LMM PE Associate Experience - What is it REALLY like?

Hi Monkeys, I am looking to better understand what a day in the life of a LMM PE Associate is like. I expect to get varying feedback, but I would love to better understand what your experiences have been like.

Couple areas I'm particularly interested in: 

Raw Work Experience

For example, are you the first eyes on every CIM, making a case for your VP / Partners as to why or why not it meets your criteria? Do you have a hand in BD? Do you ever spend time searching for non-banker mitigated deals? Aside from the modeling and DD, what else occupies a large % of your time? Are you tied up constantly on calls with legal / IT / other areas of integration / DD that you have no impact on?

Comp / Carry

What is your comp and bonus? If you would rather keep it confidential, what % is it of your IB / Consulting / pre-PE salary? Any carry? Is the carry on a per-deal basis or is it a % of the aggregate fund ROI? How do your comp negotiations typically go? 

Career Trajectory 

Has this been defined for you? Do you have a standard number of years at each rung (e.g., ~2 years as Associate before Senior Associate)? Does WLB appear to get better or worse at the next level (Sen Assoc or VP depending on the fund)?

Happiness / Lifestyle 

How happy are you? How are your hours? How is your team? Do you feel supported (or not at all)? Do you have other juniors you can relate to or is the next youngest person your VP, who is say 31? Weekend work? 

Fulfillment 

Do you feel that you've made it? Are you satisfied? Do you intend to stay in the LMM space or move toward the UMM / MF space?

Comments (53)

Most Helpful
Feb 16, 2022 - 8:08pm
kindheartedconsultant, what's your opinion? Comment below:

Happy to jump in with some of my numbers/experience.

Currently an Associate at a LMM PE fund. We do flexible investments across VC, Growth, and Buyout so not as vanilla as others, but still a data point for you. Fund size of ~$200M, based in Boston but working remote.

Raw work experience: I look over all the CIMs and decks that come in and create a case for or against the company, and we debate weekly within the team. I am heavily involved in the portcos that we own and obviously less hands on in our other growth/VC investments (unless the CEO needs a hand, and I can be deployed then--perks of a consulting background). I spend some of my time sourcing, but that's only because I want to/have connections in the industry, and it's easier to start that now than when I work up to partner. DD is the biggest portion of my time, but we try to outsource everything else that we can.

Comp/Carry

100K base and 100K bonus with levered co-investment on any deal. No carry right now for me, but that's typical and frankly I wouldn't ask until Snr. because I want to prove value first, but that might be something that I think more deeply about, given that the brunt of the work comes to me. We'll see. Carry I believe is on a per-deal basis here, but haven't pushed in that much.

Career Trajectory

It's a ~5 person fund and they're raising their next funds and planning to grow, so we haven't sat down and said, "Here is your role," hall conversations with the partners have indicated that there absolutely a place for me here as we grow, and over dinner they've urged me to stick around (have been a very high performer so far). I Initial conversations were 2 years to Snr. and then a year to VP, but honestly I'm going to try to make VP in 2 or 2.5 years because I know that there is room to grow here. WLB appears to be similar, but that's explained below.

Happiness /Lifestyle

Gotta be honest here--I hit the jackpot on this fund. I am super happy in my role. I average 45 hours per week (more on a heavy DD, less during the holidays) and sometimes if it's 3pm and I want to be done, I'm done. I've lost ~60 lbs and my relationship with my spouse and kids is better than ever. My team rocks as well. They're not hardos that grind for the hell of grinding, but they come from top schools (HBS, Booth, MIT, etc.). I think i could learn more in the UMM, sure, but honestly I really don't care about the extra I might learn. I'm not a monkey in excel the whole time, I'm hand-son and my voice MATTERS. It's incredible. Also, have not worked 1 weekend yet, and fly first class everywhere, including/especially international.

Fulfillment

Yes, I've made it. I'm sure of it. I'm very satisfied, and I love it. Maybe in the future, I'd look at UMM or MM but at this point, why would I? I'd honestly rather just help grow the fund from LMM to MM instead honestly, I love my guys and the culture and there's no reason to leave right now. Maybe if something incredible came through, sure, but I've made it. My comp may be $100K lower than a UMM but I'd trade the 45 hours a week for their 70 hours a week any day of the week. 

My relationship with my wife, my kids, and my Savior have improved. What else could I ask for?

Remember, always be kind-hearted.
  • 59
Feb 16, 2022 - 9:01pm
sheldonxp, what's your opinion? Comment below:

What kind of backgrounds do the rest of your team come from? I know you said they come from top schools but wondering what was their professional experience before the fund.

