Analyst PM?
Joining C/M grad scheme this year and have worked with different PMs across 2 MMs throughout school, doing a formal SA at a fund and then part-time at another.
I've worked for a PM who ran c.$2bn gross and had 3-4 analysts below them and they were pretty open with me that they trusted their analysts' views and would ask some let them pitch ideas during a weekly 1:1 with some pushback, but was very reliant on the analysts to know the ins and outs of the names and the drivers.
Another PM I worked for during school ran a book under $750m and basically covered the stocks and idea generation themselves, they didn't hire any analysts or delegate tasks. They literally hired me part-time because they wanted a model monkey who could build out tools and give them info. "Book report" type vibes rather than actual ideas.
My question is, do you think running a book like the latter PM is sustainable? What's the max book size it would still work at? Any general thoughts on the pros of keeping book size small, particularly if you don't think you could train up juniors etc?
If the sector / strategy you're working on as a PM has high enough capacity I see no reason why you wouldn't be able to scale. Even if you cover 10-20 names if liquidity is deep enough why not? Obviously lends itself better to some trades than others though.
WRT keeping book size small, other comments have touched on this point to much greater detail, but the core idea is every strategy has a max capacity at which point your Sharpe will decay noticeably. If you have a 5 Sharpe strategy at 100M, you could hypothetically scale it up to 2.5 Sharpe at 500M, and that might work. The problem is the point where Sharpe decay really begins to kick in oftentimes overlaps with your strategy's max capacity. There's no point getting outsized returns for a few quarters if your competitors catch on and your alpha goes away.
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