I was told the turnover for PMs at Millennium is like 80% within 2 years of their start date, which seems extremely high, any idea why it’s so high? Are they bad at judging talent? Do they just blend a bunch of individuals together who aren’t compatible teammates? Are their systems/tech just not great so strategies that are otherwise successful just not a good fit? Are people voluntarily quitting or is it more firings from bad performance? Thanks!!
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It's just math. They basically look at humans like stocks, and run an incredibly tight trailing stop loss on your returns. If you don't ever lose money They seem to make the most minimal investment into their talent, but their tech is great--it's exactly what lets them figure out who to fire on such short notice.
No they are fine at identifying talent - the reason it's high is because majority of PMs suck at managing capital
Yea but isn’t that the talent part that they should be looking for? Like isn’t their recruiting team’s job to figure out who’s talented at managing capital?
If they hire a bunch of people who are terrible capital managers doesn’t that make them bad at identifying talent?
The whole reason the model works is because the best PMs get the most money to manage. Portfolio math makes it cheap to give a new PM a small portion of the total risk budget to see if they can perform. If they perform you increase, otherwise you cut.
So if measuring in people, sure the churn is high, if measuring in asset-weighted people, it is a lot less.
Very well said in some macro products they got 5-8 pods trading the same stuff. While they are always looking for a big gun to run a super-pod.
It's high, but there's no way it's 80%
turnover is fairly high. if you look at Linkedin Insights (avail through premium subscription), median tenure is sub 2 years at most multi managers. median tenure at p72 and bam is 1.8. median tenure at mlp is 2.3 years. citadel is 3.0.
Not sure why I got MS...I quantified the answer to the question. There's high turnover at all the MMs and career there is short if you're an investment professional (in general). Finger in the air guess is that 50% of people that join MMs from day one are gone from the industry by the 5 year mark.
So they back people who have no prior industry experience? That seems very risky and bad. Why not just poach proven talent? That would reduce their capital risk and reduce their turnover, hence saving on severance.
It's supposed to be that way.
There is high turnover everywhere dude - it’s sort of like pod trading short term momentum - ride the winning pms / cut the losers and do it right so u limit downside
What kind of maniacs put themselves through the ringer like this. Savage
Millenium has the tightest drawdown limits. That’s why.
So why would anyone choose to go to Millennium relative to other shops who can give them the same amount of capital?
IF they receive multiple MM offers
Easiest exits if you blow up?
Where do all the 80% go after getting cut/leaving?
If they go to another pod and end up being the 80% majority there, where do they go after that?
If you start at a tier 1 MM and get cut, you probably jump over to another tier 1 MM. Getting cut again you then are likely to drop a tier and sign with a tier 2 MM and after jumping around a few years you will eventually end up at a tier 3 MM before getting washed out of the industry. Options then include joining family offices, AM companies or sales and business development teams. If you are getting cut frequently after 1-2 years and are lucky that process can probably be stretched over a time period of 8-10 years.
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