I'm interested in learning about the practical differences between LMM, MM, UMM, and MF PE. How does everyday work differ? How do the deal processes / investment processes differ? How does the culture differ? How does comp differ?
Obviously, there will be large differences between funds within each segment, but hoping to get some general input.
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MF = pinnacle of human achievement
This has been answered about 100 times in previous threads. There is a lot of really good insight in those.
Shut the fuck up
Very loosely directionally speaking, working at a MF/UMM is more like working at a BB bank (working with cleaner data, more sophisticated management teams, very focused on modeling and financial engineering, generally more buttoned up culture) while MM/LMM is going to feel more like MM sellside banking (navigating auction process dynamics, simpler but also more granular models, lots of time cleaning up data and doing analyses yourself, lots of handholding with management teams, etc). I think the hours are more variable at MM firms — there are times where you can leave before 5 and times you’re getting absolutely smoked while at larger funds it’s more of a consistent grind.
Overall it varies a lot and both are fundamentally similar jobs but there’s definitely a distinct difference in the day to day. For what it’s worth, I went from BB->MM->UMM and am much happier at the UMM but have plenty of friends who much prefer the type of work at MM/LMM funds.
What was your process like moving from a MM -> UMM?
Just through the regular HH channels. I think being from a BB and recruiting into a relatively hot market helped. Unfortunately don’t have anything specific / high value to add about the transition other than that it’s possible.
One other thing to add to my above post is that larger funds feel much more linked to broader markets than MM funds. We have daily/weekly market updates at my current firm and it actually impacts my day to day considering IPOs are a viable exit strategy, we have residual positions in public companies, and much of the debt we use is broadly syndicated to CLOs etc. Didn’t matter or care at all in the LMM.
as you mentioned MM/boutique banking is alot more granular/clean up; is there a huge learning curve when going to PE in terms of running models, doing technical analysis for diligence in excel, and making investment memos? if your IB coverage group doesn't model much at the junior level, wondering how much this affects going to PE and also getting less reps in on the Excel side (data cleanup, making models)
What drove you to move from MM to UMM - what were the personal pros and cons that made you more or less happy in your current role?
Always thought it was funny it's just LMM and no one ever mentions a "lower market". At that point is it just a serial entrepreneur or some of those 1-2 man shops with at most 1-2 junior employees?
Sometimes called microcap or search fund (depends on how the funding works)
.
What even are the determining factors that make a firm UMM instead of MM for example?
Fund size.
UMM has a larger fund size vs. MM. When fund size is larger, the investments typically become larger as well.
What fund size is considered to be UMM?
I went from LMM/MM to UMM/MF. There are a few practical differences that come to mind:
What are cost-outs?
Cost savings
This is great info. Thanks for the very detailed explanation!
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