Feb 17, 2022 - 10:47am
kindheartedconsultant, what's your opinion? Comment below:

Had a bit of a mix, but it's pretty standard--Investment banking and strategy consulting, obviously with some previous PE experience. I think that it's more normal too have ex-MBB in LMM because it's less driven by the super technical financial modeling and more driven by the operational improvements when you do a buyout. Same for our growth and venture investments, it's more about understanding the market and competitive advantage than modeling (outside of returns analysis, of course) and ex-consultants have a better toolkit to do that then ex-bankers. Granted, the ex-bankers can run CIRCLES around me in my modeling, that's true, but my industry/company analysis is better than the bankers--all about balancing skills.

Remember, always be kind-hearted.
  • 5
Feb 16, 2022 - 9:49pm
Deal Team Six, what's your opinion? Comment below:

First and foremost, thank you for the in-depth response, I greatly appreciate it. As someone looking to follow in your footsteps and to join a fund that is fairly similar to yours, I would count my blessings if my experience turns out half as good as yours. Congratulations on finding the diamond in the rough, a place where you can grow your career without shutting out all other critical parts of your life. 

Right now my current role mirrors your Happiness / Lifestyle response closely, but doesn't align at all regarding Fulfillment, which is why Im looking to make the plunge into PE

One follow up question for you if you dont mind; how have you earned the rep of being a rockstar Associate? What tips would you give for someone looking to mirror your success?

Again thank you very much for taking the time to respond to each component of my core question. 

Feb 17, 2022 - 10:56am
kindheartedconsultant, what's your opinion? Comment below:

Thanks my friend, feels good to be in a place I love :)

As for your question, it's honestly a product of my experience at Bain. We had a system called "Zero Defect" where you make sure that 1) your output makes sense and 2) it's free from stupid/quant errors (e.g., 2+2=4, double check), and we also were hyper focused on being 80/20 so I learned to not spend my time on useless things, e.g., making sensitivities in a model that won't change the answer. That was a big part. I also feel like because I'm in a smaller fund and there's less leadership/fluff I have a bigger voice, and I decided early on to say what I was thinking and have "Strong opinions loosely held" and not change regardless of if I were talking to the partners, VP, a Billionaire on the IC or anything else--decided to speak what I thought and then be willing to be wrong/have pushback.

I was also super lucky to be able to replicate some work I had done at Bain on a Portco that lead to some improvements in EBITDA that won the partner's trust over early.

I guess to boil it all down, the key to my success so far was that I had a couple quick wins and am quick to make the right output and then stand by it if it was right and acknowledged when it if wrong and get the right answer quickly. It's WAAAY easier when it's a small team, to be clear, and I cannot stress enough that I'm blessed to be in the environment where I can thrive (Bain was not like that for me tbh--was relatively average/slightly above average performer depending on the  case), but that's what has helped.

Remember, always be kind-hearted.
  • 8
Feb 16, 2022 - 10:31pm
NPV123, what's your opinion? Comment below:

Just accepted a LMM PE role and your comment made me even more thankful for the opportunity.

Feb 17, 2022 - 10:57am
kindheartedconsultant, what's your opinion? Comment below:

You're gonna rock it, my dude/dudette. Confidence high and chin up, you've been grinding for a couple years now and you've earned your spot. Good job and good luck.

Remember, always be kind-hearted.
  • 1
Feb 16, 2022 - 11:36pm
iridescent007, what's your opinion? Comment below:

Congrats. That is incredible.

May I ask how did you land this opportunity ? What background did you come from? MBB or T2 consulting? Strategy? Is the PE investing in your consulting industry worked on? 

Feb 17, 2022 - 10:45am
kindheartedconsultant, what's your opinion? Comment below:

Came from Bain & Company (MBB) as an Senior Associate Consultant, worked in both strategy projects and the Private Equity Group for a bit. Landed the opportunity from a headhunter reach out (I always read up on the funds they recruit for, big thanks to WSO for that). Bain does a TON in PE so it's a very natural transition, and I worked with PE owned clients while I was at Bain, with the addition of the standard F500 clients.

Remember, always be kind-hearted.
  • 1
Feb 22, 2022 - 11:11am
kindheartedconsultant, what's your opinion? Comment below:

That's a good question, and tbh I'm not totally sure. For me to stick around/be valued for my experience, I'd take no less than $250-$300 all in (range depends on carry) for Senior Associate and minimum of $400 and 5% carry for VP, unless the next fund is significantly larger, in which case I would take less carry because dollar wise it is the same. Just throwing numbers out there, though, not really based on anything but feeling/intuition.

