Thoughts on H&F and CD&R
Hey everyone. Just wondering what your thoughts are on H&F and CD&R ahead of the next cycle of recruiting. I like the people at both so far but can’t find a ton of recent discussion around these two firms. Currently a first year analyst
What is the general perception around these?
Any tips for landing an offer during the next cycle of PE recruiting?
What is it like to work there?
Both are $10b+ (talking about last raise) but other than that I don’t know anything. From what has been echoed on this forum H&F seems to have a tough culture.
And yes I get that Tully Friedman left in the 2000s to found a new shop. But point is that the firm remains focused on investing in quality businesses that have high cash on cash return potential. There was also a great article in the FT a few days ago about their current ceo
And yes I get that Tully Friedman left in the 2000s to found a new shop. But point is that the firm remains focused on investing in quality businesses that have high cash on cash return potential. There was also a great article in the FT a few days ago about their current ceo
Any idea when the next recruiting wave will be? Know some will come after new years.
H&F is truly amazing, one of the highest AUM per associate head out of any PE firms. Classic LBO shop but they "buy growth at reasonable price". Would absolutely love working for them they were one of my top choices but fortunately did not end up going through the process for on-cycle. Also a first year
What exactly do you want to know?
Both these firms are truly elite, with great track records and really smart people.
Their profile / set up is actually as comparable as it gets (3 offices vs. 2, AuM / employee etc.), however H&F focuses on higher quality (and more expensive) businesses, often tech or tech-enabled, while CD&R focuses on "old economy" buyouts (no tech coverage) although recently having expanded into growth.
The associate programmes in the US are fairly comparable, with only ~1 per class being allowed to come back as principal after finishing the programme and attending business school, however H&F recruits both consultants and bankers (bias towards the former) while CD&R recruits from banking only.
Both firms are among the best in what they do, which comes with pretty tough hours for the juniors (H&F more than CD&R). Certainly great gigs for 2 years, and then personal preference if you would want to do it full time (leaving aside the question whether you'd get offered a promotion in the first place).
quick follow-up question: what is your experience regarding the recruitment of Credit Analysts (special situation fund at Bain/CVC London/Park Square; entered after graduation), if such want to make the jump into Corporate PE? just asking bc i am in this situation.
cheers!
In terms of what?
It's certainly doable if that is your question, actually all shops prefer interviewing someone with prior buyside experience (assuming its from a reputable shop) over bankers/consultants, and headhunters drool over them - you are effectively competing with less than 20 candidates with similar profiles across Europe (many of whom don't recruit and just stay with their current firm in the medium/long term) as opposed to hundreds of bankers / consultants, have better investment judgment and showed your interest for investing early on. Further, I've seen plenty of bankers/consultants in London getting their experience discounted (i.e. joining 1-2 years below), which tends not to happen with buyside lateral hires (even from credit).
That being said, this only applies to the handful positions available at i.a. the funds you mentioned - the hiring risk from people at anything below blue chip funds is higher compared to bankers / consultants, as the experience is much less standardized.
In light of your situation, however, you will get all interviews you want, and then need to prove yourself in the interviews. Make sure to take those seriously, the bankers/consultants you will compete with typically have plenty of interview experience, which shows when doing the more standardized part of the interview process (e.g. 1-4 hour modelling tests). Make sure you nail those hygiene criteria, and then you should have no problem outperforming your peers by showing better investment judgment and more intuitive, in-depth understanding of businesses.
For CD&R - How large is each class of associates, and are the interviews pretty standard or are they different?
Any thoughts on the typical role of the associate? What are the hours, culture, day to day like?
Thank you for your thoughtful answers!
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Take a look at their websites. They have profiles for all of their investors including their associates. Think it's anywhere between 2-4 associates per year at each.
Both are great firms with gold-plated reputations and folks with the bluest of blue chip backgrounds. That said, lifestyle and hours are going to be tough, but again that's really not any different from other great PE firms.
H&F’s has a phenomenal investment track record/performance reputation.
Known to be some of the smartest/best investors.
They have a very narrow focus on high quality businesses where they don’t mind paying up if they see the value creation potential.
If you’re going in as an Associate, this is probably one of the top seats out there maybe after Blackstone. If you want to go to b-school, I’d look into placement as I have less color there. Hard to make a bad decision going there as an Associate.
On the post-MBA partner track I’ve heard it can be tough/frustrating because of the very narrow niche / high biz quality focus. It creates a very high hurdle to get deals done and there’s ALOT of boxes that need to be checked in an uncompromising fashion. This means you turn over tons and tons of rocks without pulling the trigger on anything. I’m sure this is why performance is so good, but I can see why from a day-to-day perspective it can suck. Imagine you’re a Principal that’s boiled the ocean to finally source your own investment, a phenomenal deal that should punch your ticket to Partnership. At another PE firm you’d make the investment, it’s a no brainer. But at H&F it’s really good, but just not quite good enough, so no deal for you. Back to the grind to find that sparkly diamond in the rough.
Yup, H&F has a phenomenal track record.
Would strongly advise to look into Verisure and Nets investments...
Thanks for this write-up. I've heard the deal experience can be very hit-or-miss for associates, why do you think its one of the top seats? Prestige and learning how to do diligence?
That’s probably right.
Someone above said it’s a good associate seat because of AUM per Associate. That’s a stupid metric to look at. Associates don’t get paid on AUM. I’d be more focused on an AUM/head metric if I were a principal or partner.
As an associate the most valuable thing you will get from your program is: (1) Brand, and (2) experience making new investments.
Brand is what it is.
On experience, the better metric to look at would be deals per year / size of associate pool. That’s probably being overly nerdy about it, but hopefully you understand what I’m getting at.
How is the culture at CD&R?
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