Leaving large SM - Career Advice Needed
Hi forum,
I am in a bit of a tough situation - I am currently working as a junior analyst in a SM fund with >$10bn AUM and a small team. I am in my lower mid-20s. My comp isn't great (approx $145k all in), with 1 year experience in equity research type role beforehand, and 1 year of unrelated work experience. The firm I work for is very well respected and in general the other members of the firm are quite smart, and very well compensated (at partner level). Although, my "direct manager" is an asshole, and is quite incompetent, but the head of the firm has a lot of time for him given his prior credentials (seemingly ignoring his lack of value add on literally everything he does). He doesn't make any effort to give me any exposure to any interesting tasks, and I mainly do boring/monotonous/low skill work. He has also given me no transparency on my comp - I have asked, and he said it might grow slightly next year. Another member of my team who joined a year prior to me, told me their comp grew by ~10-20% in their following year. I have spoken to the head of the firm stating that I am not happy, and he really gave me no reassurances. He simply stated that I will get out what I put in and if I work hard and make a difference I might make partner in 6/7 years, "which is very lucrative".
On the other hand, I have an offer for a role with a firm offering approx $210k all in. It is more of a central function role within another MM hedge fund, not as close to the investment team. This means there is less of a linear path to partner/significant comp growth. I feel like I would learn more in this role and get along with my boss better, but the upside in comp and exit ops are definitely more limited.
Does it make sense to take the role that offers ~40% more in total comp short term, to work with a boss I will get along with a bit better, and learn something on a daily basis (whether relevant or not to investing) - obviously earning significantly less on a 5+ year time horizon? Or does it make more sense to stay in one of the more well established and respected SM funds working under a boss I don't get along with, with no significant daily development in terms of my learning/development, in order to have a shot at becoming partner in my early 30s (probably earning high 6 figures/low 7 figures)?
Any advice, things that I should be thinking about, insight, or anything that might help would be greatly appreciated.
Thank you :)
Why not lateral into another SM or an investment team in MM?
Quite a few of the large SMs have agreements not to hire from each-other (including my current fund), so this is probably not doable given that everyone is connected across these top funds. I have explored this a bit.
I have had an offer or two from MM pods, but I feel like this is a very short term move given the average tenure of a pod is so short. The learning and development aspects of MM pods is also generally non-existent. The comp I was offered for the first year was also less than the other offer I had. Also - I have been advised that the upside in MM pods is when you are senior and can get p&l linkage, and have good prior experience/credentials as a back up.
Maybe I am wrong?
I’m very surprised that you’re apparently at a well respected SM but only on 150 all in? I’m pretty shocked. Are you in NYC? I also am shocked that pods have offered you so low. If you’re at a well respected SM, MMs pay a lot of money to get you over. Something feels off but if I were you Id try to move to another fund that doesn’t have ties with your SM. There surely are a number out there. Likes of Elliott or DK or whatever
You're massively pre-empting yourself with this, and I think you have it wrong. Maybe Tiger cubs don't poach from other Tiger cubs and such, but otherwise it's a massively competitive market for talent where there is little room for niceties like that.
Get in front of the recruitment firms and let them know you're looking. If there are any conflicts, they will navigate them for you.
Always be LT greedy. Don’t make decisions to make a little more money now. Make decisions to make a LOT more money later.
Is money the only factor I should be considering? Obviously becoming partner and earning 7 figures in my early 30s (all going well) is an opportunity that probably won't come up often elsewhere - but if I am not happy with my current boss and current day-to-day work, is it worth it?
Should I try utilise my new offer to get increased comp in my current firm, and a change in my day-to-day work? Or is that not wise given I have already spoken to the the firm leader and he essentially told me he doesn't care. My recent performance has suffered slightly as my headspace has been all over the place the last few weeks trying to think of what to do, so maybe I don't have to much leverage atm?
That’s tough.
I think a common misconception is you can’t learn in pods or you can’t make 7 figures in pods. Successful analysts at large tier 1 MMs (think P72, Citadel, Marshall Wace) definitely earn 7 figures, even multi 7 figures after as little as 3 years of experience (you just need to contribute P&L).
Of course unsuccessful teams get blown out quick. But if an average SM was down 2 years in a row, would they survive? $5bn+ SMs are a bit of a different game, like you said - stability, “prestige,”and long term DCF (big IF as there needs to be a path to partnership/equity which is mostly just up to the founder). And 2022 is showing stability is not a sure thing necessarily even at these funds.
I suggest deciding what you want to do. Having a more impactful career in a more risky setting, hopefully with a boss / mentor who’s also trying to make it and teach you? This applies to both MM or a younger SM that is likely not part of that SM “inner circle” that don’t hire from each other. Or being at an established single manager with less risk but longer horizon to impact (with minimal mentorship which is specific to your situation)?
Some MM PMs are great mentors. Just like some SM PM/founder are great mentors (and some are assholes). It has nothing to do with the fund structure, it’s a human business afterall.
Comp is by no means the end all. Personal happiness matters more. But will you be happy in a middle office role? My point is much more: don’t chase short term comp bumps in exchange for impairing your trajectory or happiness.
I wouldn't join the MO of a MMHF from your current role. You're not being paid a lot, and the learning may have stagnated, but at least it's an investment role. You can transition from investments to a central role, but you can't as easily go the other way. For 50k/year it's definitely not worth it at all.
Given that you think your learning has stagnated, I would consider interviewing at a MM pod. They'll pay you minimum your current salary in base alone, the learning opportunities are better than what you have now, and they don't adhere to anticompetitive hiring protocols. Think about your downside here: if the MM role works out, you can have a genuine career progression. If you fail, you can pod hop and be no worse off from a pay perspective compared to right now.
I am technically a 'research analyst' within the investment team doing research on a particular piece supporting investment decisions. Therefore a move to a pure investment role might be difficult. Any advice? Can't provide much more info on my exact role as I don't want to stay confidential.
Making a guess about where you are I know a friend from that role, if you have a banking background and can model, try to move to a smaller SM or an MM into an investment role - I think primary research only analysts often don’t get thought of as the ‘real’ investment team in the type of funds that separate out the two - in fact sometimes the role exists to avoid hiring someone that needs to be paid/promoted similar to an investment team member. MM investment role would probably be feasible or smaller/new launch SM that can be wowed by the brand name is what you should aim for to get to PnL responsibility
bump
I'm amazed you work at a $10B SM and make $150k.
Short answer - don't leave the investing role. Hit up Dynamics, SearchOne etc and find another investing seat.
I am technically a 'research analyst' within the investment team doing research on a particular piece supporting investment decisions. Therefore a move to a pure investment role might be difficult. Any advice? Can't provide much more info on my exact role as I don't want to stay confidential.
Should aim to take the MM role, should let them know you have offers for higher comp and get them to match.
I thought the common advice was never to take a 'counter-offer' as it will lead to problems further down the line? Also, is it not very unlikely that they will give me a 40-100% comp increase?
Not sure what advice is given out. This is an industry driven by comp. These firms give out 7fig guarantees and some of the highest salaries to juniors. So not sure why anyone would be upset with a counter offer.
They expect to pay market or “pay up” if the person’s knowledge is worth it. Your current market is your current comp and established your firm does not raise pay that much, they pretty much know this as well.
Your new “market comp” is your current offer elsewhere you can take so that should become the new baseline per this thread. Very well you they could come within 20-25% (heck match it) but again the MM investment role has more upside than mid-office role so if not 100% match something to consider.
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