A History of Compass Partners


Compass Partners was founded by Stephen M. Waters in 1996 to combine the broad experience, international reach and global relationship network of a major investment bank with the independence, agility and personalized attention of a boutique firm.


Waters began his investment banking career at Lehman Brothers in 1974, co-founding its Mergers and Acquisitions (M&A) Department in 1977, becoming a partner in 1980, and serving as co-director of the department from 1985 to 1988. He then moved to Morgan Stanley and ran its M&A Department from 1990 to 1992 before serving as co-Chief Executive Officer of Morgan Stanley Europe. He held that role from 1992 to 1996, in addition to serving on Morgan Stanley’s worldwide 12-person Operating Committee.


During an era of unprecedented growth of the major investment banks, Waters advised some of the largest multinational companies in the world. M&A Departments grew from fewer than 20 people to over 350 and analyst classes grew from a mere handful to over 50. The resultant institutions often became characterized by bureaucracy, internal political battles, dysfunctional management, and poor treatment of junior personnel in a relentless effort to pitch and bring in deals. Despite this growth, advisory businesses declined in importance inside the major investment banks as a result of the immense profitability generated by lending and proprietary trading. Conflicts of interest became inevitable as many major investment banks became more interested in generating fees and trading profits than providing sound, impartial advice to clients. 


To counter these trends and avoid the conflicts of interest inherent in large, multi-product financial institutions, Waters founded Compass with a team of exceptional and like-minded professionals from around the world. Compass is focused on only two things: providing good advice and making good investments. Our clients repeatedly return because of this focus. The Compass culture is friendly, collegial, entrepreneurial, and focused on excellence – as should be expected from an entity clients are relying on for advice.


Although the firm has seen many successes on both the advisory and investing sides, it has chosen to maintain a low profile.


In its advisory business, Compass has completed over 50 transactions representing over $100 billion in aggregate transaction value. The firm’s transactions encompass a diverse range of industries, including airlines, automotive, consumer products, energy, financial services, industrials, media, real estate, technology, and telecom.


On the investing side of the business, the first Compass private equity fund focused on European industrial assets, deployed $850 million in seven investments (comprising 15 transactions) and returned $1.6 billion to its investors.

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