Top 3 day of my life. Coming off a huge run this year, opportunity opened up, and just got that PM promote.
I’ve gotten a lot out of this site so happy to answer any questions over the next few days. My background: 9 years out of school, 7 years on buyside. Moved from single manager, been at podshop for last 5 years.
Merry Christmas everyone, let’s have one.
| +27 | Fastes PM progression ever seen? | 31 | 1d | |
| +21 | Recommend Pass for MM HF Case Study | 6 | 1h | |
| +20 | Track Record Expectation For PM's | 29 | 2d | |
| +17 | How extroverted is the junior MMHF job? | 5 | 4d | |
| +17 | Why don't MMs do any activism? | 11 | 22h | |
| +16 | HF perspective on Google (Alphabet) | 5 | 4d | |
| +13 | Credit Pods | 6 | 4h | |
| +12 | Are you making money these days? | 9 | 3h | |
| +12 | Point72 Academy Case Study | 11 | 13h | |
| +11 | Stephen Moyer- Distressed debt analysis | 5 | 3d |
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Congratulations! As a new PM, what do you think you’d look for in an analyst?
Aside from the obvious ones (make my life easier etc), maybe more relevant for younger PMs, but I'm the kind of person that really needs to get along with their Jrs (same interests outside of work). So I'd look for jr's that are normal/not one dimensional. Also need to be teachable. For those 2 reasons I've ended up getting along nicely with a lot of the ex high school or college athletes I've worked with, think that's a common thread among many funds.
Someone I can trust. That's honestly probably the most important. You should be the analyst that the PM can trust even after joining the team 1 year ago or something. So normal, teachable/moldable, young (not someone with their own process/very senior analyst that'd older than me), someone I can trust, and of course, someone that works hard/knows what they're doing/knows their coverage
Amazing. Thanks!
Isn't it tough to get ex college athletes to forgo working out and sleep for work constantly?
If you need an ex athlete that's normal with 5+ years on the sell-side in TMT, let me know
Huge congrats, thanks for doing this. A few questions.
1. How many of those years were in public markets? What has been your comp over the years?
2. Do you have any guarantee or you could be out of the job in 12 months?
3. What advice do you have for people recruiting for SM/MM from PE?
1. 2 years of banking, 2 years SM HF, 5 years podshop, so 7Y public markets now. SM HF comp was 300 - 700. MM I was a more jr guy for 1.5 years and then ran sleeve for last 3.5 years. For the first 1.5 years at MM my comp tracked my SM comp, for the last 3.5 years it's been ~$1-5M. My comp has gone up quite linearly (many friends have more zig zag comp) since I got pnl linkage
2. Not getting into specifics but yes, some form of guarantee. I could be out of the seat in ~24-36 months if things go south, but fortunately I've had a pretty solid track record as an analyst so I don't think it'd be hard to get a seat elsewhere. I would leave PM seat if the right oppty opened up
3. Best advice I can give you is really know what you want. There's a very clear distinction between the podshops and SMs (stylistically). Said differently, if you want to be a pod PM, don't start at a SM - it's better to grow up in this model vs SM model. Do as much diligence as you can on the PM (I didn't do enough as a I-Banking analyst and ended up having a pretty bad relationship with my PM at the SM). The one thing I did right was probably skipping P/E, assuming your plan is to join a HF after. I think that saved me ~2 years of repetitive stuff I did in I-Banking. Most HFs will hire bankers, so there's really nothing incremental from doing 2 years of P/E. Something to consider
What percentage of your portfolio do you try to have deployed on average (ie what percent do you not keep as dry powder)?
How do you find a good PM? What if it's a new PM and you can't find anyone they used to work with?
What were your hours like throughout that journey and how's your life outside of work? What meaningful parts of your life did you prioritize?
How do you find a good PM? What if it's a new PM and you can't find anyone they used to work with?
What were your hours like throughout that journey and how's your life outside of work? What meaningful parts of your life did you prioritize?
A $5mm pay year and you're 10 years out of college. I really sipped that value investing kool-aid for real.
Biggest payday? What % of PnL did u get
~$5M, HSD. It was an awesome year
can I be your analyst
Congrats on your promote. I’m also curious about your comp progression, especially how it differed from your time at the SM vs MM.
