LMM or Corp Strategy
As the title states, I’m trying to decide between going to LMM PE or a hybrid corporate strategy / corporate development role. The PE role is associate for a ~$500mm fund with all in cash comp of ~175k and assuming hours of 9 - 8 during the week with minimal weekend work. No carry at associate level but will be available later on (no MBA push out). The corporate strategy role is for a pre-IPO portco, with all in cash comp of 135k and some equity (amount of equity not disclosed). Curious to hear if anyone has had to decide between the two industries and what drove your decision / how you ultimately feel about it looking back. My gut is telling me LMM would be more dynamic and allow optionality for down the line should I decide to move..
I'd go with the LMM PE and it frankly doesn't seem close.
Agree. LMM gives you better near-term comp & learning, as well as longer term comp potential & optionality. You can always move to corp strategy later if you don't like it, but will be difficult going the other direction.
Am I the only one a little concerned about the LMM opportunity? I have worked in LMM private equity and I can tell you right now it’s a mixed bag depending on the firm. Before making any decision, I would hope you’ve done your due diligence on the firm, their focus, their management so you can get a better idea of what you’re getting yourself into because you could get fucked on comp. Your bonus may just be “eat what you kill” type of culture which is fine but there may not be that stability. Another thing is branding. How is the branding of the firm looking because many LMM firms are mainly a group of entrepreneurs looking to grow their portfolio through direct private equity which is non traditional PE where they don’t focus on an exit. If this is the case I’d be a little cautious based on my personal experience in PE because those teams are more focused on portfolio growth vs growing their private equity team from a business perspective which is not good for you.
If the corporate development role is at a bigger and better company I would take it just for the lateral and branding opportunities later as an insurance policy if you don’t like it. I am telling you, when I worked for a year at the LMM it was very difficult to find a new role due to the lack of good brand the firm had. So just be a little cautious in that and make sure you’re not getting yourself into a boiler room type of job.
Thanks, this is really interesting to think about. Would love to learn more about your experience and how to maybe do more extensive diligence to sniff out these attributes. From what I can tell, this LMM seems to be pretty reputable and has a mixed senior team of ex Ivy League and industry experts (PhD types). They also do exit investments and have investors so it's not a family office / buy and hold scenario.
What specifically about the brand made it difficult to lateral like you noted? Was it that lack of investment exits you mentioned previously or just a lack of people knowing what the company is? And when you did end up finding a new role, where did you land (PE still or other?) and are you ultimately happy with the new position?
Regarding the corp strategy option, I would not say that it is a better company or more brand recognition. Just a high growth nichey type company.
Google shore capital. It's a LMM with over a Billion in AUM. If they're anything like them and they're motivated to open new funds I'd take it.The way you'd sniff out poorer shops is as follows:Management experience: are they entering private equity with weirder backgrounds? It's fine if one guy came from operations, it's actually important for private equity as you'd need to understand how the business operates from a capital expenditure and operational perspective for growth. But if you're seeing a large portion of upper management comes from strange backgrounds not IB related you're likely going to get fucked on comp and the branding may be poorer.Current employees: if many of their employees are non target kids that are now working in private equity - run. This is a scam from entrepreneurs on youth. They sell opportunities to you that you'll work in PE but you're just helping them manage their portfolio companies on a day-to-day. This is important for private equity but if that's not all you should be doing.If they tell you that the opportunity will be focused on "deal sourcing": when I was younger this sounded really cool on paper but it's literally a cold calling job, where you're cold calling SME asking owners if they're interested in selling and then giving them low ball offers. This is very common at secondaries funds where they're looking to provide liquidity to PE firms looking for a quick exit.It sounds like this opportunity is decent, if it's anything like Shore Capital then I'd say it's not a boiler room and I'd consider it. Also check and see their last fund raise. If they have little to no dry powder left I wouldn't take it.
In terms of what made it difficult to lateral, It was that the firm was known by no one and because the owners were more interested in growing their wealth vs building a private equity company so they became content with the companies they have, as well as the fact that they weren’t rlly motivated to raise more capital. I eventually moved onto a big REPE firm which was a huge step up but in no way shape or form did I get there because the interviewer endorsed my experience at the firm, they just really needed someone and I filled that role and performed well at the interview.
I would personally go for LMM, assuming you've done your diligence on the firm. Try to find former employees who worked there to talk to.
Assuming you're like most of us and want to keep your options open and want to stay in the deal / finance world, LMM PE would be the winner. If you go corp-dev, just know it'll be very hard to get into PE later on.
Probably LMM. Aside from normal questions on team / track record, how long is left in the fund’s life? Are they fundraising now? It’s a tough environment to be raising new money, so 2 years left on the fund life is less attractive vs well capitalized company
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