Remember, always be kind-hearted.
  • 2
Mar 10, 2022 - 12:08pm
Scobey, what's your opinion? Comment below:

Wagmi 

“How do you measure yourself against other golfers” “By height”
  • 1
Feb 18, 2022 - 12:12pm
Deal Team Six, what's your opinion? Comment below:

I 100% agree with you, and therefore was hoping to obtain a number of data points in order to explore the differing perspectives. I think it would be helpful for a lot of users on this site to get a feel for if they are generally right for LMM PE. Again, I realize this is somewhat similar to saying "Hey what is it like to work in LMM IB", but again there are some general variances from LMM PE and MF PE (which is what I am trying to understand). I tried to outline these variances by category (e.g., Comp, WLB, Fulfilment). 

  • Principal in PE - Other
Feb 18, 2022 - 10:39pm

I can elaborate. Again, the experience is different from firm to firm and maybe even different within the same firm as there is "luck" factor to it. 

I think advantages of PE are pretty well documented on this site at this point so I won't belabor them.  LMM includes all standard PE pros to a certain degree: good comp (relative to almost all jobs for a comparative person of age but not as much as UMM/MF); working with highly intelligent people,  skillset development, travel opps, etc.

Pros I would say are specific to LMM based on my experience (and some of these might be true at larger funds, I just don't have that personal experience): getting C-suite exposure at a young age, really getting into the business and understanding the founder's story and having a front seat to enterprise value creation, being an integral member of the deal team and investment team in general and having a real voice not only in deals but the operations of the firm (to an extent).  Also a realistic chance at having stretches of chiller hours (less consistency of intensity overall) for a semblance of WLB. 

That said, I've mostly operated at a pretty torrid pace, meaning I have X,Y, and Z due with multiple constituencies pressing me for X,Y, and Z and if that goal/deadline isn't met then something bad happens - anything from missing a bid date to a free fall bankruptcy scenario. This jives with the fact that PE at any level is inherently an "always on" job. If you are serious about progressing and having PE be the end game for you, then there is always work to do whether it be monitoring your portcos, looking at new deals, or sourcing/originating. On a related note, tour ability to make partner will ultimately be predicated on the strength of your network (i.e. deal flow) or ability to raise money, so the sooner you start developing those skills the better. Here are the things to consider that I have found significantly increase time, some of which are specific to LMM and some aren't. 

1. Working with limited or poor information flow: Deal makers in the LMM love to chase that mythical proprietary deal in the market. That generally means no intermediary is involved and you could be working with limited financial info. However, your investment committee will still expect you to produce gold. This means that you'll be working directly with the CFO (more like a controller) to create information from whole clothe - this is very, very time consuming. True story I've seen information flow literally come in paper files and the data then needed be inputted manually into excel. That said, many deals are banked and have decent info flow, but not all and most are imperfect. This is part of the "luck" factor I mentioned above. It's probably more true for the smaller tuck-in acquisitions so this sort of compounds with any strategy that involves "buy-and-build".

2. Weak Finance Function.  Given that the finance team will be thin or possibly have never worked with institutional partners, you will be utilized to support and professionalize this function. Most business owners/CEOs will view you as a high value, low cost (i.e. free) resource and utilize you as much as you can. It is great experience but can be time consuming and fall under the radar as the CEO will have a direct line to you if you're doing a good job. My advice is to be very vocal internally if they are sucking up an inordinate amount of your time. 

3. Turnarounds: I've probably learned the most in my career from turnarounds, but they are highly stressful and time consuming and can blow up your personal life for months on end. Again this is luck of the draw. My advice is simply to not do a bad deal!

4. Managing up: this is probably true at every firm but you will spend a lot of time managing up and balancing the demands and personalities of the GP. This is where culture can have a huge impact. 

Additionally, teams are pretty thin, and as someone mentioned, you may not have very many peers at your firm which makes the tough times a bit tougher without that camaraderie. I think you need a certain disposition for LMM - to work with true entrepreneurs in unsophisticated businesses and work to professionalize them and ultimately drive value all while managing up.   It can be a huge but very rewarding lift. 

Overall, I wouldn't change my experience from a skillset development standpoint, but I cannot say one way or the other if the stress and hours have been worth it given the lower compensation compared to my MM/UMM brethren. Again YMMV. It is a great experience either way but whether or not it is a panacea is difficult to say until you get in the seat. 

  • Associate 3 in PE - LBOs
Feb 18, 2022 - 2:29pm

I spent some time at a LMM firm - I would say that my experience largely aligned with kingheartedconsultant's.  A few counterpoints though just so folks aren't thinking this is some holy land:

- there typically aren't going to be large associate classes / junior headcount at these firms - the next oldest person at my firm was married with a newborn so you're not going to get the same camaraderie amongst the juniors (although this is vastly outweighed by working better hours with more well-adjusted co-workers)

- while you feel like you have more agency/value-add as a junior guy, your deals and portcos aren't typically going to make headlines and the caliber of mgmt. teams is overall weaker (some diamonds in the rough, however).  

