Anyone have any recent knowledge on PSG Equity (especially at the associate level)? Last year, they raised a $4.5b fund and it sounds like their returns have been very strong. They seem very similar to Audax in terms of AUM and strategy.
Any insight on how they compare to other growth shops (Lead Edge, Spectrum, Guidepost, Great Hill). Hours/culture/reputation/comp/anything else
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Worked with these guys before and have friends there, honestly not the biggest fan.
They’re DNA is in the sourcing engine / roll ups. They have a huge sourcing team and get some interesting companies, and then just crank out bolt-ons for scale. Basically just cobble together these huge software businesses that don’t always make a ton of sense - see ___ “brands” companies that are just a bunch of random things cobbled together.
They’ve had some success doing this (and a few massive exits), but I think the market is wising up that these aren’t always so great. It worked well last year when any tech company with growth could sell, but know for a fact they’ve ran a few busted processes this year where they’ve tried to sell an asset that everyone can tell is an un-integrated mess that is basically a holding company.
My personal thesis is they’ve grown fund size a ton and this has been an easy way to keep deploying capital and raise new funds, but it’ll be interesting how returns fare as they try to unload some of these hairier assets.
It’s also a huge team for the fund size, probably bigger than any comparable growth funds. The promotion cycle is long and slow (think it’s something like 3-4 years associate and then another few years as a senior associate) and pay is well below street.
The advantage is they have a solid brand (and certainly benefit from the Providence legacy name). Sourcing is a separate function so if you’re on the investment side, you don’t need to do any sourcing (though this can be both a blessing and a curse if you want to lateral to another growth shop that expects sourcing from everyone). Because of the deal velocity, the investment team here gets absolutely cranked, and you’re basically always in deal sprint because the sourcing team deals with the “setup” portion of a deal, but you’ll probably close more deals here than almost anywhere else.
So all in all I’d say plenty of growth shops I’d rather be at, though the brand is solid so you can certainly do worse as well.
Is this feedback US-focused?
so what would be a vp on the investment team at psg make, just out of curiosity.
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