Thoughts on MMF
Posting anonymously but I've spent most of my career doing distressed credit/special situations/high yield at funds with more long-term locked up capital (think of the likes as a Oaktree, SVP, Monarch, Redwood but on the smaller side).
Have an offer from a smaller/lower tier MMF (think Verition, Walleye, Brevan Howard, Hudson Bay, etc.). New to the world of HFs and looking for advice on pros/cons as well as information about the different tiers (I would be coming in as an analyst).
Seems like theres a "big four" when it comes to MMF (which I would not be at) - how much does that really matter outside of pay? At this point of my career, having something more stable would be key (if there is a difference between big four and a lower tier MMF).
I'm assuming a lot of factors will deal with the pod/PM that I would be directly working with. What are some questions to ask to get a better understanding of longevity of the platform, stability, etc.?
Based on the most helpful WSO content, transitioning from distressed credit/special situations/high yield at long-term locked capital funds to a multi-manager fund (MMF) can indeed mark a significant shift in your career trajectory. Here are some insights and advice regarding your move, focusing on the pros/cons, the importance of fund tiers, and stability considerations.
Pros and Cons of MMFs:
Pros: - Diversification: MMFs often have a diverse range of strategies within the same fund, which can provide a broader exposure to different markets and instruments. - Learning Opportunities: Working in a pod structure under a portfolio manager (PM) can offer concentrated learning experiences in specific strategies. - Flexibility: Some MMFs might offer more flexibility in terms of investment strategies, depending on the autonomy given to individual pods.
Cons: - Performance Pressure: MMFs can have high turnover and performance pressure, especially in lower-tier funds where the competition to attract and retain capital can be intense. - Pod/PM Dependency: Your experience and success can heavily depend on the specific pod or PM you're working with, including their strategy, management style, and performance.
Importance of Fund Tiers:
While the "big four" MMFs might offer higher pay and more prestige, the tier of the fund doesn't necessarily dictate the quality of your professional experience or the stability of your position. Lower-tier MMFs can offer valuable opportunities, especially if they align better with your career goals and work-life balance preferences. The key is to assess the fund's performance, culture, and the specific team you'll be joining.
Stability Considerations:
Given your interest in stability, here are some questions you might consider asking to gauge the longevity and stability of the platform:
Remember, while the tier of the MMF and the specifics of the pod/PM are important, aligning the opportunity with your career objectives, risk tolerance, and personal values is paramount.
Sources: Good questions to better gauge culture and longterm fit of a startup PE fund?, https://www.wallstreetoasis.com/forum/private-equity/becoming-better-at-asking-questions?customgpt=1, Questions for Management, How to identify strong management team?
bump
I personally would be hesitant to go anywhere that’s not Citadel or MLP. Have heard Baly, Brevan, walleye are all having issues. You do not want to join a sinking ship.
Care to expand further? Can also dm if preferred. Did see the BB articles about Brevan cutting 10% and Walleye cutting as well. Figured it’s more or less pod/PM dependent but don’t know a lot about the general culture/environment of these guys
Agree Brevan/Baly/Walleye are all a disaster.. very likely more layoffs to come
What about p72?
Good place to be. More stability than anywhere and good performance.
You do know the turnover rates at MLP, right? This is definitely NOT the place to go if you seek stability.
This isn’t what I was expecting when I read MMF…..
Bro I’m cackling
I know those places on the credit side feel free to PM
Ty - dming you
I would avoid tier 2+ pods. This industry is now more than ever a scale game. Have you been able to get in touch with the tier 1 pods at all?
I've spoken to the BD folks at Citadel/Millenium before (they reached out) but haven't received any looks from any of the pods. My sense is I could move from a Tier 2/3 to a larger platform, especially at the analyst level if I have to.
PM matters way more than the fund. Even if the fund blows up, if the PM is good you will be able to follow him to the next place.
By the way Hudson Bay has been growing nicely for several years, definitely not a sinking ship.
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