Commented above. SM was 300-700, my first 2 years as a pod analyst were similar, then last 3 were 1 - 5M once I got pnl linkage. Think the key here is formulaic comp / don't think I could've replicated the same comp ramp at the SM fund. Pods offer that
Hi thanks and congrats on your promo.
1. What’s the best sector you think to be in MM structure in terms of risk/reward and career?
2. What do you think that eventually got you a promo from analyst to pm?
3. How did you choose pm(s) you worked for and what a junior analyst should look for in pm? Anyway to do due diligence on pm?
1. Someone asked me this the other day and I don't have any strong views. The goal is max(1. longevity (don't cover sec decline), 2. career r/r, 2. pnl potential). 1. is tied to the nature of the sector and how interested you are in said sector (I'd shy away from oil gas/energy even if you love it. Don't take the job covering staples if you love software). Many ways to make money. In MM structure, just need big liquid pairs which can be found in most sectors ex energy
2. don't want to comment too much on this other than mix of performance and an opening
3. Make friends with analysts at podshops before you join (if planning on joining). Bug them about finding incremental detail on said PM. Since they're inside they'll be more informative than any other source you can find externally / any read you get from meeting with PM tbh. Track record, "normalness", tenure, are they a good teacher, background (came from SM? grew up at pod?), have many analysts left them? have they bounced around?. Very important, but try to estimate how much they made last year (good proxy for years of runway you have as an analyst until they retire...)
Are we at peak pod currently? Overarching sentiment is that pods > beta riding SMs, wonder if you think the pendulum has swung too far?
Do you recommend starting off at a pod from undergrad if you know HFs is where you want to be? Don't really care for optionality, pods seem to be the no brainer.
Congratulations on the promo - good luck building out your team!
peak pod? No I don't think so. The really tiny value SMs that own shitcos might be able to continue to do well, but I wouldn't really want to be an analyst there. For the broader typical L/S SM funds, they'll probably continue to be share donors. I haven't really been impressed with any of them. Very tough for any SM fund to compete with a podshop offering PMs 17-20% pnl on huge books and analysts pnl linkage on large sleeves. Today's incremental allocator doesn't view duration as an edge anymore...
I think if you can get into those entry-level podshop analyst programs if you want to be a career-HF guy, then it's absolutely a no brainer. I would've loved to have done that instead of i-banking. And training seems so much better than whatever I received at my SM ha. My understanding is the programs place you straight into a team, so you save yourself the i-banking/P/E years...that's huge. If the end goal is HF why wouldn't you jump straight to HF, if you can? What did you mean on optionality - going to other funds/SMs?
Thanks!
Congrats! Couple questions — did you hint at wanting to be a PM or how was the PM promote brought up? How are you planning to manage or balance focusing on the research aspect vs risk mgmt aspect of the PM role especially after a research heavy focused (I assume) analyst role?
Did you have a sleeve? If so, what Sharpe/PnL since you got it? If not, how did you swing this?
Assuming L/S equities?
Payout % + book size?
Are you hiring?
Congratulations on the promotion! To what degree can you fit SM style investment thesis in a MM risk framework? What is the most common mistake you see in junior analyst’s models? Favourite non-consensus investment/business book?
Massive Congrats and Merry Christmas! Do you have any good recs such as literature/books/websites that you frequent to build your understanding of your world view? and what was your motivation for being in HF space?
Congrats mate and merry Christmas!
Congrats mate and merry Christmas!
Level of pressure / PnL immediate or do you think you have to see how things play out over time?
Congrats king. A few questions,
1- Can you expand a bit on making the jump from SM to MM shop. Recruiting, difficulties encountered, etc.
2- What's your niche within HF land (strategy & asset class)... or, if you can't get too specific there, are you more traditional/discretionary or quant/systematic?
3- What do you think was the biggest factor in getting the PM promo beyond of course performance - visibility, relationships, savvy self-promotion, luck, etc
zesty
Reading this made me smile, congrats!
1. Where did you start your career? (IB? Sell-side credit/equity research?)
2. Do you feel like you’ll live and die by your PnL in this role or do you think it’s more so your soft skills (managing a team, dealing with clients, etc) that let led to your promotion?
Dealing with clients? lol?
