Quick plug for LMM PE re: Work / Life Balance

Maybe I'm incredibly lucky, but I've worked at a lower middle market PE fund (think $1-2Bn AUM, fund size in the $500-750MM range, $20-50MM equity checks, major city that's not NYC) for a few years and my life is materially better than when I was in BB IBD. My typical hours during the week (pre-covid) are 9:30-7:30pm in the office, with maybe 1 hour at home every night (mostly responding to emails) after dinner, gym, etc. Weekends are mostly clear, maybe 2-5 hours on Sundays to get ready for the week. When a deal's getting hot it's obviously more intense, but I have significant latitude in terms of schedule (e.g. I can chose to take Saturday off and work all day Sunday). It's not like I'm sitting on my hands all day either - I've averaged 1 major transaction (platform acquisition or sale) plus a handful of add-ons, refis, etc. each year and have done significant portco work as well. 

My comp could be higher (first year associates make $200k all in, $10k all-in comp increases per year), but considering the low cost of living, I've been able to save a ton of money. I'm wrapping up my defined associate stint shortly so need to choose between b-school and lateraling. I guess the point of this thread is to let people know that there's a life outside MF/UMM funds and it's often better and healthier. Sure, I may not get into HBS and I'll never work on a front-page of the WSJ type of deal, but I'm generally happy with my life, work on interesting stuff, and make plenty of money compared to many of my peers. Just food for thought. 

Comments (34)

  • Analyst 2 in IB-M&A

Counterpoint: I turned down PE at a LMM fund about the same size as yours after speaking with former associates that had worked there and described it as living hell in terms of hours worked / on-call. I've also met folks from significantly larger funds with pretty great lifestyles (within the world of finance, at least). I don't think the line between LMM and up exists in terms of hours and lifestyle.

  • Analyst 1 in IB - Cov

Sounds like Huron

  • Prospect in IB - Cov

Why would it hurt his shot at lateraling to other lmm funds. 

  • Associate 3 in PE - LBOs

For a lot of people in LMM PE (myself included), this is my exit opp. I really enjoy the thesis-driven approach we take, the engagement with management teams and the exposure into both investing and operations. The team is lean and extremely collaborative and we get along really well. Comp is also very strong as you progress since the senior partners are generous in spreading carry out to people who perform well and there aren't all that many people to spread it between.

  • Intern in IB-M&A

This is interesting -- so would you say that, in general, there is better chance for an associate to ultimately garner carry at an LMM shop, vs. MM?   

xiaochengopalbatista, what's your opinion? Comment below:

I just want to know, how can I figure out if the firm I am interviewing at is like your firm.

I would do *anything* to be there now, *anything*. PE is the worst mistake I have made in my life, full stop.

Damn bro Pm me if you wanna chat.

  • 1
  • Associate 2 in PE - LBOs

Are you the same guy who has been posting similar messages for weeks if not months now? You're probably better off just quitting and seeking professional help - this doesn't sound like a simply 'I don't like my job' scenario anymore

  • 3
  • Associate 1 in PE - LBOs

I also back OP's message. I've been at a LMM for a year now and the hours are essentially the exact same as OP's (930-730, 2-5 hours on Sundays). Slight pay cut, but at least I know the work is sustainable, with an explicit track to a senior professional within the same firm. 

Typically, I like to bucket PE juniors into two buckets of why they enjoy business and the concept of PE:
1. They like deal making; or 
2. They like the intricacies of business operations (and helping to make biz ops decisions). 

With my experience in LMM PE, you get a ton of exposure to both. On the latter case, this is especially true in LMM since the corp dev or strategy teams are either non-existent or very lean, and the companies themselves are typically looking to scale meaningfully. You essentially become an outsourced finance/corp dev/strategy professional for a lot of these portcos. Thus you get a glimpse into what it's really like running a business, working closely alongside senior management.

I come from a family of entrepreneurs, and so I understand what running a smaller business that's growth-conscious is truly like - and I have to admit LMM PE gives a realistic glimpse into the operational activities you'd experience should you set out on your own (although it's obviously not perfectly alike). So, if that career path is something that interests you, or you simply enjoy more exposure to operations from a higher level as an investment professional, I'd highly recommend LMM PE.

  • Prospect in IB - Cov

Since your firm kicks you out as an associate, do they encourage b school. If b school was the encouraged, do they say or hint at hiring associates back after they get an mba. Just curious as to how these conversations are held, if at all

Corner Jump Capital, what's your opinion? Comment below:

Jumping in as well. Like the anonymous Associate 1 in PE, been in LMM PE for a year. Hours are almost exactly the same as what they mentioned. A couple other things:

- I have time to exercise 7 days a week.

- The team is small and I get to feel like what I'm doing matters.

- I get exposure to all sorts of business-related materials. I get pulled into strategy meetings, marketing meetings, sales meetings, etc. It keeps it interesting. I'm not just a spreadsheet jockey.

- Direct exposure to CEOs and management teams, lawyers, bankers, etc.

- Still learning a ton about finance

- I have a life outside of work

- The team and culture fits my personality

- I get to feel like we're actually growing something. Unlike in MFs or UMM funds, there is real room for value creation, rather than just financial engineering. Lots of opportunities to be creative with ideas, and I feel like even as a junior I can put out ideas that could have real benefits to our portfolio companies.

