Carve at MM or X-over fund

Hey monkeys

Background: I'm a TMT analyst currently at a $2.5B fund (joined out of college). 6.5 yrs buyside experience. Started recruiting after another disappointing comp year and debating between 2 offers.

The first is to run a carve of $300M at a MM (citadel, p72, mill) that would scale over time. PM was promoted internally. The second offer is at a crossover fund with $3B in AUM and I'd spend my time 50 public/50 private.

I think the crossover fund is a more interesting role since I'll add private investing to my skillset, I think it has more stability (although who knows), and better culture. However the offer is $4-500k all in which is basically what I make now.

The MM is obviously less stable and there's a high chance I'm recruiting in 2 years. But they are guaranteeing $900k all-in for this year with upside.

I know the forum is pretty biased against MMs in general, but how would you rank these opps (or would you stay put)?

Comments (31)

Jan 24, 2022 - 2:30pm
gameplotkin, what's your opinion? Comment below:

Take the guaranteed money at the MM. Clearly you're decent if that's what they're offering. Stability at these single managers are overrated - I know several people that were fired or got shitty bonuses last year

  • Analyst 2 in HF - EquityHedge
Jan 24, 2022 - 3:32pm

I personally would take the MM and it's not even close. Good luck 

  • Prospect in HF - EquityHedge
Jan 24, 2022 - 3:53pm

Not sure this forum is biased against MMs...seems like 90% of the threads are about the Big 3 / 4.

Anyways, if money is the issue here, why not go for the job offering >= 2x the other job? How much more interesting do you think private investing will be? $500k more interesting?

  • Investment Analyst in HF - EquityHedge
Jan 24, 2022 - 4:04pm

How do MMs offer guarantees to analysts? Izzy reaching into his pockets to pay $900k if pod goes bust before 12 months is up?

I think it all depends on how good the pod PM is and to what extent you can ascertain that by your own checks. I've seen a lot of new internal promotes not survive jump to PM in their first year so buyer beware.

Jan 24, 2022 - 8:28pm
Undercover meme, what's your opinion? Comment below:

Love me some pass throughs 

"one for the money two for the better green 3 4-methylenedioxymethamphetamine" - M.F. Doom

  • Associate 2 in PE - LBOs
Jan 25, 2022 - 6:50am

More important is comp trajectory over time

wasnt there a thread showing comp trajectory at these places stepping up to $10M+ by 30 with less risk than MM?

Jan 25, 2022 - 1:54pm
trilluminate, what's your opinion? Comment below:

Youre probably thinking about the dragoneer/altimeter thread? Both of those are 20 bn plus funds. The op here is talking about a 3 bn dollar fund. Assuming 15 percent avg returns with a 15 percent incentive fee you'd need to have 15 percent of the carry pool to hit 10 million....and i doubt the founder is giving up that much of carry for a new hire at an established fund

  • Assistant PM in HF - Other
Jan 25, 2022 - 4:36pm

What are the terms of the carve?

Most Helpful
  • Investment Analyst in HF - Event
Jan 25, 2022 - 11:52pm

I think you have the optionality point backwards. If MM is offering a carve, that is the operative decision point in this comparison. This is your shot to build a track record and get on a PM track. You are still younger in your career, so you'll be fine in 2 years if you shoot and miss. I think if you're getting crossover offers now you will get them again in 2 years. "Private investing" is not some mythical or differentiated skillset, don't get carried away from all the marketing bs - if you can analyze and value a business, you already have it. This is obviously different with operationally driven control buyouts, but that's not what we're talking about here.
Portfolio management, on the other hand, is a real and distinct skill set. It will be harder to get that shot at running a book 2 years from now if you take the crossover and just be another analyst. 
The money difference here, which is no doubt significant, is just icing on the cake. In my view you are thinking about the optionality point backwards. 

  • Analyst 3+ in HF - EquityHedge
Jan 26, 2022 - 2:55am

Thanks for the insights. I see what you're saying, but my view is somewhat different (and might be biased by the people I've talked to)

At the crossover fund I would get private/deal experience for the first time since I didn't do banking. I agree that it's not all that difficult, but it formally adds it to the resume. If things don't work out, I THINK the pod shops would still hire me (because they're always hiring) due to my public experience + I can go to other growth equity firms

At the MM, there's a chance I perform well and get paid - great. However, the majority of people (who I'm sure are all just as competent/qualified) end up getting fired, hop around to different pods since the skillset is so specialized around trading quarters, before ending up in corp dev. A few make it to PM but most don't.

The $ is what has me interested so I'm still leaning towards it but maybe I'm misreading the opportunity.

Jan 26, 2022 - 1:29pm
nanner16, what's your opinion? Comment below:

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  • Analyst 3+ in HF - EquityHedge
Jan 27, 2022 - 3:08am

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