Moving from LO to MM as an experienced analyst / junior PM
Associate PM at long-biased, sector-focused SM with 10 YOE (3 IB / 4 PE / 3 pub equities, all in same sector). I'm considering trying to move to an MM from SM, mainly because I'm at a point where I can sacrifice relative stability for upside. I have a couple of years of outperformance vs. sector index, but I'm assuming an MM won't care given its not in a market neutral construct. Is there a path to move to an MM from LO and avoid having to start over as a junior w/o direct P&L linkage? Would something like P72 Launchpoint or other emerging PM programs give me looks, or do these programs only source from senior analysts/junior PMs with an existing l/s track record? Hoping to get some advice on best r/r and most realistic path. Thank you.
Based on the most helpful WSO content, transitioning from a Long-Only (LO) position to a Multi-Manager (MM) hedge fund, especially with a background as an experienced analyst or junior PM, involves several considerations. Your experience in a sector-focused, long-biased SM with a decade of experience across investment banking, private equity, and public equities is impressive and provides a solid foundation. However, the move to an MM hedge fund, particularly for someone seeking to leverage their sector expertise without starting from scratch, requires strategic planning. Here are some insights and strategies that might help:
Leverage Your Sector Expertise: Your deep sector knowledge is a valuable asset. MMs often look for individuals with a strong understanding of specific sectors. Highlight your outperformance versus the sector index and any unique insights or methodologies you've developed. While you're correct that MMs might initially be less interested in performance outside a market-neutral context, your sector expertise and ability to generate alpha can still be very appealing.
Emerging PM Programs: Programs like P72 Launchpoint are designed to identify and nurture talent capable of running their own portfolios. While it's true that many of these programs tend to favor individuals with a proven track record in long/short strategies, your unique background and demonstrated outperformance could make you an interesting candidate. It's worth reaching out and positioning your experience as bringing a different perspective to the table.
Networking and Direct Applications: Utilize your network to connect with individuals working in MMs. Sometimes, a direct referral or a conversation can open doors that traditional application processes might not. Additionally, consider applying directly to MM funds that are known to value deep sector expertise and might be looking for someone with your background to diversify their investment strategies.
Highlight Transferable Skills: In your applications and conversations, focus on transferable skills such as deep analytical capabilities, a strong track record of investment decisions, and the ability to manage and assess risk. These are crucial in any investment role and can help bridge the gap between your LO experience and the requirements of an MM position.
Consider Starting as an Analyst: While you're looking to avoid starting over, being open to a senior analyst role at an MM could be a strategic move. It allows you to demonstrate your value and understanding of the MM environment directly. From there, moving up to a PM position, especially within firms that value internal talent development, could be more straightforward.
In summary, while the transition from LO to MM, especially for someone with your background, has its challenges, it's certainly feasible with the right approach. Highlighting your sector expertise, leveraging emerging PM programs, networking, and being open to roles that allow you to prove your worth within the MM context are all viable strategies.
Sources: PM / Sr Analyst at MM HF to LO PM -- doable?, LO to MM HF?, PM / Sr Analyst at MM HF to LO PM -- doable?
Thank you for the encouraging words, Monkey Bot.
A lot of MM are in a market neutral construct. They get paid for beating a bench mark. I think your sell would be a long/short equity blend, or a macro pod.
Build a business case about how your strategy works, how much capital you need to get started and with what type of scale potential, what tech/setup do you need to be successful, etc.. and then just approach a few MM biz dev guys and make your pitch. Sell your idea, if they think you’re credible they will assign you to an existing pod or let you create your own.
Disclaimer: make sure you really know what you’re doing. I’ve interviewed “portfolio managers” from “smart beta” shops (aka button pressers) and they have no clue what the fuck they’re doing, they talk with high level jargon which probably sounds impressive to a factory worker who just learned about compounding interest, but these PM’s can’t actually replicate anything on their own. I’m sincerely hoping you’re not one of these folks.
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