LMM PE - Career Advice

Hi all, a quick background : I recently accepted an Analyst position at a LMM PE shop out of undergrad. The Firm just closed its 3rd fund ~$500mm. Historic fund returns have been solid (2.2x - 3.4x CoC) and there are handful of intelligent investment professionals that will make for great mentors. I am really excited to get started and often feel like I hit the lottery with this opportunity (meaningful deal oriented work, solid WLB, possibly strong continuity Analyst -> Associate, etc). With all of that said, I still have some things I remain wary on and wanted to seek some advice. One reason I chose this LMM PE role was I really love everything about the firm and think there could be a pathway to the carry pool in the next 5-6 years with aging senior folk. Considering that LMM does not have great exit ops, continuity at a firm and getting to a senior seat w/ carry seems like a great play. Aside from the obvious, what are some ways this strategy could fail? I was thinking if the fund blows up, then the prospect of a future senior seat loses its appeal, but could always lateral to another LMM fund and keep trying? Would appreciate any and all input here and just advice in general. Always eager to hear new perspectives.

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Congratulations on your offer and being forward-thinking. That will generally be helpful for you in your life and career. That being said, I think you are a bit ahead of your skis here. I was a LMM PE Analyst a couple years ago so I think I'm uniquely qualified to comment on this.

Odds are, you will not be at the same fund in 5-6 years. Even if you had the option to stay that long, it's not 100% obvious to me that would be your best career choice. Some things that may happen during your tenure at this firm:

- You discover some political reason why you cannot move up. Pretty common at LMM firms that are more clubby/tightly held. E.g. an Associate's uncle is an LP and there's one VP slot that's unofficially earmarked for them. Nothing you can really do about this.

- Your superiors are not adept at or are unwilling to teach you modeling and presentation skills that they themselves learned in investment banking

- Something happens in your personal life that makes you want to move cities, go to business school, leave the rat race etc. If you are wired like most people, incremental money and prestige will be less appealing over time. I suggest you study your VPs and see what kinds of relationships they're able to have with their spouses, kids, etc. and ask yourself if that's what you want.

- A down cycle happens in the M&A market (look at deal volume/fund raises in 2021 vs. today) and the firm is overstaffed. You are either let go or put on shitty deals/tedious tasks that don't go anywhere.

All that being said, it is completely possible and I'd argue advisable to move to another firm whether or not any of the above occurs. Different firms have different strengths, and the more you learn, the more marketable you are to an extent (obviously excessive hopping is a counter signal). There are several times I've seen a partner pull someone into the fold of a high priority deal because they spent time at a shop that had a comparable asset/strategy.

I do not think the scenario you are most worried about would hinder you much at all. When a fund blows up, nobody really attributes blame to the juniors. There will always be a LMM/MM PE shop that is doing well, and your job for the next couple years should be to prioritize your learning so you are valuable to them, whether or not it happens to be your shop. If you're good, someone will want you.


Thank you. This is extremely helpful in so many ways. Did you wind up staying at the firm you were at from Analyst to Associate? Any other advice you have for both prepping for the role / hitting the desk?


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