• Sharebar

This is probably not relevant to most people here, but maybe some of you have been through a similar situation and have some light to shed.

I've been on the buy-side for several years as a macro HF analyst. I work at a top-tier single-manager fund within the space, however our performance has been pretty weak over the past few years. The trades I've originated for the fund have been PNL positive (I keep pretty close track of them, overall I am up solidly with pretty tight drawdowns), but this is vastly outweighed by the senior PM's trading losses. I am losing faith that our returns will turn around anytime soon.

My goal from day one (actually from freshman year of college when I started trading futures PA) has been to become a macro PM. At this point, I have no idea how to get there. I'm not sure if it makes sense to stick it out here for another year, at which point I could probably be granted a small book, but also face declining AUM, rough performance from the PM, business survival risk and declining reputational value. The other option is to try and leave and start fresh at another fund under a manager, but that would mean another ~2yrs of being an analyst before I could (maybe) get a book, if I could even find such an opportunity. I don't want to be a career-analyst. The third option is to just leave the industry entirely and try something totally different. Honestly, I think I could start from day one and generate solid PNL with good risk management; my dream job would be to find a seat with a $25-50mm risk allocation from day one along with fundamental analyst/idea generation duties for the senior guy, but I know those seats don't exist - you need to establish several years of trust before someone will grant you that.

This industry is incredibly frustrating. There are plenty of opportunities to make money in the current environment within macro, but I think many of the fund managers and PM's who control the $ have been conditioned to trade incorrectly by the 2002-2008 run, which is why performance has been so mixed across the space. The challenge for me is finding people to work for that are able to thrive in this environment; the more firms I work at, the more difficult if seems to find truly talented managers. I think I am good at this job and its something I love. I would LOVE nothing more than to eat what I kill, but I'm borderline ready to leave the industry because I don't think I'll be able to find a place where I can make money and build a track record.

Any advice would be helpful, particularly from people who have been in a similar position. I don't think going to a prop shop makes sense as they are too s-t focused (my trade lifecycle is typically 1mo, though I do trade around fundamental themes a lot during this period), but would love to hear any insights about that option or others. I'm sure I'm not alone in this position.

Comments (10)

  • Bondarb's picture

    Put together a resume and a nice pitch as to your investment process and find a headhunter who knows funds like Millennium, drawbridge, and other big multi-manager shops. If you have experience and can actually talk about the trades you claim would have had you up 15% this year then you should have a shot to wrangle a seat, 25MM bucks, and a very tight stop at one of these places. If I was you I would drop the rap about how everyone else is an idiot tho...remember that despite your claimed returns you have zero auditied PnL attributed to you so I wouldnt be so arrogant about how much more talented you are then everyone else you work with.

  • mrmarket's picture

    Thanks, that is very helpful advice. Appreciate the quick reply.

    I don't think I'm better than the guys a generation older than me that are running $, and sorry if my post gives off that impression or an attitude. I just think many of them grew up in a different market environment and many are having a tough time transitioning to the current one, which is definitely trickier and different with global ZIRP etc. If I had grown up in the bull mkt in rates/commods, I'd probably have a similar mindset (and hopefully be rich). It was exactly what was incentivized by the environment for close to 10yrs, and its tricky to change your whole style once you reach a certain age. And yes, I completely understand that running pretend $ is absolutely not the same thing as real $. No attitude, just hungry.

  • West Coast rainmaker's picture

    I don't know much about the global macro space, so take the following with a grain of salt:

    You have a solid trading record on your own. And your fund has a good name ("a top tier single manager fund"). I would be talking to head hunters and your contacts at other firms. As far as answering the "Why are you looking for a new job?" question, you could cite stylistic differences - which would be true.

    If you find a talented manager, I would approach him directly. You have 4 years in global macro - you are valuable at this point. In your job search, I would look at what former employees are doing. Is the fund creating a bunch of new PMs, maybe even seeding them? Or are former analysts just taking the similar jobs elsewhere?

  • In reply to mrmarket
    Bondarb's picture

    mrmarket:
    Thanks, that is very helpful advice. Appreciate the quick reply.

    I don't think I'm better than the guys a generation older than me that are running $, and sorry if my post gives off that impression or an attitude. I just think many of them grew up in a different market environment and many are having a tough time transitioning to the current one, which is definitely trickier and different with global ZIRP etc. If I had grown up in the bull mkt in rates/commods, I'd probably have a similar mindset (and hopefully be rich). It was exactly what was incentivized by the environment for close to 10yrs, and its tricky to change your whole style once you reach a certain age. And yes, I completely understand that running pretend $ is absolutely not the same thing as real $. No attitude, just hungry.

    There are a host of multi-manager platforms hiring right now as I mentioned above plus some others. Find a headhunter if you really think you are ready to run a few bucks on your own with a tight stop.

  • brandon st randy's picture

    Very interesting topic. Thanks for bringing it up.
    I absolutely agree with Bondarb in term of building a case for yourself to present in front of the headhunters.
    To answer your original question, if your fund has been performing miserably for 2+ years, how has that affected the firm's AUM? Are you seeing accelerated redemption requests as investors rush to the exit? If so then sticking around at your current shop may not even be an option and you really have no choice but to start looking elsewhere ASAP.

    I have seen a number of formerly multi-billion HFs liquidating and closing shops, sometimes under the disguise of converting into Family Offices. It is better to look for a job while you still have a good one yourself.

    Too late for second-guessing Too late to go back to sleep.

  • redrut's picture

    If you move on, can you recommend me for your old seat :-D

    1percentblog.com

  • 1337's picture

    If they are underperforming and losing AUM, asking to be promoted would probably be the last thing they want to hear. If you have an offer from another shop, it could light a fire under the decision-making process. Might be that they wouldn't mind promoting you, but they just would be hard pressed to make that decision -- another offer would be a good way to move things forward. If that does not play out and you are a smart guy, eventually you will find another fund that wants to bring you in. Being stuck as an analyst for a couple years is a very real possibility, which is why you do not want to bail on your shop unless you have to. If you have at least some experience running money, it will be easier to do so at another shop, even if you former employer liquidates.

  • ballerballer's picture

    If you wouldn't mind sharing--what route did you take to get your current job, e.g. b.b. research, trading, etc?

  • mrmarket's picture

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  • shark-monkey's picture

    Fear is the greatest motivator. Motivation is what it takes to find profit.