IB -> Macro HF
Hey All - First time caller, long time listener. I'm in Structured Credit at a BB working on esoterics (won't give more details to avoid self-incriminating as we're one of the few on the street in this particular business, but will say we're on the illiquid and complex side of things) looking to make a passion-driven pivot to a macro fund.
In digging through guides, public forums. etc and speaking with peers, I get the sense there's frankly a dearth of detailed content on macro strategies (which I'd think is driven by the opportunity set skew, as well as the fact that the top-down market segment is just less homogenous). So I'm going to ask some stupid questions:
- What are the different "flavors" of macro? How can you bifurcate at a deeper level than just discretionary vs. systematic (i.e. do some strategies express theses more often in say credit and rates than other asset classes, do some have broader mandates than others, etc.)? Examples would be extremely helpful
- Assuming there are discernable buckets, what would interview processes look like for each / how does one prepare (apart from the cliché "just follow markets / read a ton and have your mental model for the world)?
- Which recruiters work on macro mandates?
I realize I'm walking off the reservation a bit here (exits from my team are typically to Spec Sits teams in Private Credit), and that a background in trading / research would've made this pivot much easier, but frankly the idea of being handed x names to follow and limit brainstorming to is just not for me. Definitely a STEM / research-focused person at heart and care dramatically more about macroeconomics / public policy / cross-asset flows than entrepreneurship and business models. I also dislike the fact that private credit (going to paint with a broad brush here, so please correct me / give examples if you disagree) won't make directional bets (constantly hear people regurgitating Marks's "the macro future is unknowable") and that it's just not their business.
TLDR; Solving for a role with as broad a mandate as possible. That said, I have built a niche in modeling / understanding complex situations that's monetizable (and I do enjoy it as well), so am actively looking for an intersection between that and making macro bets. Would greatly appreciate any advice .
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Super helpful answer, I really appreciate it MacroJunkie. Have read some posts from Martinghoul and macro bruin over the years but probably a good idea to go back and refresh as I think through what exactly I'm aiming for. Also appreciate the suggestion to start producing my own commentary to leverage for conversations, think it's a good one.
Couple of follow-ups:
- How long will you guys hold a position for on average? (I realize this is extremely path dependent)
- What is the lifecycle like for a trade idea, from the point where you're inspired by something you read / saw and produce thoughts to you actually taking risk? How much time is going by?
- Further to the above, when you pitch an idea to your PM, what are you showing up armed with (e.g. a writeup to debate, a model with some distribution of outcomes, etc.)?
- How often are you talking to the sell-side / who are you talking to? (i.e. just when you're ready to implement or constantly for color / to bounce ideas)
- How many positions will you personally have on at any one time?
Candidly having never spent a day on a proper trading floor (in structured credit we consider it a trading floor but it's not), I'm unfamiliar with your version of the lead generation -> analysis -> execution process so trying to understand the speed dimension and the extent to which you do deep analysis on one idea first versus take a position early and "build the car as you're driving."
My reaction to your post is also that what you describe as "micro macro" probably dovetails a bit better (or maybe just not quite as poorly) with both what I'm currently doing / what I imagine (i.e. looking for rel val across asset classes). Would be curious to hear to what extent having deep modeling experience / debt background would be helpful (realize this is likely out of your purview, but would encourage you to take a stab anyway if you have opinions).
At the risk of really sounding dumb, any macro funds that come to mind with deep roots in debt?
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Who are the central bank research commentators you read every day?
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Zoltan Pozsar
Zoltan Pozsar, Joseph Wang, Matt King, Jeremy Stein, Hyun Song Shin, Manmohan Singh, Claudio Borio, and George Selgin are a few I can think of off the top of my head
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