Axed MM analyst - Q&A
Hello hello
Brief story, I had >2yrs of M&A experience before going to a big pod shop and stayed about <2yrs. I was axed along with my PM, now I'm heading to my next role in a few months.
I found this forum's discussions on early career MM path are too tinted with survivorship bias and students / young analysts who have no idea what the MM land is really like / what options you have once you are released on the market again.
Q&A, I try to answer from my personal experience without giving away too much of detail.
Thanks for doing this! Was your PM transparent with you about pnl to let you know things may end badly or did it come as a surprise? How long did it take to find a new seat and how did you balance the desire to end up in a good seat with a tenured PM with the need to simply find a job. Trying to understand if it’s better to wait for the right role in a situation like this or just jump on the first reasonable opportunity.
Another high value question
Yes PM was very open about it, treated me like a partner, I saw p&l every day
I still don't blame him. It was just tough for him too. And I knew what I was getting myself into.
I'm now heading to a top LO (with LO and LS funds), took me 4 months because the interviews were long and difficult (more difficult than pods)
I had lots of interviews/choices to work at other platforms, sell-side research but during my search I wanted to try being an investor (ok I know I might hate it one day) with longer investing horizon, I don't chase for job security but this job might provide me with a good learning ground - as I had good training in IB, MM, now I would like a place with top notch resources for me to stably learn and build without exhausting me everyday
thanks for doing this. in your recruiting for more fundamental/long-term roles, was it an uphill battle to have come from a pod and to have been trained under a different game? e.g. i heard certain LOs / fundamental investors will automatically throw a pod analyst's resume in the trash - not sure how pervasive that view is
What kind of interviews are they, considering you got laid off?
Thank you for your time and appericate the insight ! Could you please provide a brief overview of your academic background? Does not having a STEM background pose a challenge when transitioning into middle-market (MM) investment banking? Also, as an Analyst 1 (AN1) in IB, what was your networking approach to building relationships before making the transition?
Did the firm have you meet with other pods in order to keep you there? Most MM shops will try to keep the juniors even when PM gets fired.
This is a case by case question
in general they will do that but this might not be that good of a path
my case:
no other pods in my sector within the firm had capacity around the same time, no plan for new incoming PM, so was axed
other cases I have seen:
- lucky, re-podded and stayed for a long time in the next pod (rare but happens)
- lucky, re-podded and switched sector (that means you are not even that good at your own sector and you don't have the love for it...ok)
- lucky, re-podded but didn't like the new team and eventually left (often)
- lucky, re-podded but new PM joining in like half year away, wasting time waiting
- lucky, re-podded, new PM fired again, re-podded, new PM fired again, re-podded, new PM fired again....
pick your game...
What are some mid/low tier hedge fund outcomes that you've seen?
no name funds
not necessarily bad though, these places are just not household names / have less institutional resources
but senior guys can go to these places to do more interesting things with better lifestyle
As a junior I think going to these places will just be harder to build your name in the game and less access to companies / networks etc.
What’s the time horizon between jobs? Is 8-10 months fairly common?
Obvious follow up q from me is for you to expand on what you mean by people's survivorship bias towards MM funds and what you think more realistic outcomes are (let's say 25th, 50th, and 75th percentiles)
Do you think you would have been better off doing a few more years of IBD before making the switch? Do you think ER would have been better prep specifically for the MM model?
no, i hated ib late nights..more years in ib would be helpful for those pe style hfs but also need to add pe experience on the resume
and yes, ER is great for MM model (similar approach, quarterlys, knowledge of the markets), I see half half from my floor ib vs er
IB kids are just trained to work hard and are used to long hours already and have good understanding of corperate finance
Did you move to another pod shop? If so, how was the recruiting process different after you were axed vs when initially breaking into the buyside? Did you have to explain or do they understand this as an industry norm? In other words, how challenging was finding another role?
Going to answer your question first, high value question
Look I think I was unlucky and lucky at the same time, I was axed from the job but I built a reputation during my tenure in my industry (not bragging, I realized this during my job search)
I'm in a non tech/consumer sector and people literally knows each other (sell/buy-side, some managements etc.), unlucky as less jobs available on the market because it was a tough year for my sector, lucky as so so so many people were willing to help me during my search
I saw a difference between people who were axed around the same time, some land interviews easier know where new jobs are opening up, some struggle a bit still applying online or going through HHs
So to answer you question, the process was very different. I interviewed through headhunters and BDs when I went from IB to buy-side
This time, I had so many interviews from PM (SM, L/S) and sell-side heads at banks who I met before / heard of my name and the news that I was axed
The process was more of less "easier" as I can skip the hr part and straight to vibe check with them
I did interview with a few opportunities from HHs which were not something I was most interested in and my offers were from my networks
Thanks, very insightful. While we're on the topic, how do you think this would have played out differently had you not built that reputation?
Any regrets going into public markets? What did you wish you knew earlier / what advice would you give someone in college who's looking to potentially make the leap?
is coding/python a necessity in equities (at a pod) (at analyst/PM level). Or, rather, will it be seen more as a requirement at least at it relates to the medium term horizon
What could you have done better? Was there any foreseeable way you could've insulated yourself or was this purely a forcing function of your PM fucking up and you getting caught in the crossfire?
.
P72 or Cit?
Feel free to pm but not saying here
He’s neither
He’s neither
He’s neither
He’s neither
He’s neither
What you are looking for might be answered in one of the above
What do you think of starting off in a top ER bank under a non II ranked analyst (MS/JP/BofA) vs M&A at a mid tier bank (Citi, Barclays, UBS) for MM HF exits?
