How different is PE investing at MFs vs MMs?
I have long term personal dreams of owning/operating my own small business in a "Main Street" sector.
After my associate stint, should I consider moving to a LMM/MM PE fund that invests in more traditional sectors (business services, light manufacturing, consumer etc) vs staying in my large cap software PE role?
I'm trying to assess if the experience of (1) dealing with less scaled businesses and (2) assessing companies in a sector that I'd want to operate in is valuable enough to warrant a move downstream for a VP/senior associate role?
Is the MF tech PE skill set readily transferable?
Based on the most helpful WSO content, here are the key differences and considerations for transitioning from MF PE to MM PE, especially if you have long-term personal dreams of owning/operating a small business in a "Main Street" sector:
Differences Between MF PE and MM PE:
Deal Size and Complexity:
Value Creation:
Skill Set Transferability:
Considerations for Your Career Move:
Relevance to Personal Goals:
Sector Experience:
Skill Set Transferability:
Conclusion:
Ultimately, the decision should be based on which path aligns more closely with your long-term goals and the type of experience you value most for your future endeavors.
Sources: MF PE is Paradise...LOL, Moving from Asset Management into IB / PE, HF -> MF PE, Infrastructure Private Equity Basic Skills, Why are people so fixated on going to MF from IB?
Not sexy advice but the skills arguably become less transferable as you move up. Best way to learn how to operate is to operate.
Please take with a grain of salt, but it seems like the different "tranches" of investing (MF/UMM/LMM) all potentially provide a different skillset depending on what you want. If you consider yourself to be more of an entrepreneur, and just see PE as a way to gain operating and investing skills, it could be argued that going to a good MM/LMM fund would be better than MF simply because you'll gain more operating exposure and insight into how smaller companies function and are developed. For the people that go the MF route, it seems that the good ones tend to stick to investing in that range, as the MF buyout sizes are more "corporate" in nature if that makes sense. You're not going to be as focused operationally because you can get a seasoned management team to come in and add significantly more value than you probably could. With MM, it's more of the operating partners that can add value along with the management team. For me personally, I knew I wanted to have my own set of businesses to rely on for income down the line, and figured that a MM/LMM experience at a good firm with smart people would be more value accretive than pursuing an opportunity at a BX/TPG/KKR.
not OP but have a similar question. Is it worth changing firms (current firm is a tech sector fund) to a more traditional industry / industry I'm interested in? Pro is getting more industry exposure, con is the effort/uncertainty/potential year wasted doing another associate year, and tech PE has more seats / has a wider opportunity set than most other narrow verticals. As one of the posters said above, the only way to really learn how to operate is to operate, so not sure how much value there is in changing PE firm / vertical to gain "experience" whatsoever
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