Best Multi Manager?
For a junior analyst, what is the best overall multi-manager hedge fund to work for out of the big 4 (Citadel, Millennium, Point72, Balyasny)? Considering things like culture, compensation, stability etc.
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Citadel, specifically Surveyor.
any reason why?
massive concentration of PM and Analyst talent
All the same (at least for L/S Equity) essentially. what matters more is the PM you learn under/ the process.
Point72 winternship
For compensation (speaking for early careers) : 1. Citadel 2. Balyasny/Point72 3. Millennium
For culture : 1. Balyasny 2. Point72 3. Citadel 4. Millennium
For stability : 1. Point72 2. Balyasny 3. Citadel 4. Millennium
Overall Citadel is the best place to go because it has the strongest brand name, best comp and you will learn a lot of course.
Balyasny and Point72 are very similar comp wise and culture wise. Both are known to be more comprehensive and collaborative. A lot less cutthroat than Millennium and Citadel.
Millennium is more like a factory. Many more employees, pay are below the 3 other firms and very cutthroat.
Training wise I think they are more or less the same although Point72 seems a bit above with its academy and teachers. Honestly I don’t think there is much difference here. Those firms are paying you a lot (interns and grads are paid annual low-mid 6 figures) so be confident the training will be there.
Isn’t comp determined by pnl
There’s usually a limit to how much contribution/comp a pm will actually give an analyst early on though
Yes but base and bonus especially at the beginning of career is kind of fixed. There’s a guaranteed bonus that varies between firms
This is just wrong.
I’m working in one of these …
This is very wrong. This person either works for quant side / back office for one of the mms or just is guessing so has no idea how it works within investment teams.
Echo what EinnUlfr and the others have said, all that matters is your PM then the sector.
Of course between those 4 big brands the main factor is the PM. But OP didn’t ask about the main factor to choose a job within one of these firms. OP asked on average how each firm would rank among each other for specific parameters such as comp or stability
This is off by miles for equities on the investment side. Knowing first hand.
I’m on a semi systematic investment team at one of those. Maybe things differ a bit when it comes to the more fundamental investing teams that people from IB would go in
Sorry but citadel isn’t cut throat. In fact I’d say they are the most flexible. Drawdown at millenium and your book is cut in half. There’s a reason why Citadel runs the largest books.
Ultimately what I will say is that the firm matters much less than the team and PM. What is there approach to investing, sizing, tolerance for defending things that aren’t working, average holding period, are they just flipping the book every month… all those things are much more important than the firm.
Doesn't relly matter imo
Just find a good pm
For MMs, the only thing that you should be thinking of is (i) who my PM is and how good is their track record (ii) do I want to be covering this sector for a long time
Your PM will dictate everything, from pay to culture. Everything else is marginal and does not matter. Saying you work at Citadel / MLP means next to nothing within MMs
yes there are meaningful differences as you get more senior (ie who has stricter limits, etc) but thats not relevant to you now.
Agree but there a certain tendance for example concerning Millennium being more cutthroat and less generous comp wise. It will depend on the PM but MLP’s desk are more under pressure generally speaking
not true. Recently MLP has been handing out crazy offers that blow most of the other mms out of the water. On the point re being more cutthroat, all of the mms are exactly the same. Hit your drawdowns and you are out. MLP has a more relaxed risk model than Citadel (similar drawdown limits but lower netting, and higher factor exposure so more flexibility)
millennium is known to be way looser in terms of how you run your book vs. citadel, maybe thats where the disconnect is
in terms of numerical drawdown limits theyre all very similar to each other/subject to individual PM negotiations
but overall citadel is much more restricted in what you can and cannot do
in terms of pm flexibility i would rank millennium > p72=baly > citadel
none of this relay matters for you as an analyst
Correct, not sure how “cutthroat” and “drawdown” became the same concept. MLP is very straight up with their culture they leave you alone as long as you perform. I would say out of the four they are the most hands off.
That said yes if you do not perform they have a very strict risk model.
MLP also underpays in general but you get the easiest upside, no retentions and so on. As someone said they are paying high guarantees but that is to lure talent from elsewhere not everyone.
