LMM Associate / Senior Associate -> VP Progression (Years)

On average, how many years should you expect to be an associate / senior associate before promotion to VP at a LMM fund, assuming you are performing well? I've seen some LMM firms with associate and senior associate programs of 5 / 6 years (collectively). At that rate, it would almost seem better to join a 2 year associate program, go to business school and then return to the industry.

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Comments (9)

  • Principal in PE - LBOs
May 4, 2021 - 1:58pm

The most common path I've seen is 2 years associate -> 1 year senior associate (optional) -> MBA -> VP but tons of variation. Promotion paths as long as 3 years associate -> 3 years senior associate are relatively rare but not totally unheard of. In general the firms with shorter tracks tend to want you to get your MBA while the ones with longer tracks intend to have people stay on so it's really a wash (ex. MBA tuition/opportunity cost). I think some firms (GTCR comes to mind) will let you do either but you save one year if you stick around vs. go to business school. 

May 4, 2021 - 2:43pm

Appreciate the response. I have been guided to a 5-year associate / senior associate program before promotion to VP at my current firm and honestly I am feeling frustrated and taken advantage of. I recruited in the LMM for faster upward mobility, which was promised at the outset at my current firm during interviews. However they have not lived up to the expectation. 

  • Principal in PE - LBOs
May 4, 2021 - 3:45pm

Yea that kind of sucks, especially when you're not comped according to the value you're adding. The nice thing about LMM at least is that responsibilities are fluid so even as a third year associate you could be operating effectively as a VP while the kids at MFs are still grinding away on models. 

May 4, 2021 - 4:00pm

Agreed there is value there but it also compounds the frustration at the same time. I'm acting / performing as a VP yet having the title and comp as a senior associate.

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May 5, 2021 - 7:25am

I've seen anywhere from 3-6 years as associate (lumping in senior associate to this) before promotion to VP. Feel like 3-4 should be the norm for the reasons you described. If a fund is going to make you spend 6 years as an associate, why not just go to business school, have a nice two year vacation, and come out 2 years ahead of where you would have been at the current fund? Only downside is the cost of business school, although in the long-run if you stay in PE, it won't make much of a difference.

Put it this way, I'm a third-year associate, and if my fund told me I had another 3 years to go before VP, I'd either be looking to lateral or apply to business school right away. 

May 5, 2021 - 8:58am

4 years to VP (2+2) is the industry norm from what I've seen. Anything much more than that is probably a sign of title suppression (ie, stalling on granting carry or don't want to threaten senior staff) and/or underperformance and means you should consider leaving. 

May 5, 2021 - 12:40pm

As other have mentioned above I think the general timeframe is 4-6 years. It somewhat depends on your years of experience beforehand as well. If you're a little more of an experienced hire coming in, even if it's not from a strict PE background you might be able to move faster. If you were just a 2 year analyst before, it might take closer to 5. With that being said 4/5 at the LMM feels about right, if a firm is taking much longer than that, then it's either a firm or personal issue and I would be sure to dig into that with the partners.

You should spend ~2 years as an Associate and really prove out that you can handle all of the analytical deal work well and start trending towards more deal lead, negotiation, portco management, etc type of work as you get towards the end of the two years. If sourcing is a thing at your firm, obviously showing willingness and proficiency in that as well. Senior Associate you should be able to both run and lead analysis, but also start showing signs (if you're not actually doing) of being able to completely lead a deal from end to end. Having the presence to lead diligence with management, to prove to others you know what you're doing, and to manage both above and below you successfully. VP is a culmination of these things, but then you start adding on outside of deal experiences such as significant sourcing, board roles, really thinking about maximizing value at companies in addition to making sure that deals are completed perfectly with no mistakes from Associates/Senior Associates.

That's not a hard and fast progression, but that's how I thought of it for myself. You need to always be doing the work of the role one step ahead of you in order to be promoted. I think a lot of kids get mad because they spend 3 years at Associate instead of 2, but if you actually look at their performance, they're not speaking up in meetings, training more junior associates, trying to really understand deal dynamics/ legal negotiations etc, they just keep running the model/IC deck and expect to get bumped up. Part of getting better at PE and thus moving up, is understanding the broader picture of what a PE professional should be doing. Running a good process starts to become a given, beyond that it becomes, can xxx gain the trust of a management team such that when a tough decisions/conversations need to be had can that person take those on. Do I trust xxx to fly to a city, pitch the firm well, and build sourcing relationships. Is xxx thinking critically about maximizing the value of our portcos and contributing to board meeetings/events as well as thinking outside of the board room on what the company needs. 

At the end of the day you're trying to invest well and make money, but all the nuance in between is what separates the roles. It gets to a point where just checking off the bullets on the job criteria won't get you bumped up. Similar to an investment thesis, you need to convince all those around you of your ability to be a complete PE professional and presumably, one day become a principal/partner at the firm. Thinking about it from a higher level perspective from time to time will help with advancement.

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May 2021 Private Equity

  • Principal (7) $694
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  • 2nd Year Associate (127) $250
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