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Do PMs take their teams with them?
 

justanother's picture
(Monkey, 50
 
Points)
 on 7/6/12 at 4:37am

Right, I've been discussing this with a friend and we've had opposing views. However, without much experience on the table I can't say it's one way or the other empirically. Therefore, I thought it's best to ask for more experienced people's opinions.

When PMs move from one fund to another, is it common for them to take their teams with them, or recruit anew? Do they have that kind of freedom or are they bound by what their new fund dictates in terms of recruitment etc. Also, how does their 'budget' work? Is it a fixed amount that they can use to recruit people or will the recruitment costs come out of their pnl?

Obviously the assumption is that they are ok with the existing team to begin with.

I'm curious on people's opinions or experience, I think that this is more of a hit and miss rather than a standard behaviour (whichever way it works).

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Bondarb's picture

Sometimes PMs have teams with

HF
(Neanderthal, 2,282
 
Points)
 on 7/8/12 at 4:05pm

Sometimes PMs have teams with them and sometimes they are stand-alone...there is no rule on this one. In terms of hiring, at large multi-manager funds there is generally some research and staff that are paid for by the firm but if you want to hire someone just for you or your group you need to pay him just like any other expense you incur.

justanother's picture

Thanks for the response.

(Monkey, 50
 
Points)
 on 7/9/12 at 6:53am

Thanks for the response.

Gray Fox's picture

justanother: Right, I've been

HF
 
Points)
 on 7/14/12 at 7:31pm
justanother:

Right, I've been discussing this with a friend and we've had opposing views. However, without much experience on the table I can't say it's one way or the other empirically. Therefore, I thought it's best to ask for more experienced people's opinions.

When PMs move from one fund to another, is it common for them to take their teams with them, or recruit anew? Do they have that kind of freedom or are they bound by what their new fund dictates in terms of recruitment etc. Also, how does their 'budget' work? Is it a fixed amount that they can use to recruit people or will the recruitment costs come out of their pnl?

Obviously the assumption is that they are ok with the existing team to begin with.

I'm curious on people's opinions or experience, I think that this is more of a hit and miss rather than a standard behaviour (whichever way it works).

It depends on the type of firm. Places that have tons of managers have a system where they recruit a PM, the PM gets a contract for x % of his PnL, and then pays his 2-3 analysts he brings over out of it.

frgna's picture

Know of one fund in London

O
 
Points)
 on 7/15/12 at 5:00pm

Know of one fund in London where the PM left to start his own fund and took an analyst with him. Probably differs case by case.

if you like it then you shoulda put a banana on it

Kenny_Powers_CFA's picture

It definitely happens but

HF
(Neanderthal, 2,193
 
Points)
 on 7/15/12 at 10:11pm

It definitely happens but depends on the strategy, team, circumstances, etc. Plus if you're a more senior analyst the math may get tricky-stay on and get your boss's old job or leave with them to a new shop where you may get equity etc.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

BlackHat's picture

When people start new funds

HF
 
Points)
 on 7/15/12 at 10:19pm

When people start new funds they tend to bring people with them, but obviously a PM moving to an existing fund where he's just working as another manager will have to pay his analysts out of pocket [technically] meaning out of his chunk of P&L compensation. Some places will limit how many analysts you can bring with you, others may say you can't bring any and they have analysts you'll have to work with. I'd guess that's not the most effective thing to do but some places are stubborn.

I hate victims who respect their executioners

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