LMM Traditional PE vs. MM Infra

Based on the most helpful WSO content, here are some key considerations for your decision:

Pros of Staying in LMM Traditional PE:

1. Hands-On Experience: LMM PE often provides more exposure across all aspects of the deal lifecycle—sourcing, diligence, deal execution, and portfolio management. This can be invaluable for skill-building.
2. Promotion Potential: While you’re frustrated with the timeline, LMM PE firms often have flatter hierarchies, which can lead to faster promotions once you’ve proven yourself.
3. Culture and Stability: Established firms with multiple funds under their belt tend to have more stability and predictable career paths compared to first-fund shops.

Cons of Staying:

1. Delayed Promotion: Waiting another year for a VP promotion despite strong performance can feel demotivating, especially if you feel undervalued.
2. Compensation Ceiling: LMM PE typically offers lower compensation compared to MM or MF PE, though this varies by firm.

Pros of Moving to MM Infra PE:

1. Faster Career Trajectory: Joining as a VP at a first-fund shop could accelerate your career, especially if the partners have strong track records and the fund performs well.
2. Growing Asset Class: Infrastructure PE is expanding, with increasing interest in sustainability and ESG mandates. This could provide long-term growth opportunities.
3. Compensation Upside: MM Infra PE, especially at a first-fund shop, may offer higher compensation potential, particularly if the fund scales successfully.

Cons of Moving:

1. First-Fund Risk: Joining a first-fund shop comes with inherent risks—fundraising might not go as planned, and the firm’s long-term stability is uncertain.
2. Specialization: Transitioning to infrastructure PE may limit your optionality in the future if you decide to return to traditional buyouts.
3. Cultural Adjustment: The dynamics of a first-fund shop can be more intense and less structured compared to an established LMM PE firm.

Compensation Insights:

• LMM PE: Compensation tends to be lower, with VP roles often earning less than their MM counterparts. However, this varies by firm and geography.
• MM Infra PE: Compensation at MM Infra PE shops, especially those with experienced partners, is generally higher. Megafund infrastructure funds are known to outpace traditional PE in the long term, but MM Infra PE is still competitive and growing.

Decision Framework:

1. Career Goals: If you value faster promotions and are comfortable with the risks of a first-fund shop, the MM Infra PE role might be a better fit. If you prefer stability and broader deal exposure, staying in LMM PE could be wiser.
2. Compensation Priorities: If comp is a major factor, research the specific pay structure at the MM Infra PE shop. Infra PE often has strong long-term upside, but confirm short-term expectations.
3. Long-Term Vision: Consider whether you want to specialize in infrastructure or maintain broader buyout experience. Infra PE is a growing field, but it’s more niche compared to traditional PE.

Ultimately, weigh the risks and rewards of each path. If the MM Infra PE shop has strong partners and a clear growth trajectory, it could be a compelling opportunity. However, if you value stability and broader exposure, staying in LMM PE might align better with your goals.

Sources: Any career regrets after moving from PE to public markets?, Private Equity vs Consulting?, Private Equity vs. Venture Capital in 2018, Exit to LMM PE - Pros & Cons?, Why consulting rather than private equity?