- culture/experience will vary drastically from firm to firm.  I have a buddy that has done stints at two LMM firms now and both had egotistical leadership and politics that really soured the culture / experience.  He probably worked ~30% more than me at one of the funds, doing less deals than I was.

Ultimately, I would recommend the LMM for someone who doesn't care about prestige and maximizing comp at the expense of having some semblance of a personal life.  That being said, please do your diligence whenever you go through an interview process beyond just WSO (reach out to former associates on LinkedIn, ask former colleagues/bosses, etc.). 

  • Analyst 1 in IB-M&A
Feb 18, 2022 - 4:20pm

100% agree with the above. Do your diligence is very important, would even recommend speaking with current analysts. Also make sure early that comp is in line with what you are looking for. From my experience it can range to all-in of 120-250.

Don't want to waste time with a process where the comp number is too far off your minimum.

Feb 21, 2022 - 5:12pm
kindheartedconsultant, what's your opinion? Comment below:

Absolutely agree with what you've said--I've made my peace with the fact that I'm not going to make the headlines with my deals or that I'm probably not going to make 9 figures. It's worth it for the work life balance, but you're dead on with everything else.

Remember, always be kind-hearted.
  • Associate 3 in PE - LBOs
Mar 11, 2022 - 1:44pm

One other consideration however is that the opportunity cost of staying at these types of firms has increased given the general comp increases in IB, UMM/MFs, and even corporate roles.  I recently received a VP offer from an LMM firm and was shocked how far behind the comp package was.  Even with carry, it was a pretty hard pill to swallow given you're still working 50-60 hrs a week + have all of the stress of deal sprints, portco mgmt, travel, etc. that comes with PE

Feb 22, 2022 - 11:24am
kindheartedconsultant, what's your opinion? Comment below:

Love the humor. Would it be impossible for you to give some ranges as well on hours per week, WLB, comp, fund size, etc.? I'd love to benchmark.

Remember, always be kind-hearted.
Feb 22, 2022 - 3:39pm
PrivateTechquity 🚀GME🚀, what's your opinion? Comment below:

$1b+ fund size, 70+ hrs a week on average always with some weekend work. My comp is embarrassingly below market but I came via the non-traditional route (no banking/consulting) so I considered landing the seat at all a win, especially given the unique mandate. Goal for this year is to try and get to >$100k base with some guaranteed bonus (currently only have a deals closed incentive for sourcing).

Array

  • 1
  • Principal in PE - Other
Feb 19, 2022 - 9:58am

The definition is pretty loose and depends who you ask. I generally define LMM not from fund perspective but deal size perspective. Generally companies will have <$250MM of enterprise value or put another way $20 - 200MM of revenue and $3-30MM of EBITDA with the higher end of that range flirting with MM

  • VP in PE - LBOs
Feb 19, 2022 - 2:10pm

Person you're replying to responding here. That threshold makes sense. I would say - experience of PE in general is very driven by the partners in charge, and that is way more true the smaller you get. So you can work with some of the best investors in the world or you can work with people cosplaying as PE guys. Likewise you can have great mentorship or you can drown in a "what have you done for me lately" environment. All at the same fund size. Point being while I get the desire to have a nice clean rule for "LMM is X, UMM is Y, MF is Z", it just doesn't work that way. Have to do diligence on individual firms.

My own experience at a slightly bigger fund than what you're quoting - great performance, learned a lot because of access to operational experience, industry expertise was honestly better than UMM/MF competitors. But a sweatshop where I worked more and made less than my peers elsewhere. Have to do your homework!

Feb 25, 2022 - 4:41pm
StrategyJunkie, what's your opinion? Comment below:

Are they fundraising again soon? What is target? $100m is pretty small so # of portco's make a big difference in total fees. Given you'd be an analyst, I'd expect maybe 70-85k base and probably a small bonus ($10-25k). It is extremely variable at that fund size and depends how many partners have mouths to feed.  

  • Analyst 2 in PE - LBOs
Feb 26, 2022 - 9:56pm

Currently in a couple LMM processes (funds around ~$500M range), but also have an offer with a direct lending platform that has attractive comp ($250k range all in). I know comp for the LMM roles would probably be in line or less, and definitely more hours worked, but I think will give a more differentiated skillset than private credit. I'm wondering if anyone has faced a similar decision, any advice here? I'm definitely more interested in the control equity side but seems like comp is the same but a lot more hours?

  • Principal in PE - Other
Feb 27, 2022 - 11:17am

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  • Analyst 2 in PE - LBOs
Feb 27, 2022 - 3:39pm

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