicly traded megafund most days out of the week.  Faster promotions, more carry dollars, (even with sold GP stakes) and less bureaucracy.   

The people who are in the need to know aren't going to knock you out of a process just because you came from Clearlake instead of Carlyle group

My old firm's fund allocation team probably respects Clearlake as investors over 75% of megafunds.

 
  • Associate 3 in PE - LBOs
Jan 12, 2021 - 9:42am

 

 

Thank you. In your opinion, would there ever be an argument to take one of these quickly growing UMM funds over a MF? Understand the inferior brand value of the UMMs broadly, but it seems plausible that these funds enter MF territory soon with their subsequent fund raise, putting you at the inflection point of their next phase of growth. Or do you not see that as a likely scenario?

- expand -

I'm taking certain private rapidly growing UMM funds over a publicly traded megafund most days out of the week.  Faster promotions, more carry dollars, (even with sold GP stakes) and less bureaucracy.   

The people who are in the need to know aren't going to knock you out of a process just because you came from Clearlake instead of Carlyle group

My old firm's fund allocation team probably respects Clearlake as investors over 75% of megafunds.

Depends on a number of factors.

 

If you're very confident you want an internal promotion without business school, then yes an up and coming fund may be as attractive as a megafund. However, many people overstate their confidence going into their associate program. Most associates that join my firm think they're lifers and then quickly burn out and move to b school/HF/Corp dev/LMM PE for better lifestyle. 
 

I would caution you against extrapolating that the next fund will be larger and thus the fund will become a MF over time. Providence and Centerbridge were once very hot funds and are now irrelevant compared to the household names. 
 

In general, I would take a high quality MF seat over any of the firms you mentioned. High quality MF seats, in my view, are firms like Blackstone, Carlyle, Warburg, H&F, Silver Lake. 'Lower' MFs like TPG and Bain may be more of a toss up versus a Clearlake, Platinum.

 

If you end up recruiting for a new role, as most associates do, you'd still rather have TPG on your resume as opposed to Veritas. veritas is still a very good firm and you should be happy to have an offer from there. 

 
  • Associate 3 in PE - LBOs
Jan 12, 2021 - 9:43am

Most associates that join my firm think they're lifers and then quickly burn out and move to b school/HF/Corp dev/LMM PE for better lifestyle. 
 

I would caution you against extrapolating that the next fund will be larger and thus the fund will become a MF over time. Providence and Centerbridge were once very hot funds and are now irrelevant compared to the household names. 

Very good wisdom. I wish someone would have told me this as an Analyst. Come to think of it, I'm sure someone did tell me this; I wish I would have listened

 
  • Prospect in IB - Gen
Jan 12, 2021 - 11:44am

Thank you, that's helpful. You seem to be making a distinction between Clearlake and the other funds listed being a toss up between the "lower" MFs - is there a particular reason for that?

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