Previous post wasn’t clear - millenium cuts ur capital very quickly. So yes citadel model is more restrictive on factors, but they are aren’t cutting ur capital in half if ur down 2-3%
MLP underpays? how?
Any thoughts on the training? In some former threads, people say that the P72 Academy is arguably the best because they invested a lot in it, and others criticising MLP cause they outsource it to UBS.
Is there really that much of a difference? What about Citadel or the other MM's training programs? Happy to hear what the working professionals think as I received an SA offer for the Academy but think it may be overrated (not trying to sound like an ungrateful ass, don't get me wrong Im v happy) and the former interns that went through the program said they didn't learn much? Is it due to the true learning taking place during the FT Academy and the SA is more of simply gauging suitability?
it definitely is. Academy interns arent trained much because P72 doesnt give their proprietary data/edge training to interns. Summer academy is about judging if the intern is a good fit for the indistry
Makes sense. Slightly digressing, but how would one even know if one is suited for the industry? I know it revolves around the deliverables and the key stock pitches during the SA, but without access to P72's edge in data/proprietary teachings, what difference is the internship from a stock pitch competition (aside from the pay and nice office?)?
I know I'm oversimplifying things, but am guessing that conversion is largely going to be determined based on depth of research, differentiation of views, substantiation of said views, willingness to learn etc. but truthfully it seems like a black box relative to how IB conversions work. Work hard, do quality work with little mistakes, get along well with the team (heard some seniors saying HFs in general don't care about your attitude/personality, just whether you are good), some luck with headcount, and basically an offer will be extended.
(Long post: I have xp across a handful of MMs through informal + formal internships and recruited across different undergraduate pipelines so I’ll give a really granular answer)
1) training differs significantly across the MMs. Most juniors are hired through SS IB/ER which is why the conversation on junior talent is focussed on the analyst/associate experience and *not* the grad training programs. I have experience recruiting with 2 of them and have a decent idea of the Street’s perception on each.
P72 has the best program, certainly the longest running. They’re always looking at ways of adapting the academy and creating new versions to secure talent from different backgrounds (winternship, experienced academy etc).
The training is *very* specific and even gets niche. It’s throws what would historically take years of experience to learn by osmosis into 10 months of training. It fits in the standard IB/ER work of learning corporate finance and modelling but then will extend it to the niche aspects that can take a bit longer to learn on the sellside (revenue builds, margin bridges etc).
You’ll do a lot of work around industry pitches and stock pitches to get the reps in. Buyside and sellside ER have many similarities but the differences in approaches are significant enough that the academy provides a lot more relevant experience and education than a sellside ER stint will (which makes sense).
I don’t actually think the Academy is the perfect solution for everyone that wants to work at an MM. Working in sellside research for a few years and working on your own to develop the buyside acumen (trade journal, stock pitch, Brett Craughin & other fintwit etc) under a strong analyst can actually set you up for better odds in the long run. Many PMs prefer the standard sell side background as it’s what they did; for some sectors it might even be beneficial.
they don’t teach much in the internship, they just sorta throw you in the deep end and see you how you do. The SA is not indicative of the academy itself. The academy is very rigorous and will be similar to IB hours with the added issue of needing to actually use your brain and needing to prove yourself to the coaches to secure a full time seat. Attrition in some classes has been high(ish) and I’ve met a few academy grads that have outright stated it was one of the most hellish years of their life. But the education is great.
P72 also ensure you get placed into a pod (sometimes you rotate on multiple when you finish the academy) and they have multiple analyst support/feedback systems to help you continue developing and work on idea velocity. They’re also quite keen to rehouse talent and keep strong junior talent relative to other MMs (less likely to fire you early, even for PMs).
