Idea Velocity and Work Process for New Pod Launch

Hi there - recently applied for a semi-pod like analyst role. Trying to get an idea of what the idea velocity and amount of work required is typical for these roles. Obviously it will be dependent on a lot of factors and I can ask the PM if/when it gets to that stage. But looking for what everyone else's experience has been like - a new launch so it would just be PM and 1 person assisting as the strategy gets off the ground. 
-How would a PM and 1 analyst cover an entire strategy / sector?

-Do you end up building out models on 50 names at the start to get up to speed?

-How long would they expect it to take to get up to speed?

-How do you diligence that many names in depth to get 25 longs and 30-40 shorts that quickly?

-What is typical for new idea velocity expected in this format? How do pod shops get into a process of generating new ideas that frequently? 

Lastly - any advice on what you all think I can do to nail this interview, lol. Thanks 
 

Comments (14)

2mo
mtnmaster1, what's your opinion? Comment below:

I guess what I am getting at is it seems like it would take a lot of time to ramp up knowledge across 100 different names in the TMT sector, then build out complete financial models on each company, and then identify each of the leading KPIs that driver performance results across those companies, and then develop a differentiated thesis on the trend or inflection of results across those names - so what is the average amount of work product you are expected to produce / deliver in this environment on a monthly basis? 

  • Research Analyst in HF - RelVal
2mo

Not in your space (equities L/S), so perhaps my feedback won't be directly applicable, but one thing to keep in mind is that your PM probably isn't expecting you to be right 100% of the time and you don't need to be extremely anal. 

If you're correct 55-60% of the time, you understood the assignment.

  • Analyst 2 in HF - EquityHedge
2mo

I was recently interviewing with some more established pods/PMs as an associate/junior and generally the feedback I got on ramp cadence is 1-1.5 names per week, idea generation starting ~6 months

2mo
mtnmaster1, what's your opinion? Comment below:

So ramping up 1-1.5 names would involve the following I assume:

1)Full financial model

2)Isolate the key drivers to track that will drive performance

3)expert networks / alt data to drive a differentiated view on key drivers (or confirmation that expectations have it right)

4)long/short/pass rec? 

Seems tough to do that in 1 week no? 

  • Analyst 2 in HF - EquityHedge
2mo

I don't think I can provide a lot of useful/credible inputs other than the PMs pretty specifically told me I will not be expected to "generate ideas' until 6-12 months of ramping names/tracking quarters 

2mo
HFDude1234, what's your opinion? Comment below:

Tough in a week, unless it's a similar business model to something you've done before

Screening ideas should be like 1-2 days, then short memo, chat w/ PM.  Is it an interesting long or short or pass?

I think 2-3 weeks for a fully fleshed out model w/ memo for a new name is sensible.  

Can screen 2-3 new names a week for 1 new idea on top of building out current models until you go through the whole coverage list.

2mo
onlythestrongsurvive, what's your opinion? Comment below:

I think it's more common your PM gives you crutches as you get up to speed. S/he likely already knows the top 2-3 names for each sector. So if you want to go long advertising, whether you pick name A or name B isn't as relevant as your weighting to that exposure. If you want short semis, then they're probably also correlated and they already know the shit can names at a high level at least. So you'll ramp on their brown/blind spots while they use recency bias to try to stay afloat.

Six months is normal ramp time from what I've seen and which is why first year bonus tends to be minimal or zero.

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2mo
Anchor, what's your opinion? Comment below:

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