I mean, very rarely, but some PMs (when senior enough or they have their own extensive connections through their career - possibly even before going to HFs) will join client meetings.
It’s more of the LP/investor money which he participated in, but I do think it’s a rare example. And a PM should be more focused on running his own book than starting to look at raising capital. Perhaps he’s going to be promoted soon? Idk about that.
Source: Ignore tag, have a good friend at a MM shop that knows a PM doing something like this, but very rare case.
I mean, very rarely, but some PMs (when senior enough or they have their own extensive connections through their career - possibly even before going to HFs) will join client meetings.
It’s more of the LP/investor money which he participated in, but I do think it’s a rare example. And a PM should be more focused on running his own book than starting to look at raising capital. Perhaps he’s going to be promoted soon? Idk about that.
Source: Ignore tag, have a good friend at a MM shop that knows a PM doing something like this, but very rare case.
Typical WSO AMA.
”I crushed it. Ask me anything” = “Kiss my ass while I disappear”
It’s Christmas…I’ll start responding tonight if I get a chance
Read his replies. This is pure fiction.
there was "an opening"
.. cause that's how MM's do PM selection lol
I don’t think so
Plenty of MM analysts make $1-5m at bigger shops in good teams and plenty of them make PM promote?
Congrats!
Congrats!
1. How feasible is it for someone with an engineering degree and no previous finance experience to enter the industry?
2. If it's feasible, what would be the differences between breaking in after a masters degree vs transitioning from an engineering job?
3. How do you plan on changing your mindset to better fit the 'pm mentality' from the 'analyst mentality'
4. What do you think will be your edge as a PM?
What is the best education for stepping into HF would you say? Just target or more Math & physics?
Why would you think those would help lol
Great AMA. Not a single response!
There we go, nice replies!
What advice would you give to someone at the analyst position -> running a sleeve transition? Ignoring obvious things like know the positions in and out, factor exposure, etc. any nuances you wish you knew going into that step?
Does your firm have any target banks they like to hire from? Also, what's your asset class?
This has been discussed before on this site, but curious to hear your specific thoughts. Is there any tangible difference between the big 4 MMs in terms of comp, stability, and progression? Also, what do you think of the MM grad programs such as Point72 Academy/Citadel CAP in comparison to the traditional route to hedge funds?
Congratulations!
In addition to the more specific/job related questions, just a few fun ones from me:
1. What do you spend the money on, especially as it should still be very busy for you?
2. Do you have a retirement figure in mind?
3. What kind of opportunities would you leave the PM seat for?
How was your transition from SM to MM? Was it an obvious move or did you have any doubts, and did you have to "lateral in place" or did you move seats and move up in seniority? Asking as a SM analyst who is thinking about moving but hesitant to start as junior analyst in a pod given ~4 YOE (incl. sellside exp)
If you had an opportunity to join a MM or a spin out started by a top performing PM previously at a MM which would you chose? Would assume you’d say MM based on your previous responses, though not sure if the SM displaying previous success at a MM and replicating the same style at their fund changes your answer
Congratulations! Thanks for doing this. I'm an analyst with few years of experience and debating with myself whether I should make the move. To me it seems extremly challenging/critical to manage risk even with good alpha/process. What is your vision for properly managing risk? Do platforms generally provide good risk management tools or better to have your own process?
Great AMA…
$5mm bonus as an analyst running a sleeve is impressive - at hsd payout suggests $50mm+ of pnl. Can you talk about your risk parameters, eg capital, drawdown etc.
Thanks for doing this helpful AMA. I’m wondering — what in your experience is a good framework to find an ‘edge’ / develop a strategy for building theses? How did you find yours, and what helped (great resources and mentorship at the firm, independent study, practice of a certain kind, using particular analytical tools, etc)?
If you do answer, thanks a ton in advance.
If and how did you a) manage transition from SM to MM and b) manage tenure at MM opposed to SM’s tenure. What resources helped best for risk mgt and portfolio construction? I see many guys struggling with this kind of move as SMs lack good risk management and many run directional strategies.
Bro said “Ask Me Anything” not “Answer Me Anything” and he is very committed to the bit
OP, I think you’re full of shit. Canned responses, questionable numbers, no specifity, dodging questions. It’s unfortunate you are spending so much effort trying to mislead people. You are one very insecure person.
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