I'm an analyst in my late-20s at a small boutique sell-side research shop. Pay is $175-200K/year. I was recently approached by a large MM buy-side HF about an analyst role they're hiring for, and am now in the later rounds of interviews. My question is, what should I do if they offer me the position?
On one hand, I'm very comfortable where I am. Work/life balance is good, I have a lot of autonomy in where/how/when I work, and the small firm size ensures I feel valued and my voice is heard. I'm someone that would like to have a family within the not too distant future, and this role would allow me the time and flexibility to make that possible.
On the other hand, our firms revenue has been declining for years, and there's essentially no remaining room for upward mobility (pay or otherwise). I'm also concerned that if I want to make a move later on (or if my firms revenue continues declining) that small sell-side boutique experience won't be nearly as marketable as the blue-chip credibility of working at the large MM hedge fund.
I haven't talked numbers with the hedge fund yet, but I'm guessing they'll offer me a base slightly above what I make now, but with a bonus that could double that amount if performance is good. It would also require me to relocate to NYC, which I'm not totally opposed to, but would prefer to avoid.
TL;DR: Is the extra money and better name on my resume worth having to move to NYC and give up a fair amount of my flexibility/autonomy/free time? I don't have any experience working at a large MM hedge fund, but I'm guessing that the hours will be long (60-80/week? more?), and the environment will be intense, but that the compensation upside will be essentially unlimited as long as my performance is good.
I realize this is somewhat of a personal question and depends on my preferences (money vs. free time, etc.) but any feedback on whether I'm assessing the decision correctly or advice on what to do would be greatly appreciated. Thank you.
Based on the most helpful WSO content, this is indeed a personal decision that hinges on your long-term career goals, risk tolerance, and lifestyle preferences. Here are some factors to consider based on similar discussions:
Compensation: While the base salary at the large MM hedge fund (HF) might be slightly higher than your current role, the potential for a significant bonus based on performance could substantially increase your total compensation. However, this is often accompanied by higher expectations and pressure to perform.
Work-Life Balance: You've mentioned that your current role offers good work-life balance and flexibility, which is conducive to starting a family. HFs, especially larger ones, can demand longer hours and a more intense work environment, which could impact your personal life.
Career Growth: The declining revenue and lack of upward mobility at your current firm are valid concerns. A role at a large MM HF could offer more opportunities for career advancement and a more impressive brand on your resume, which could be beneficial if you decide to move on in the future.
Marketability: Experience at a well-known MM HF can be highly marketable and may open doors to other opportunities in the industry that might not be available with boutique sell-side experience.
Location: Relocating to NYC is a significant consideration. It's a major financial hub with plenty of professional opportunities, but it also comes with a high cost of living and potentially less personal space and time.
Personal Preferences: Ultimately, your decision should align with what you value most. If family and free time are priorities, and you're content with your current compensation, staying put might be the best choice. If you're driven by career growth, financial rewards, and can handle a more demanding work environment, the HF role could be the right move.
Remember, there's no one-size-fits-all answer. Weigh the pros and cons in the context of your personal situation and career aspirations. It might also be helpful to reach out to mentors or peers who have made similar transitions for their insights.
Sources: Crazy to take MM offer if lead analyst in ER?, HF Analyst: The Things I Know For Sure, Big LOs, Leaving buy-side and going back to sell-side, Life decisions...buy-side equity analyst
Even if you are a VP, you will likely come to a big MM in a junior role with fast track to Analyst, i.e. you are now just dreaming about "unlimited" upside, be real - your life for the first few years depends on the PM who hires you, even experienced PMs can go out of biz anytime and yes that happens more often than you'd think. Your on the job happiness level will also largely depend on this person's personality.
I made the decision to do it because I was in my early 20s, no debt / family plans anytime soon, and in the first year I saw a huge amount of turnover vs what I had seen the past years in IB, honestly it was a bit frightening at first but then I got used to it - some colleagues on the floor disappear every few months. If you have the guts to have a family soon and do this then do it, lots of senior analysts / PMs have family but I have to say they are not some avg folks I have come across in my life. 60hr is impossible (Xmas season yes..), it's a highly competitive small world and you have to put in the work to succeed, not to mention that returns are not like sell-side year-end review (where you get the results / get paid most of the time if you work hard). If you are mentally strong enough to handle the lifestyle then you will do just fine.
Think of it this way, if you get paid the same, would you still do it? Are you happy to stuck with the PM you are interviewing with imagine your life depends on this person?
Some good advice above. Will further emphasize how important your future boss/PM is and the relationship you have with him/her as it’ll dictate 90% of your experience.
Couple other things. If there is no upward mobility at your current sell side shop, have you considered moving to other sell side firms? You’d likely get a material pay raise and/or promotion and it would be a very smooth transition
As for moving to the MM, I’d try to probalistically size what youd make on a 2-3 yr time horizon vs staying on the sell side. Be sure to risk weight and bake in getting a 0 bonus in at least one year + Keep in mind churn is high and most don’t make it to y3. May still be worth it but have to set reasonable expectations
Echo everything here; I honestly wish I saw this post before I moved to my current seat (big 3 platform)
What more can you share about your experience after having now made the move?
Thank you, this is really helpful. A few follow-up questions:
- You said 60hr. weeks are impossible. What's a more realistic expectation?
- In the cases where there was turnover, what was the main reason? Just poor performance? My thinking is that if I can even make it 2 years there, having the name on my resume will still be a big career boost vs. doing 2 more years where I am, but maybe I'm wrong.
- What are realistic comp expectations for the first few years? Why would it not be based on results?
If I got paid the same, I absolutely wouldn't do it, there would be almost no reason to relocate and give up that much free time if I'm not getting compensated for it. But, my impression was that while comp upside at a large MM hedge fund is maybe not "unlimited", it would still be in a whole different ballpark than where I am now.
What responsibilities/seniority and coverage will you have? How valuable is your skill set and how much does the PM want to hire you? Have you asked for a y1-y2 comp range? We would be shooting in the dark here without more info. You should also secure a year 1 guarantee
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