- There's no expectation of face time. If your work is complete or deadlines are pushed out, my boss will tell me I'm good to go home or work out. Incentivizes me to get my work done quickly, thoroughly, and accurately, because I know if I do those three things its more time for myself.

Disclosure that always has to be mentioned: YMMV depending on your team/culture/firm and you should vet these things thoroughly when interviewing / considering an offer.

Live. Laugh. Leverage.
  • 6
RandomWalkPE, what's your opinion? Comment below:

Having been at 2 LMM shops, I can't emphasis the cultural fit enough. You spend so much time with your team that it's crucial that you enjoy working with your team members. Now, that can be very hard to extrapolate from a few interviews but, in your interviews, be prepared with questions that can give you some guidance. 

Most Helpful
RandomWalkPE, what's your opinion? Comment below:

Some potential questions to ask or topics to discuss:

- Ask about how the deal teams allocate work and members interact. With my first associate experience, the deal teams had a structured chain on command, so I wanted to make sure my next opportunity was within a flat(ter) organization.  A flatter organization is usually more collaborative, which I view as a positive cultural trait. Also, you may hear a mid-level comment that they check all associate work, which could indicate micro-management.  Some people prefer micro-management but others struggle with it.

- It maybe be helpful to ask about any training program or onboarding for junior members. There usually isn't any formal process at a LMM fund, so it's likely baptism by fire. However, if the interviewers can articulate some high level program or even goals for new team members, it's a good sign that the firm is willing to invest some in the success of junior team members. Also, it could indicate that firm has the right people to coach/train junior deal team members. Not everyone (nor every fund) has that skillset.

-  If the senior or mid-level team members have worked together for some time, observe their interactions. Do they seem close, do they joke around? Or does it seem all business? This would probably be identified later in a process after multiple rounds of interviews. If you read the room and feel confident in the response, you could be more blunt and ask about the camaraderie and if the team socializes outside of the office.

Additionally, looks for clues in the questions the interviewer asks you or comments/remarks the interviewer makes to your responses. At my current role, I was asked about my interests outside of work, which is something my firm values. My interviewer (now boss) looked on those interests positively and commented that they shared similar interests, even as someone 20 years my senior. Also, I was asked about my work habits (up early or stay up late). Based on my response, my interviewer highlighted the firm's general philosophy on work/hours/WFH, which aligned with mine. 

Hope that all helps!

jamesbaldwin, what's your opinion? Comment below:

 Any suggestions for databases/lists of LMM and MM firms to network with/cold call to break in at the pre-mba level

  • 2
  • Associate 1 in PE - LBOs

Have been at a LMM fund for about a year (similar fund size, AUM, bite size, etc. as OP), and just wanted to echo all of the positives mentioned by the LMM comments in this thread. I was actually thinking about making a post exactly like this, but wanted to wait until the 2 or 3-year mark to give a more fulsome summary of my experience. That said, I can't say enough about the work-life balance and culture. Yes, the workload can be very heavy at times depending where you are in a deal cycle, how many live opportunities are on your plate, and what's going on in your portfolio, but generally speaking I have plenty of time in the evenings and weekends to do whatever I want (e.g. I workout 7 days a week and eat dinner with my S/O most nights). Sure, I've had my fair share of late nights and awkward work-during-vacation moments, but those are anomalies compared to my average day-to-day. My comp is slightly below 'street' but I'm also not living in a major city, so my taxes and COL help bridge the gap. I've been able to save >50% of my salary and 100% of my bonus and, like others have mentioned or alluded to, my firm loves promoting internally and spreading carry across its employees (to those who are in post-associate positions) so there is certainly room to grow. The senior team is heavily focused on culture, regularly coordinates happy hours and other events, and encourages the junior staff to take time off as much as needed. At the same time, the team is comprised of highly-motivated, disciplined investors and our funds have performed accordingly.

Every firm is different, though I think LMM PE generally offers a nice balance of work, lifestyle, comp, culture, etc., especially compared to most of the UMM / MF opportunities that many users on this site are focused on. I think a lot of monkeys who have burned out of their IB / PE gigs overlook the opportunity to move down market. 

  • Analyst 3+ in IB - Cov

What city is this in? Curious for recruiting purposes

finbrah, what's your opinion? Comment below:

Work in LMM PE. It's great. Everything everyone said is true. I make less than UMM/MF, you can keep the money. If you are a successful LMM PE guy, you're making multimillions per year while still being young enough to enjoy it and getting LTCG tax rates on most of it. For the overall package of comp/hours/type of work, I don't think you can beat it.

JustADude, what's your opinion? Comment below:

I may get monkey shit for this but LMM is very hit and miss. If you have top caliber partners who can easily source proprietary deals, hit solid MOICs, and continue to raise similar sized/slightly bigger funds every 3-5 years, then it's a great gig. But if you get stuck at a mediocre/poor performing zombie fund that struggles to win deals, which there are many of, then you'll be dealing with low comp, lack of a recognizable brand, and most likely bad culture as well. 

Also worth noting that the work required to close a $50M deal isn't THAT much less than a $500M deal. When you're deep in the middle of a live deal, you'll be working 80-90 hour weeks no matter LMM or MM/UMM. The comp, however, at the VP and above levels are orders of magnitudes higher because of the carry. 

  • Analyst 1 in IB - Cov

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  • Prospect in IB-M&A

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