With what you've seen regarding MMHFs as an early career path, how would you guide undergrads between something like P72/Citadel and top banking/pe analyst programs?
Valuable question.
Please note that I'm in equity L/S, can't speak for other strategies (arbs, macro, etc. etc.)
Personally I think that IB (or even ER and PE but I never worked those jobs) is an excellent way to start, it is a great way to build a view of the value chain of capital markets, and a few years of testing your limits - quickly gaining/practicing many skills needed to succeed in MM style (i.e. gathering information in a timely fashion, high quality work standard, modelling skills, basic knowledge of industry landscape, etc.), and in these traditional jobs you are supported by the team too, there are associates and VPs/MDs who can be your mentors (and trains your tenacity...) - which is a very different setting than being an one person army working for a PM (normally there other analysts on the team, but your output to the PM requires high independency which is unlikely high quality as a new grad)
So, very personal opinion, I vote for a few years of sell-side job before MM
Piggybacking off that previous question, if you got into P72 Academy or CAP, rather than directly to a pod, do you still recommend the years in banking before MMHF?
Is ER or IB a better first job to land in an MM? This question is from a pure recruiting perspective and preparedness perspective.
Would I be able to go from top bb banking in a mid group to pod easily or is that a difficult transition? Like I understand these pods have high churn, but it is almost impossible to get into the summer analyst stuff at p72 or citadel. Does it get easier as an aalyst?
Pods do not care much about pedigree. Have seen numerous people from MM banks etc. not to say specific PMs won’t have preferences
How do I recruit in then? Like what do they look for? Also will the work experience there be credited in any capacity in ib. Like could I go from associate 1 to hf analyst for 5 years back to sellside vp? Were your offers like that in terms of seniority?
Gonna be brutally honest I don’t think you’re going to do well in MMHF land
What was your pay for each of the 2 years? Looking back was it worth it vs. continuing in M&A or going to PE?
Quick question, as a current BB IB analyst who is going to one of the UMM PE shops but wants to transition to MM HFs after some time there, do you believe that there is a way to feel out which pod groups are good to join and high performing / is it possible to be "picky" about recruiting into particular pods? Also, from your experience, does the size of a pod's carve have any correlation with their blow up rates (e.g. $2-3bn pods blow up less than a $1bn pod)? Thank you!
What was your PM’s performance and over what time period to warrant the axe? How diversified was the book (rough number of names?). Thanks for great replies and thread by the way.
Sorry don't want to say too much on both
But what I can point to the first question is that PMs might be fired for all kinds of reasons
Just like there is no cookie cutter careers/PM styles, the way platforms manage them may not be exactly the same on each person (correct me if I'm wrong, maybe I don't have the full picture)
Appreciate it might be too identifying but how exactly did you have a good reputation if you were not a PM?
Is this more you just asking a million questions to management or attending events?
As even if you're in some small/niche area like say Metals/Mining - I doubt people would be like "wow, this fund was doing 5%, and heard analyst was axed - let's hire him/her".
I can only guess because I was nice to people, kind of socially acceptable and did not ask too many dumb questions in front of many (I know I still do that lol)
Ah got it - thanks!
Thanks for doing this! Very interested, how were the LO interviews harder than pods? I thought it was the opposite.
MMs test speed of comprehension and accuracy/decision making under pressure, which from my own personal view I’ve always been comfortable with.
Long term funds test true depth of knowledge and more thinking, which I still lack.
If that makes sense.
I never thought about it like that. Could I PM you about what your process was like recruiting/interviewing for a MM?
Thx for the q+a. Is there anything you would recommend to make the most of my IB analyst years if aiming for a MM seat?
Take every opportunity to learn, don’t be afraid of taking dirty work from people who actually teach you things, once you identify these people, work hard for them and you will get paid.
What do you think of Point72 Academy or one of the other large fund grad schemes?
Do you wish you had gone to a PE-style in pub mkts type of role? I left IB for one, but have been somewhat regretted not going to a pod given the lack of ownership and multiple deal style environment thats still very similar to IB
Might be late but I am a student who has been talking to a hedge fund and though its just the early talks, they seem pretty keen on me learning more, and so evaluating, would it be smart to go to this “tactile” (seen this word been used a lot for this type of fund) HF out of college or anything similar (long/short with 15-30 months horizon, 1B-5B AUM) or go to IB and get out after 1-2 years?
Like do the options make it worth it to re-recruit for a better HF? this seems like a great option imo as everybody says the top HFs like 10B+ are very hard out of IB, usually PE, or they are pod shops and anything below that runs the risk of blowing up, but the team at this HF and its economics seem great (I’ve talked with similar HFs)
but I am inexperienced ofc and I feel like as someone who is a junior and recently interviewed across many places and started off in IB, whats ur opinio
Why are u asking strangers on the internet bro none of us can make that choice for u. Ask a friend that knows u well that’s been in the same position before or make the decision yourself. We don’t know what you’re trying to optimize for and it seems that maybe u don’t know.
I don’t have any friends or no anybody in real life thats been in the same position, that’s the point of asking in a public forum where people have had these experiences.
I also mentioned I was optimizing for compensation (mentioned fund economics) and risk along with team/culture being important values.
Bump.
Can you talk a bit more about how you think about constructing/managing the short book? Do you use broad indices and avoid single name risk, or is that handled by the centerbook/backbook? Or do you bias towards the long side for most of your aalpha?
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