The trade off is that only 1 academy graduate in the last 10 years has become a PM and p72 is generally slower to give you a shot at running a book relative to MLP/Citadel
Citadel global equities: similar training to p72 (poached a coach etc) so many of the points mirrored but the program is less core to the firm (they sometimes don’t even run it internationally). They also don’t seem to be as committed as p72 are to placing/retaining talent (Ik a few strong performers that finished CAP but there weren’t any pods hiring so had to leave)
MLP: By far the easiest buyside recruiting process I’ve been involved in, basic IB technicals, generic stock pitch w no real edge etc. A year of UBS research sounds great but honestly 1 year of sellside ER isn’t going to prepare you for the hunger games that is MLP lol. You then rotate with PMs till one hires you or you’re gone. It’s not bad per say, if your an n=1 candidate and can get by working at an MM quickly then it’s a great way to just get to MLP quickly but definitely not for most people.
Bless you, thanks a lot for the detailed write-up. Kudos to you for going through all those processes and hope you got a good offer at a good shop you like. Appreciate the insights greatly, will just do my best for the SA (heard conversion has been lowkey a shitshow) and see what the future holds.
The FT Academy definitely is no mean feat, and I do worry a bit for my friend who's going over. IB hours + HF learning intensity/intellectual rigour sounds absolutely bonkers, given how my IB experience truly felt like monkey work a lot of times (was off-cycle so it wasn't as crazy as summer-only, but had interns who could do the work even when drunk lol) but the physical drain itself was horrendous enough.
The P72 Academy to PM stat ("only 1 in the past 10 years") seemed so unbelievable, but I went to take a look at it myself, and on LinkedIn I can't really find someone who went through Academy and stayed to PM. Even though Academy started in 2015, 1 PM is really low. Perhaps the senior analysts are given a bigger sleeve? But these concerns are definitely too far away for me to worry about now HAHA.
The point of starting in sell-side ER does make sense, for you do build good relationships with the firms themselves and the in-depthness of their research efforts really provides one with a lot of data (and edge?) to work with. Relatively speaking, banking definitely wouldn't be a really good pipeline on it's own due to how different it is, but the options they open up tend to be the attractive aspect. Esp. if one washes out from an MMHF, they likely would be bouncing around pods, no?
Thanks again for your insights, wish you all the best ahead!
who told you that you rotate with PMs lol? Did you end up getting the MLP offer?
For analysts in terms of longevity I would say from just being in the industry for a while its P72>Baly>C>MLP. Pay depends on PM. P72 best for analyst experience/longevity but progression to PM is slower than others. Feels like every MLP analyst tenure i see is 1.5-2 years
Yeah the above point on longevity is probably correct (although Surveyor / Ashler…NOT GE…have proved to be v solid from longevity standpoint), but I think most folks will agree (in other words if u get offers from each of the big4, yes it depends on the PM more than anything, but more often than not, based on comp / culture / progression / general “opportunity”), it’s C > M > P/B. I think this is generally consensus. And exact same for LPs / who folks allocate to
Good post - do you think the order/ ranking will or can significantly change in the next 5-10 yrs? Or is C/M structurally just better than the rest
What is average total comp (base+bonus) for a pod shop analyst with 5-7 years experience? Positive P&L contributor
Also curious. From what I gather HSD% of P&L on a formulaic payout or other comp package triangulating at $200K Base + $500k bonus +/- $200k in an “normal” year (i.e. Pod hits targeted historical return).
Think about it this way. Say you are joining a $1B book and get a $300M carve. 2% return on your $300M is $6M P&L and $1.2M Bonus Pool = $500k/$700k split with you and your PM.
Question in general—is a carve on top of the total GMV of the book or within it? For example avg l/s book at Citadel is like high 1 billions give or take, if there are two analysts running $400mm carves does that just mean the PM is solely responsible for the leftover like 900mm or so (while obviously looking over the analyst managing the carve) or does the PMs own book have 1.8bn on top of these carveouts?
have a friend with following math: 600M sleeve * 5% on gmv * 7.5% take = $2.25M bonus
In the conversation, we've talked a lot about the 4 major MMHFs. I'm curious to understand consensus on the other non-MM funds with discretionary businesses too. e.g. Desco, Two Sigma, AQR, Bridgewater, etc. How would people go about ranking these firms, considering they are not pod-dependent?
Is there any reason Marshall Wace isn't considered Big 4? They have pods and manage $60B+, much more than P72 or Baly
I don’t think Marshall Wace is platform structure. They are more like desco
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