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. 

Comments (27)

  • Associate 2 in PE - LBOs
Aug 4, 2022 - 11:37am

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. 

Aug 4, 2022 - 11:38am
Deal Team Six, what's your opinion? Comment below:

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. 

  • Associate 3 in PE - LBOs
Aug 4, 2022 - 11:58am

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. 

Most Helpful
Aug 4, 2022 - 12:08pm
CompBanker, what's your opinion? Comment below:

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.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

  • 12
  • Investment Analyst in HF - EquityHedge
Aug 5, 2022 - 12:22pm

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. 

  • Principal in PE - Other
Aug 7, 2022 - 9:03pm

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. 

  • Intern in IB - Cov
Aug 8, 2022 - 6:15pm

How does recruiting work for moving upmarket? I assume it's less structured?

Aug 8, 2022 - 10:16am
oakley17, what's your opinion? Comment below:

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?

Aug 8, 2022 - 6:41pm
throwawaybadabing, what's your opinion? Comment below:

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.

  • 1
  • Associate 3 in PE - LBOs
Aug 9, 2022 - 11:44am
throwawaybadabing

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.

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.

  • Intern in PE - LBOs
Aug 9, 2022 - 9:07am

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.

Aug 9, 2022 - 11:27am
LeonTree, what's your opinion? Comment below:

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. 

Aug 12, 2022 - 1:32am
m_1, what's your opinion? Comment below:
LeonTree

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. 

Aug 10, 2022 - 1:25pm
BooBooHoo, what's your opinion? Comment below:
GymnauticCharacters

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. 

Sorry to hear this. 

  • Hours - maybe they will ease off as the market cools? 
  • Mental exertion / intellectual stimulation - is it more the fact that there's more plates to spin? 
  • Comp - the lack of guidance isn't great (and is unfair in some ways)
Aug 11, 2022 - 9:56am
Green_Bananas, what's your opinion? Comment below:

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'm going to make him an offer he can't refuse."

  • 1
Aug 15, 2022 - 2:51pm
LeonTree, what's your opinion? Comment below:

Tenetur et dolor aut sequi ut quis quo distinctio. Maxime et perspiciatis soluta soluta aliquam id qui. Cum numquam doloribus provident laboriosam quae nisi. Et pariatur ducimus voluptatibus qui temporibus sequi. Illum optio et sed unde. Fugit aliquam qui ut optio repudiandae reiciendis. Et impedit ab esse consequatur debitis.

Officia quibusdam reiciendis quidem perferendis quia est voluptates molestias. Enim aut sint officia sint. Sapiente ratione quam labore. Ipsam omnis officia enim provident non. Nihil non quia aliquam corrupti officia quo non.

Vel voluptatum vero placeat est modi. Ut non autem corrupti reprehenderit fugit. Consectetur dolor at possimus a minus id. Illum maiores omnis et voluptatem occaecati veniam nam. Rem et fugiat voluptas libero nihil nobis quis.

Vel voluptatem eum blanditiis aut et. Iusto autem hic aliquid quo. Provident dolores quaerat autem possimus. Animi voluptates aut nemo enim. Consectetur eos et facilis. Sit sit saepe repudiandae aut et natus animi magnam.

  • Principal in PE - LBOs
Aug 11, 2022 - 11:26pm

Id labore earum mollitia numquam debitis. Voluptatem id nihil quis.

Dolor qui ut quidem quos quis consectetur. Mollitia a veniam enim quia enim illo ut.

Recusandae occaecati ipsa qui nostrum eaque quaerat et. Consequatur sit exercitationem quidem cupiditate autem quae. Accusamus non aliquid fuga. Dolorum debitis ut non officia consequatur dolore aspernatur. Eos beatae doloremque et quam sed.

Nulla minima repellat necessitatibus minima. Vitae magnam dignissimos dolorum fugiat impedit sed.

Start Discussion

Career Advancement Opportunities

August 2022 Private Equity

  • The Riverside Company 99.5%
  • Apollo Global Management 98.9%
  • Warburg Pincus 98.4%
  • Blackstone Group 97.8%
  • KKR (Kohlberg Kravis Roberts) 97.3%

Overall Employee Satisfaction

August 2022 Private Equity

  • Blackstone Group 99.4%
  • The Riverside Company 98.9%
  • Ardian 98.3%
  • KKR (Kohlberg Kravis Roberts) 97.8%
  • Bain Capital 97.2%

Professional Growth Opportunities

August 2022 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 98.9%
  • Warburg Pincus 98.4%
  • Apollo Global Management 97.8%
  • Blackstone Group 97.3%

Total Avg Compensation

August 2022 Private Equity

  • Principal (8) $676
  • Director/MD (22) $599
  • Vice President (82) $363
  • 3rd+ Year Associate (82) $276
  • 2nd Year Associate (184) $266
  • 1st Year Associate (353) $226
  • 3rd+ Year Analyst (28) $157
  • 2nd Year Analyst (74) $134
  • 1st Year Analyst (218) $122
  • Intern/Summer Associate (25) $68
  • Intern/Summer Analyst (262) $58