Blank

Based on the most helpful WSO content, your friend's situation, while not entirely unheard of, is more of an exception than the norm in LMM PE. Here's why:

1. Carry at Junior Levels: It's rare for junior employees in private equity, especially at LMM firms, to receive meaningful carry. Many junior professionals are promised carry "down the line" or upon promotion, but without a signed contract, it's often just talk. Even when carry is offered, it typically takes years to materialize and depends heavily on the fund's performance.

2. Risk and Upside in LMM PE: LMM PE can offer significant upside if the fund performs exceptionally well. Smaller funds with fewer senior professionals can mean a larger share of carry for those involved. For example, if a $500M fund doubles its returns and has a lean team, the carry distribution can be substantial. However, this comes with higher risk—if the fund underperforms or fails to clear its hurdle rate, the carry could be worthless.

3. Outliers vs. Norms: Your friend's experience of making several million dollars from carry as a junior is likely an outlier. Most LMM PE professionals face challenges like less job security, fewer resources, and the risk of being tied to a fund that doesn't perform well. Additionally, the work in LMM PE often involves dealing with unsophisticated businesses, which can be less intellectually stimulating compared to IB.

4. Comparison to IB: While IB offers more job security, higher base salaries, and structured career progression, the upside in PE (especially at the partner level) can be significantly higher due to carry. However, this upside is typically realized much later in one's career and is contingent on the fund's success.

In summary, while there are cases like your friend's where LMM PE professionals strike gold, they are exceptions rather than the rule. Most junior professionals in LMM PE do not see life-changing carry, and the risks and challenges of the space often outweigh the potential rewards for many.

Sources: Exit to LMM PE - Pros & Cons?, Is it dumb to exit to LMM PE rather than starting in bigger (MF/UMM) opportunities first?, The Efficient Career Hypothesis: Almost All Jobs Are Priced In, From Private Equity Associate to VP in Private Equity, Breakdown of Post-IB Exit Opportunities