analysts vs traders in junior HF roles?

Hi. I am a junior at a top-target, majoring in computer science. I'm also a new student of the HF industry. I genuinely enjoy developing my own ideas and see it actually work in the real world, so the job seems to be a good fit for me.

So I understand that the top 20 funds can be categorized into one of the three mainstreams: Fundamentals(equity long short, distressed, merger arb), Global macro, and Quant. I doubt I can jump into the fundamental funds without prior banking experience (assuming banking internships don't count), so I have my sights set on quant funds where I can play to my strength in computer science.

My understanding is that just as sell-side positions break down to IB / S&T, Hedge fund front-office roles generally break down to analysts / traders (forgetting about the research people for now). The analysts make models, generate ideas, pitch them to the PM, whereas the traders are the executors who spend more time dealing with the market. Please correct me if I'm wrong.

So here comes my question:
I see a very thin line between these two roles. It's not as if the traders don't generate their own investment ideas, or the analysts delegate all trading activities to traders. Could someone describe specifically how junior positions are different from one another? Also, which career would give you better chances of being promoted into a PM?

Thanks for taking time to read a long post.

 
Best Response

a) Forget about top 20, that's arbitrary and probably not a good way to end up in the best spot for you, not to mention seriously limiting your total opportunity set (I would estimate that the top 20 hedge fund by AUM employ trading screw-up, whereas shitty research is typically easier to nip in the bud without serious issue.

At my particular firm, every analyst is responsible for their own names (more junior people have a mentor or two who has shadow-coverage at first). However many shops have more formal junior/senior analyst system (sometimes they may use banking-style titles for this). The amount of freedom to generate new ideas, do your own research, and control the process varies a lot by firm, PM, etc.

The same applies to the PM question, though in my opinion the pendulum has been swinging away from traders for a while now (and going to more so as banks decrease their prop trading). At my particular shop every PM was an analyst at some point, and most of the new fund-launches I can think of are analyst-driven, but obviously there is no shortage of famous funds started by traders.

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