Employee funds

Balyasny does.

MLP and P72 do as well

And what are the requirements? Can any employee invest (even first year analysts)? How do people use it, as a main investment position or rather diversification among other investments? 

Citadel only lets you invest your deferred (and returns it when vested), no ability to put in your own capital. Given how large your deferred ends up as percentage of NW it seems fairly reasonable.

2 things worth considering:

1) Fund likes your show of confidence and buying into the product, but for the small ticket you put in, it's kind of an admin hassle to them that would not be worth it if you were not an employee. So absolutely don't use it as an ATM. You can add to your investment as bonus gets paid each year, but don't clown around redeeming $50k here and there.

2) it's all effectively short-term capital gains for these funds, so every year you will have to write a check to the IRS for 40% of the profits made the year prior, plus state taxes. That's over 50% tax leakage if you live in NYC or Cali. Worth considering what your net of tax returns will be and managing your liquidity so you have the cash to pay those taxes each year.

chimp12335

Hi guys, just curious about whether the large platforms (Citadel, P72, MLP...) let you invest in their funds/have specific employee funds and whether there are any special requirements for it (e.g. minimum seniority) or any other things to know (e.g. employer match, how redemptions work etc) 

Firms that "let" you invest (ie, give you a choice) is unusual. But "require" you to invest is common, especially above a certain income level. Lots of places defer part of your bonus for several years in the firm and you don't get a choice. But if you leave the firm, you typically lose that money. There's also risks of investing money with your employer -- I've seen so many friends with millions of dollars invested in their employer's fund or stock, but then the company suddenly went broke and my friends lost all that savings on the same day that they lost their job (Enron, Amaranth, Lehman Brothers, Bear Stearns, MF Global, too many tech startups to count, etc etc). No matter how awesome your fund's performance is, don't put too many eggs in the same basket as your job's paycheck...

Unless you work at MLP or Citadel

This comment is morbidly inaccurate.

Like the others said, Melvin/Archegos/Pine River are all quintessential single managers with concentrated portfolios and highly volatile return profiles. In a way, opposite of platforms.Citadel and many other platforms were indeed down severely in 2008, but factually MM performance since then were signicantly more stable, predictable, and higher sharpe than the rest of L/S equities industry. This is statistically true and irrefutable.It's foolish of anyone to think anything can be stable or high performing forever, but I think a reasonable and logical observer could conclude that MM structurally has tighter risk management and diversified portfolios with in most cases higher sharpe ratios, especially the Big 4 (with Citadel currently in the lead by far) who have both longer history and scale.

Your argument is too black and white. Citadel was down once in 2008 so therefore it must be just like Melvin or other SMs and can fail any moment is just such one dimensional and shallow thinking that our industry should strive to fight against.

Now going back to the original question, I would love to invest a good chunk of my net worth into any of the big 4 because they have been top quartile investment vehicles by any standard measure of return quality (either IRR or sharpe ratio), especially given its low correlation to vanilla risk assets like equities.