Given the short-term/quarterly focus, tight drawdown limits and lack of interaction outside of your team, people tend to describe their experience at MM’s as highly stressful and unfulfilling (particularly if you have a fundamentally different investment philosophy). I understand that the experience is ultimately a function of your team and each team is different. But, I’m still yet to hear of anyone detailing their time at a top MM as a positive experience. My sample size is quite small so I was wondering if anyone could share what their experience has been like - especially interested if anyone has spent several years/built a career at a MM platform.
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You get to play an arcade game for a living and if you do well make a ton of money. Many people enjoy it obviously.
I understand all the negative perception: it can be high stress, lead to getting fired and having to leave the industry, and generally requires being wired in a different way with regard to time horizon, tolerance for losses, risk mgmt etc.
But the rewards can be exhilarating. It's as "eat what you kill" as it gets. Zero politics, zero BS, you don't even need to spend a minute on admin, back-office or obviously fundraising.. and still your fund hands you up to $billions to manage and focus on what you love, investing. I have zero stress about the "conversation" with my boss at year end about bonus (it's a % of p&l). If my overall fund is not doing well or losing assets yet my team is performing, I dont even worry that much, because my good track record will make me extremely marketable. There's very few set-ups that provide you with such a degree of ownership and independence. It makes the MM model extraordinarily motivating, you really feel like you are running your own business.
MMs are not for everyone. But then neither is PE (a lot more process) or traditional asset management (working at a LO would feel to me like working at the post office... steady paycheck and career, but zero excitement). They all have their pros and cons. But yes, there's a contingent of us that loves it at a MM.
As a PM, I see little room for politics. I try to be likeable with my boss "just in case", but if I hit my stop-loss, there's a 99% chance he boots me even if he likes me- Have seen it happen with several other PMs whom I know he liked personally.
At the analyst level, comp is generally not formulaic and there is more room for ambiguity or unfairness. But as a MM PM that is constantly stressed and under pressure to perform, I can't afford to keep on an incompetent analyst just because he is funny/nice. I will take the proven moneymaker (and pay him very competitively) every single time, even if he's dry and distant. If the analyst is genuinely that good, I will try to retain him every way possible. I just don't see much room for BS nor politics. There might be the ocassional case where a PM that's in the danger zone might throw his Sr. Analyst under the bus so he can get a 2nd chance from management. But the PM will still own the drawdown.. the buck almost always stops with the PM, so it'd be stupid to let go the moneymaker analyst and keep the sociable-but-mediocre one.
I don't doubt there are unfair cases out there. But analysts often suffer from "selective memory".. in their mind the PM has passed on all their brilliant ideas that worked, but they choose to ignore the bad ideas or the errors of omission where the analyst said "pass" and the stock became a home run. It's never easy to be 100% fair in giving credit to an analyst over his performance. Systems like Citadel's alpha capture do help a lot in distinguishing the analyst's skill from the PM's. If you can convince your PM to give you a small trading sleeve, even on a paper basis.. that can go a long way in making it clear whether you're good or not.
MMPM - thanks for your advice. It would still seem that at the analyst level, there is still a lot of politics even within the pod. The PM can tilt the positions of the portfolio in such a way to favor the analysts that he likes and disfavor those that he dislikes more, particularly when everyone's ideas is gen. making money. Which is why it is important to have an objective measure of performance like ranked ideas or paper sleeve like you said or otherwise the PM would have too much power against the analyst that I suppose he can take advantage of in unfair ways if they want to, and the analyst can get screwed if they don't have a paper PNL to back up their "actual" performance. I just think at analyst level you should be rewarded for good calls (and punished for bad ones) but the system should be as objective as possible esp. at results oriented places like MM platforms.
My point is if the whole point of MMs is to identify talented investors/traders they really should make it more objective at the analyst level as well. Would hate to be making good calls that are not implemented by PM due to pod politics.
Why so paranoid- has something happened to you personally? The PM is out to make money, not looking to screw you over. Generate good, relevant ideas consistently. Help frame ideas in the context of the PM's macro view. Use high conviction sparingly and accept that you are never 100% certain.
MMs are as close to meritocracy as you will find in just about any field...
Who hurt you guys? PM here- none of what you describe is an ideal scenario at all. Why would I want to churn a bunch of disgruntled, low-paid analysts with no track record through my team when I could build a working rapport with a few I trust, pay them commensurate with their contributions and provide them potential for growth with meaningful alignment (eventual direct tie to P&L)?
I work in FICC so maybe it's different in my world as we tend to skew a bit older but I can assure you very few PMs are worried about their analysts overshadowing them. Again, you sound very paranoid. Is the world perfect? No... But, I think MMs are far less political than almost all other industries/careers. SMs far more political in my experience (and I've worked at three). Good luck, I'd worry more about improving yourself and less about the boogeyman. That way, if these asshole/moron PMs do exist, you'll be talented enough to quit and find a better situation.
I used to work at a large single manager and moved to a multi-manager about a year ago. Working at an MM has been an incredibly enjoyable experience for me. The Analysts I've encountered know their stocks better than anyone else and the information flow is exceptional. The more time I've spent in an MM the more I've realized that most single managers are nothing more than factor shops (long value /short quality for example). MM's are a great place to learn and the idea that one of these analysts couldn't work at a single manager is absurd.
That said, it's a total grind. Making money is incredibly hard when you have to run everything neutral. The market has a tendency to mean revert in most sectors, which means you constantly need to be turning ideas. Don't underestimate how much of an impact hourly P&L can have on you mentally - it can be tough to have conviction when you get kicked in the face every day for a week (which sounds ridiculous but its the truth)
I got an offer from citadel for a distressed pod and from millennium to work at a merger arb pod. i do not know which one to take since ever since I was 14 I have been doing both distressed investing and merger arbitrage. So can someone tell me if comp is usually higher in merger arb and distressed? Also, which one has more job security?
No you didn't. Please stop.