Path to starting a small LMM firm (fund of $200-$300mm)
Curious when the exit ramp of UMM/MF PE is to when you can start a fund. I have a strong thesis for somewhere in the LMM that is under-saturated with investment capital. Obviously, I am still a number of years away. But I would like to start reading about doing this.
Depends on who else you are teaming up with.
If you are the lead person and want to raise institutional capital (e.g. SWF/Pension) then you would need to show significant experience with a good track record (10 years+). However, you may be able to raise from family offices etc with less years of experience but think a strong track record will still be required.
If there is enough gray haired individuals as part of your team then do it now. The sooner you start your own fund the better as it can take 10-15 years before you really start cashing in the big carry checks, assuming enough deals work out.
For a reference point, know of a guy who just started a LMM fund. He was a VP at a UMM and is teaming up as co-managing partner with a MD of a MM.
From what I've seen, it's pretty tough to do on your own unless you're a partner. Have seen VPs go with partners that spinout new funds and get some nice economics/title bumps as a result.
Pretty hard sell for an LP to stroke you a check if they have zero clue who you are, regardless of your thesis.
I’ve seen this a few times. It’s typically with a newer / next generation partner at a fund where it’s going to take a while before the senior partners are out of their seats
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