MM/UMM PE over MF ?
1st year analyst at a top BB in one of the more active coverage groups. I didn't take part in on-cycle a few weeks ago but have started to think about off-cycle recruiting plans, and wanted to request some feedback
What is the case for UMM / MM PE over the traditional buyout-focused MF groups? It seems like the chances for internal promotion (carry), level of responsibility, and culture/WLB tend to be much better (on average). Granted you're sacrificing the brand-name, but if I'm against business school and moving continuously from firm to firm what are significant trade-offs ?
Would love to hear from folks who made similar decisions in past and comments / reflections on pros / cons. TIA !!!
Joining a UMM/MM fund this summer. For me it really came down to a few things:
Team size/culture - I work on smaller team (~10ppl) in banking and my new team will be around the same size. I met almost everyone on my new team during interviews so I felt like I had a good gauge of the dynamic and personalities. Teams at MFs are larger, and I feel like you can't make the same connections with your coworkers. Smaller teams also mean more facetime with seniors which is good for both learning and your career
Responsibilities - Responsibilities for associates at UMM/MM are lot less rigid and you'll get to "play up" more if your team sees that you can handle it. Depending on your fund, you'll get to speak in IC, take charge of the advisors on deals, be directly involved with portco management, and take more of a leadership role on the model vs just incorporating everyone's comments. I'm exiting with a few more years under my belt, and I don't mind doing the grunt work again, but going back to being just an excel monkey wasn't attractive.
Involvement with portcos - I felt like I would get more opportunities to be involved in the operations of my fund's portfolio companies at a UMM/MM fund. MFs are more likely to just lever up their portcos and let management take care of actually running the business. Depending on the fund, UMM/MM can invest in turnaround situations, carve out underinvested subsidiaries of corporates, or just be more hands-on with growing the business. Understanding the operational aspect was one of my main reasons for wanting to exit to PE, and I felt like MF just wouldn't give me that experience to the degree I wanted.
Larger target universe - Because of the deal sizes MFs usually deal with, the universe of targets is much more limited. There are just more sub-$1bn revenue companies, so there's always the chance you'll come across a good-quality business or niche player that you haven't heard of before.
Of course there are other considerations that are very fund-dependent - hours, promotion timeline, cash comp, co-invest and carry at more junior levels. In general, you'll probably get lower cash comp in UMM/MM, but are more likely to get co-invest (potentially with leverage) as an associate and carry as a senior associate. Promotion timelines can also be less rigid, especially if your seniors have discretion over your timeline.
I'd say MM is much more variable than MF. While at an MF you are basically guaranteed "banking 2.0" - long hours, bad culture, rigid hierarchy, etc. - across MMs there is a much wider spectrum. So really it's up to you to find a place that meets your needs on culture, WLB, comp, opportunity for promotion, etc.
I think people underestimate the MF PE experience. In some cases, there may even be more opportunities to step up given the sheer amount of capital at the firm. For example, mid-level employees at BX, KKR, APO, etc. get board seats so much faster than their counterparts at your average MM / UMM PE firm. Obviously board seats don’t mean much without full context, but trying to make a point where. At the senior levels, you’re able to build businesses within MF PE vs. being the 7th or 8th deal partner at your MM PE firm. If I were to pick what would be a more interesting job, it would be the former. The point is that YMMV so do your due diligence before saying the typical MM / UMM experience will be so much better than MF PE. There is just a higher quantity of opportunities for Associates, VPs and Principals to step up vs. typical MM or UMM where everyone is fighting for one or two things. I think people tend to regurgitate what’s on this site vs. actually having experience at two different size PE firms. Just my two cents.
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