LMM is underrated
Your career is going to be easily 50 years long and maybe more, already current retirement age is 67 in the USA, 66/70 in the UK and will 300% rise due to the pressures of looking after an ageing population
Yes the LMM experience is highly variable but on average/median, it offers quite a bit more chilled lifestyle than MF/UMM, once your in the space and know more people, I imagine you can optimise for this later more easily
You have a higher risk of burning out in MF/UMM meaning that you won't really get to reap the full benefits of a lifetime career in PE over 50 years with all the compounding and investment returns
Things life office politics exist everywhere and are more a firm specific than sector specific problem
Even if you don't burn out in MF/UMM, you might often find that there's no space above for you because the guy/gal doesn't want to leave so you have to go downmarket anyway, let alone the chances of making it senior in a huge fund
You still get to make multiples of the avg. salary in your respective city/country
The work can arguably be more interesting from the perspective that there's generally more focus on operational improvement instead of getting returns via leverage
Yes I know the optionality isn't the same but at some point you gotta just friggin decide what you want to do. LMM PE still gives you a relevant skillset to move into business roles in tech and other areas if you so choose, sure not the sexiest roles but nevertheless
Sure I admit I get a kick out of saying yeah I work for bank X and the prestige but that's not what really matters in life. I get that some people want to work on the biggest deals and that's fair but my point rather is that the level of focus on getting into a huge fund is warped. LMM isn't for everyone but its for more people who want to do PE than I think they realise.
Having a role at a great company is not the same as having a great role. Apollo hiring you is great for them, you're making them a lot of money, doesn't mean its necessarily great for you
Thanks for listening
I went LMM over some MM/UMM shops. I definitely second this and so far am happy with my choice. It could change down the road but who knows
One thing to keep in mind is that while LMM may be more chill on average, it’s extremely firm dependent. I know LMM guys who work 9-6 and I also know LMM guys who work longer hours than your typical MF person. You can’t just go work for a LMM firm and assume you’ll have a great life.
The other thing I’d consider is your tolerance for drudgery. The nice thing about LMM PE is that it tends to be very entrepreneurial with fewer roadblocks to actually getting deals done but you also end up spending a lot of time doing mundane/annoying/tedious data cleaning, babysitting your management teams during important meetings, lack of 3rd party resources / research, etc. A lot of that shit it taken care of at larger funds so you can focus more on investing, which is presumably what you signed up to do. Not saying one is better than the other but there’s definitely a trade off.
All great points but turning around a dysfunctional management/operational structure for a sale years down the line can lead to great returns. I've seen some LMM (<$500M funds) with absurd returns. Operational-focused funds to me is more interesting to me and you often see them more in LMM/MM than UMM/MF.
Careful what you wish for
All great points.
I believe that's where the likelihood of higher returns are for each early employee. A 5th guy at a $200 - $500m LMM firm that you really do believe has great potential will make you much more money in the long haul. Also, you'll be having a much more impactful role at a growing firm.
Blackstone was at one point a MM firm (yes Ik the 1980s-1990s was a great time for PE firms) with little prestige.
Working at a LMM firm has higher chances of greater ROI (financial and more) than a MF like Blackstone.
For me, I'd take that route instead.
Definitely. But will say I've seen someone get screwed as one of the new partners after a vintage LMM fund that performed extraordinary well. Every fund after performed badly and he got little to no carry while the founder made his fortune in his first fund (high 8, low 9 figure net worth).
True but as I mentioned, I imagine once you're on the buyside people would be more willing to be open with you that "oh you're getting a raw deal if you're getting off at 9, lemme connect you with a buddy of mine" vibe vs if you're breaking in so you can find those chill firms a few years into PE much more easily
Your point on the drudgery is interesting and noted, thanks for mentioning
As someone in the LMM, I agree that generally LMM is underrated. However, you'll need to have a immense patience given that you're typically looking at some awful opportunities quite frequently (e.g. lean to non-existent process integrations, poor management, little to no financial sophistication). I'd imagine at least in the UMM+ the opportunities reviewed are generally of good to great quality - unless someone with that experience can chime in and correct me. My assumption would seem to tie to the fact that there can still be "value" found in the LMM in terms of entry multiples.
I'd say the LMM markets are less efficient as the information for opportunities moves slower, so there is a huge chance for alpha in the LMM
Let's out the shitty LMM firms here. Please list LMM firms that you know have terrible hours, etc.
Facts
well from ppl ik who went big 4 tas to pe (quite common here in london) it can be more chill but idt its universally the case tbh
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