Big difference between paper book performance and real PnL at MM
The original question has been already answered. Thanks to all who provided meaningful feedback.
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It sounds like the issue is basically about sizing of the positions, where he goes a lot smaller than you do on your paper book. You probably need to work on communication: laying out each pitch in a way that is compelling to your PM, and pounding the table "we need to be bigger in this name" when appropriate.
"My paper P&L is doing better than your real P&L" is a losing argument that will make your PM hate you.. Paper always looks better than real $, and PMs hate to be told "I'm better at this than you" by a team member.
It's super important for analysts to understand that doing good analytical work is half the job.. the other half is persuading your PM to put on the positions, and you need to develop a sense of what appeals to him and how to structure your pitches to fit his style/biases.
Answered.
If this has been going on for a while, it is perplexing how he's not trusting you more. As a Pm, there's nothing I like more than an analyst I can trust who is a reliable moneymaker, even in areas I dont have expertise in. Some hesitancy in the beginning is understandable, but after the analyst has sort of proved himself, I would definitely give him more rope, deploy more capital, and ask less questions. It all just makes life easier for everyone.
I think this is a valid enough reason to look at other options. This is a stressful, demanding job and if you perceive that you’re not being adequately compensated for your efforts...look for a new job.
Of course, try your pounding the table strategy this year but if you’re not seeing a difference, why stick around?
I generally do not want to leave the firm as it is a great platform, and I have built fairly good goodwill with other people at the firm. Would you advise I first try to bring this up with him? What would be the best way to frame this? Or just be fairly straightforward? How should I approach this without damaging the relationship? But this issue is bothering me enough now as I am nearly in my 3rd year at the firm and am still suffering from the same issue (PM doesn't want to do much in my sector). Maybe I can recommend I look at more of the names he is familiar with?
This is silly. If you've really been doing this for 3 years with coverage, go get a carve out or your own book somewhere else. He probably doesn't think you are nearly as good as you do, and even if he does, if the book is overall doing well he may not be incentivized to rock the boat because he's happy with how he's doing.
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