Intellectual Stimulation at MMHF’s

I worked at a top MMHF for a c.1 yr before leaving for another fund (very different strategy). I rotated across quite a few pods so I'll try and explain what you should expect and how I found it (in general but every pod is very different!)

Forget being an intern as its not super relevant, but let's start with what you should expect to do as a junior Associate/Analyst and then how that should progress at one of these funds (this is for L/S eq btw):

Depending on the size of your pod, you will either be helping your PM/Sr Analyst with the names they cover (if it’s a small pod that only covers 30-50 names). If it’s a large pod (each analyst covering certain stocks in a subsector) then you will be allocated a few stocks that you should start ramping up on gradually, with the goal of fully initiating on these names within your first year. Fully initiating = these are now your stocks, and you will be the major driver behind them (alongside the PM of course)

You are neither a “true” investor nor a trader at one of these funds - you are almost always something in between. The best way to describe what you are doing is that you will be using fundamental analysis (alongside other alternative ways of analysis) to determine what your coverage stocks will do in the next quarter and how you want to be positioned for them.

For the initial work you will be doing, this is the most fun part if you are passionate about actual investing/learning about new businesses, as you are ramping up on new names by pretty much knowing everything about them. Ramping up includes speaking with sell side, reading all research reports and all their releases, creating your model, speaking with industry experts, etc. For the model, you’ll usually start by inputting the historical financials in accordance with how the company reports for ease when they report in the future (can be quite tedious), then you will start creating your own summary/model tab which has whatever analysis you want.

After ramping up on the new names and knowing everything about them (literally everything) you can now initiate on these names. This is when the job got extremely boring for me, as you aren’t thinking about the bigger picture, you don’t care about the company as an investment. All you care about is what the STOCK will do in the next quarter, something which could be influenced by a variety of factors such as missing/beating earnings, macro, etc. A lot of your work here will be trying to narrow down something like if they will beat or miss earnings, and you can do this by having a very detailed bottoms up build for their costs or by having alternative data such as credit cards (a little outdated but you get the idea). You will also think about how the market is positioned, factors, etc which will influence how you will be positioned before the print. You will rinse and repeat this for the foreseeable future (which makes the job extremely monotonous as all you do is update your models, speak to IR for guidance etc.

What I described in last paragraph is what made me sort of hate the job. Ramping up on your new names and having complete autonomy over your schedule is amazing at first, but then once you start doing the actual job, it gets boring extremely quickly if you are passionate about investing/deep fundamental research, as it’s the farthest thing from that. If you are someone who is motivated by competitiveness of public markets (and of course the money) then maybe you might find it fun from that aspect (it also helps if you aren't too focused on making your entire life revolve around your job). If you are getting in because you are truly passionate about investing, then this is most definitely not the right fit for you (PE, LO, SM is a much better fit).

See the below post from a good fintwit account regarding life at a MMHF - Will be helpful to further illustrate your day-to-day: https://twitter.com/bucketshopcap/status/1623085815155896322?s=46&t=ZZZ…

There is nothing wrong with what I described above, some people love it and make a lot of money doing so. You just have to be honest about what motivates/drives you in life to get an answer if the MM life is for you.

This is just an overview but happy to expand more if you have any questions.