Leaving MF PE for MM PE?

Finishing up my first year in MF PE and thinking about leaving for comp reasons (lifestyle and culture reasons aside). I have glorified MF PE for a long time so this feels odd, but as I stay longer it feels difficult to achieve a right-tail upside outcome. Wanted to see everyone's thoughts and see if I am missing something obvious.

MF PE delivers the highest risk-adjusted compensation in PE (I would guess 25-40% cash comp premium to MM or UMM) but given the business model and maturity of the funds, there is much less possibility vs MM to hit it big. It almost feels like working at a bulge bracket bank some days, both in terms of lifestyle but also in terms of senior compensation.

  1. There are fewer assets in the space and all of them are fully banked (much less proprietary deals vs MM). Bankers will demand a full purchase price upfront
  2. Larger companies grow at a much slower rate in general, so investments generally have lower returns just by nature of size
  3. Pure-play PE is not the focus of MFs - they are highly focused on total platform management fees, and are focused on raising more AUM in non-core PE segments
  4. This makes sense given the nature of MF PE LPs - very large pools of pension or sovereign capital which will accept lower returns for broad allocation into private markets (AKA, they will take $1B at 11% net IRR vs having to find 10 managers at $100M 15% net)
  5. As a result, the pure PE fund sizes have stayed relatively stagnant, and as most carry is already allocated, there is not much carry for new VPs/Directors/Principals/MDs/Partners given the zero-sum nature of the carry pool. This is in addition to the lower returns on that carry vs. MM carry
  6. Not to mention, the lifestyle / corporate culture at MFs is unilaterally brutal

As a result, I am looking at funds with <$5B in latest fund size and strong performance (aka can grow into the next MF over the next 2-3 cycles which aligns with my career). That is not an easy task either - curious if any names stand out or if there is a best methodology to searching. Am I missing something here or is my logic sound, and most MF PE midlevels today are just risk averse and care about prestige + maximized risk-adjusted compensation?

 

If David Swenson can't manage to beat the PE index with the amount of access that he has

then I imagine it would be somewhat hard to identify a PE fund that can deliver the kind of upside that you're looking for

 
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