The firm that’s today known as Thoma Bravo has $160 million in assets under management, and a long history in the private equity sector.

The buyout shop evolved from predecessor Golder Thoma, Cressey Rauner, which in 1988 split to form GTCR and Thoma Cressey Equity Partners. In 2007, the latter firm changed its name to Thoma Cressey Bravo after Orlando Bravo was named a partner. The name changed yet again after Bryan Cressey left later that year, this time shortening to simply Thoma Bravo.

Thoma Bravo is currently investing its 15^th flagship fund, which raised $24.3 billion in late 2022. (The firm is out marketing for its 16th pool, which has a $20 billion target, according to Buyouts.) It is also one of the few firms returning money to investors despite the slow down in dealmaking. In July, Thoma agreed to sell all of Instructure Holdings to KKR for $4.8 billion including debt and then offloaded half of its 14% stake in the Nasdaq through a secondary public offering. Both these deals allowed Thoma Bravo to return $5.2 billion to its limited partners over the summer, according to a Bloomberg report that Fortune confirmed.   

The associate position at Thoma Bravo is one of the toughest to get, according to a recruiter who specializes in PE placement. “It’s a very prestigious firm,” they said. “Thoma Bravo is one of the best firms on the street.” 

Like many PE firms, Thoma Bravo does not hire applicants straight out of college but does employ associates and uses recruiters to find candidates. The associate role is a more senior position at PE firms, geared to young executives that have graduated from college and have worked two years in an investment bank, like Morgan Stanley or Goldman Sachs, or possibly consulting. 

PE firms look to bulge bracket investment banks and some boutiques to develop this talent. Young bankers will typically spend two years honing their skills in financial modeling, valuations and deal execution, which are useful to private equity. When their two years are up, some of these execs will join PE firms, which are in the business of investing in companies. 

Raiding banks for talent

Every year there is a rush to hire young execs to fill the associate positions. The process, called “on-cycle recruiting,” refers to the days, or a week, that mega funds spend courting hundreds of candidates. PE firms are typically very aggressive during the on-cycle, making offers to junior investment bankers—many of whom have often just finished college—for positions that begin two years in the future. In addition to Thoma Bravo, on-cycle has historically attracted the biggest firms including Blackstone, KKR and Apollo Global Management.

On-cycle recruiting has been starting earlier each year as the competition for top talent has grown more intense. In 2019, on-cycle recruiting began in September, then moved to July in 2023 and this year, it launched at the end of June. This meant analysts were fielding PE offers before starting their banking jobs. 

These recruiting tactics have created mixed feelings at bulge bracket investment banks like Goldman Sachs and Morgan Stanley. The IBs spend time and money training hundreds of analysts a year only to see a good number—it’s not clear exactly how many—head out the door to private equity firms.

“It’s not small,” one banker said. Some IBs are turned off by the recruiting practice while others accept it, knowing that some of these departing bankers may go on to become clients. 

Potential conflicts of interest have caused some banks to take a more proactive role. JPMorgan, in an August email to its newly hired analysts, acknowledged that the young bankers may be approached or may consider opportunities outside the firm. It then warned the analysts that they must inform JPMorgan if they have accepted an offer.

“To ensure we do first class business in a first-class way, we cannot take on client business where there could be a conflict of interest. If you accept a future-dated offer of employment, you have an obligation to disclose that acceptance to your manager immediately. This could impact the projects that you are staffed on so that the firm can properly manage any potential conflicts,” JPMorgan said in the email.

The bank’s policy may be in flux, however. JP Morgan said in the email that it was reviewing its policy on how to respond when an analyst takes a job with private equity. This could mean that junior bankers who accept a PE job while at an IB may get fired.

In the midst of the fuss, Thoma Bravo is now changing its recruiting practices. The firm has historically participated in on-cycle recruiting, but is now pursuing off-cycle to “allow candidates time to settle into their investment banking roles,” a person familiar with the situation told Fortune. It’s unclear why Thoma Bravo made this decision. This will be the first year that Thoma Bravo is completely pursuing off-cycle recruiting, but they’ve used off-cycle in the past to supplement on-cycle recruiting, the person said.

Off-cycle recruiting basically starts whenever on-cycle ends. It can last for months and is typically used by smaller or mid-market firms that need to staff up outside their standard timeframes, usually due to unexpected deal flow, or team change, said Meridith Dennes, managing partner of Prospect Rock Partners, a financial search firm. It usually harder and it takes more time to get a job during off-cycle but some people do secure positions, Dennes said. Private equity hiring is dynamic, she said. Their timelines to add employees often shift due to market conditions, changes in the talent pool, or competitive pressures, she said. “For job seekers, particularly those with highly sought-after skills or experience, this means there can be entry points into private equity year-round,” Dennes told Fortune.

Staying Lean

Of the mega private equity funds, which refers to firms with $10 billion to $20 billion-plus sized pools, Thoma Bravo has a reputation as one of the best, according to recruiters. “They’re the gold standard,” one placement agent said. 

At the same time, Thoma Bravo is also one of the leanest in its cohort compared to the likes of Blackstone, which has $1.1 trillion in AUM and employs about 5,000 people or KKR, which has $601 billion in AUM and 2,500 staff.

In contrast, Thoma Bravo numbers just over 220 people, including 38 associates (this number includes various years, including eight from the class of 2024).  The firm purposely keeps the deal team lean to give associates the opportunity to have responsibility and authority, as well as creativity to lead and execute transactions, a person familiar with the firm said. This structure allows Thoma Bravo associates to experience every facet of the deal process, from origination and in-depth analysis, to collaborating with management teams, and then navigating through to successful exits, they said.

Thoma Bravo is also structured to support mentorship with associates typically partnered with more senior colleagues. Carl Thoma, a founder and managing partner, famously hired Orlando Bravo when he was a student at Stanford University in 1997. Bravo said he made a “ton of mistakes” when he started at the firm, then called Thoma Cressey, according to the podcast, Behind the Deal. Thoma mentored the young Bravo and taught him how to do deals, Bravo said. “Listen to your mentor very carefully. I was lucky that I have the best one,” he said.

The competition to be a Thoma Bravo associate role is fierce and that’s not surprising given the pay. At top PE firms, associates that are three years out of college (two years at an investment bank and one year at a PE firm) can earn up to $300,000 annually, according to Wall Street Oasis. Associates usually get an annual bonus, which can be sizable, but they do not typically get carry. Associates do all the grunt work that goes into a PE deal and associate hours are similar to banking—long. “It’s a grind,” the recruiter said.