Warning re: LMM PE
This thread is more to vent than anything else, but just wanted to share that I've been working as a senior associate at a LMM firm for the past year or so after spending two years at a MF and two years at a top BB IBD group and this is by far the worst WLB of the three roles (exaggerating a bit here). For context, I'm at a relatively new fund with a very lean team so very clear path for upward mobility, outsized carry allocation, etc. which is why I chose to try this role out vs. business school or lateral to another large cap fund (also thought the lifestyle would be much better). Unfortunately, my hours are significantly worse than they were at the MF and the work is much more nitty-gritty portco management, process management, screening shitty deals -- way less intellectually stimulating while simultaneously requiring significant mental exertion. On top of that, I didn't realize how stingy the partners would be -- I was already taking a very significant haircut on base+bonus, but have gotten no guidance on upward mobility, sharing economics, etc. because the firm "doesn't believe in making promises." I don't think it's a performance issue as my feedback (both formal and informal) has been great -- it's just the way the firm operates.
All of this is to say, don't just blindly take a MM or LMM offer because you think it's a better lifestyle or has more upward mobility. It varies tremendously by firm and there are many places that have significantly worse work life balance coupled with weaker brand recognition and shitty comp, so be very thoughtful and do your diligence before accepting an offer at a place like that. Thanks for coming to my ted talk.
Good to have someone that’s had experience in all of the settings provide valuable insight. YMMV across all asset classes and my personal experience at a MF has been positive as well.
Thank you for sharing. I actually started a thread on LMM PE not that long ago and the consensus was good WLB, so I appreciate the counter-argument. Hoping you can lateral asap as candidly that sounds like an awful experience and one that is unlikely to get better. Sometimes seemingly great jobs end up being a huge disappointment, and I learned that the hard way with my last role. Hoping the situation improves.
What happened at your previous role?
I'll add in another anecdote along your lines: I know two people who both worked for the same LMM buyout fund at junior levels (in a non-tier 1 city) and both left for WLB reasons. They described it as "NY hours for much shittier pay."
On the other side of the coin, I know some people at different LMM firms who love their jobs. I know it's tougher for new funds, but anyone looking in the LMM world should pay close attention to aso/sr. aso turnover and try to reach out to former employees to learn what the culture is really like. Experiences seem to be pretty polarized.
Any chance you can give more details on the fund? City? Size?
It would be pretty identifiable if I got too specific as even their structure is unique, but mid-Atlantic city.
Your last paragraph captures it well — life at a LMM PE shop is going to vary wildly depending on the culture instilled by the founders / partners. Usually this is 1-3 people. If they are workaholic slave drivers, don’t expect any sort of WLB. If they are chill, big-picture type people, you could find yourself going home at 6:00pm most days. And of course, everything exists in-between.
That said, a few observations:
1) The work is definitely different, as you point out. The LMM is generally much more in the weeds on portfolio company initiatives. Some people love this as it gives them exposure to all sorts of operating company issues. Others hate it if they just want to focus on deals.
2) I don’t understand how you can view the job as way less intellectually stimulating but also requiring more mental exertion? What exactly do you mean here? I would think that the more you need to think / use your brain, the more stimulating it would be. I assume the fact that you don’t like the type of work makes it even more cumbersome on you.
3) Keep in mind that one of the reasons your hours are worse is that you’re utilizing and building a new skillset. You’re right that a lot of junior LMM roles include a ton of process management. That’s why many LMM shops hire from MM investment banks rather than bulge brackets — in the LMM, modeling is only a tiny aspect of the job while other deal responsibilities take priority. The skillset you’ve honed in a top BB and MF are relevant, but different, and in some cases may hinder you because the processes you’re accustomed to are different. The more time you spend in the LMM, the better the hours will be as you get up the LMM learning curve.
4) Pay is almost always less in the LMM unless you have very generous partners. That’s just the way it goes when you manage less capital. I suggest you find another firm with a better culture / WLB — you seem to have ended up on the extremely negative side of the WLB + pay distribution.
LOL. Sorry to hear about the pay. Also learned a great lesson early on about being at a small place with small dollars back in the day -> people who are there are generally stingy, and nobody pays you more than they earned themselves when they were your level...so it almost always disappoints. Lesson: don't go to small places unless you're willing to accept a lot less cash in the near-term. We all dream that the partners we work for are more generous than the stories you hear from others - but ultimately that's a low probability game.
My experience is consistent with the OPs. I ultimately moved up market for substantially better pay and WLB. The returns may be higher down market because there is more of a potential dislocation in value / easier growth paths for smaller businesses, but the deals are hairier. I am guessing what this is meant by the mental exertion comment - you are constantly managing minutia/trouble shooting process items vs. thinking more broadly from an investment perspective.
Did you move up market in PE or to a credit firm?
How does recruiting work for moving upmarket? I assume it’s less structured?
IMO once you are a few years post MBA / Director level then most of your qualified opportunities will be sourced through networking. The recruiters will still provide opportunities but if you are trying to make any shift then most likely it will be through your own contacts.
In a very similar situation, minus the WLB (not as bad as yours from what it sounds like). What is your compensation (salary/bonus/carry) currently (assuming you're Sr. ASO) and have they given you any guidance going forward?
From what I can see, I think some of the best risk-reward seats are at small funds getting launched within MF platforms. Clear upwards trajectory, comp is typically identical to flagship strategies (at least on cash), and opportunity to really stake out some lanes. Curious other folks' take on this.
Del
Purely anecdotal, but I was at a MF that launched a new fund/strategy and from the outside looking in, it can be a total shit show and very dependent on the top 2-3 guys. Same risk/reward as joining a start-up fund with maybe some better comp stability afforded by the broader org.
Agree, have seen a few of these fold up too over the years as people just can't get them to work the way intended. I'm not sure there is actually less risk other than the fact you're paid more in cash comp (which is a real pro)
Thanks for the insight. You should probably stick around one bonus cycle max to confirm whether or not they are trying to fuck you in the ass as you already suspected.
Another general LMM comment if others are considering - the investment strategy/focus/intensity feels more like people investing their own money. The wins are more celebrated and the fires feel bigger. A deal writeoff for a fund 1 or 2 in the LMM could be a firm killer. Obviously depending on who you are, this can be a pro/con.
Yeah and people investing their own money can go both ways depending on their temperament.
In regards to the comp point, did you not get a carry allocation up front? From your description this would seem to be the big upside to the opportunity so it would seem crazy to have just taken the role without locking that in.
Sorry to hear this.
I never understood the logic behind LMM having a better WLB. They have less resources, deal with way less sophisticated management teams, and have to hustle to "prove themselves". Why would any of these elements relate to better WLB?
I suppose less information = less to do, and generally less admin / compliance given fewer layers.
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