LO analyst vs MMHF sub-PM
Hi all - I'm at a bit of a 'career crossroads' type moment and very interested in other people's perspective. Currently doing equity L/S in a very long-term / concentrated / 'tiger cub' style place with effectively permanent capital covering 2-3 sectors. Have been here ~8 years (some sell side before) and now in a "'#2" to PM type role - the day-to-day is great, my performance has been good, WLB is awesome and I enjoy this style of investing, but I have very limited visibility on when (if at all) I would be given the opportunity to step up into a full PM role. At the moment I don't have a dedicated carve nor is there any real way of pulling out a formal 'track record' to use in future - and I'm very conscious that with >10 years in this industry now I really need to be building some kind of track. Also very limited upside leverage in comp to performance at the current place, even if I stay and were to eventually get a PM seat.
As a result I've been looking at a few different opportunities and I'm reaching the point where I probably need to make a decision on at least one of them pretty soon. Given what I do today I can go in two very different directions - just trying to think through which makes more sense.
1) MMHF - 'sub-pm' type seat.
I will likely have the opportunity to join one of the big platforms and run a sleeve as a senior analyst / sub-pm. This feels like a 'great seat' as far as MMHF opps go: I would be running an industry vertical with a couple of juniors in a new pod that is launching (with a successful PM who has moved over from another platform, not a new first time PM).
Pros:
Comp upside obviously very material if it all works.
Would get a dedicated carve and start building a track record. Likely would be an op to spin-out if things are going well after a couple of years.
Would learn a new skillset with higher turnover style.
Data access / "institutional capabilities" (for want of a better phrase) vastly better than what I have now.
I like shorting - would keep this with this role.
Cons:
Blow up risk.
Idea generation process would have to be very different to what I do now given the time horizon.
Likely a very intense ramp period going from "broad sector" coverage to knowing 50-60 names inside and out. With the target timelines on launching this would probably end up with me doing a bunch of work getting to know some new names during my non-compete period - not something I'm super excited about when I've not had more than 10 consecutive days off in 10 years - had been looking forward to an extended break which honestly was a motivating factor for moving in the first place.
WLB would be a lot worse than the current role, unsurprisingly.
2) LO analyst seat
In a couple of processes for Analyst roles at two of the big LOs. Not Capital / Wellington but some of the other big shops (MFS / Putnam / T Rowe / Fidelity etc). For at least one of these there is a very plausible PM track (global sector fund in the sector I would be covering).
Pros:
My understanding is comp would be competitive with my current shop (mid-6 figs £) and then would ramp over time, plus more stable than the MMHF.
Would start to build more of a formal track via analyst fund / internal alpha tracker systems - we have nothing like this in my current role, to my frustration. Obviously not the same as running a carve, but still a step in the right direction.
Culture / WLB / investing style for longs probably all more similar to what I have now. These are the kinds of shops that people don't ever seem to leave, which is encouraging.
Would get the chance to learn some new subsectors I've not covered before (part of the job I really enjoy), without the intense time pressure of a pod launch date.
LO PM role on a scaled fund seems like an amazing gig.
Cons:
No shorting - which is something I've enjoyed a lot and had pretty good success at in the current role.
Would be swapping one seat with "potential PM track but no clear timeline or targets to hit to get there" for another one in all likelihood.
I think there would be more leverage to investment performance in comp here, but not as clear / formulaic a link as at the MMHF.
LT structural pressures on the industry / fee compression etc.
Probably more bureacracy.
I'm in the very fortunate position of having a few different directions I can go in, but very curious if there is anything else people on here would flag I should be thinking about - I am trying to keep an open mind. Staying in the current role is a genuine third option as well - it's still a great seat and I am conscious that I might be falling for "grass is greener" syndrome. I will likely have to make a decision on #1 before I reach the end of the processes for #2 unfortunately.
MMHF option if you're going to switch. It gives you the potential for the trajectory you want, and its not like your coming in as a junior. I've also heard anecdotally that's its not necessarily easy for senior SM / LO analysts to get opportunities to switch to pods at a senior level due to the associated ramp and need to take risk. So if somebody is giving you the option, I'd take it (that is, if you absolutely want to move).
My advice is to really think about what you’re solving for. If you want to be a risk taker and are in a seat now where you are more tactical in your investment process, then do MM. I made the switch from single manager to MM at a similar career point. I have not found the investing style to be much of an adjustment at all. That being said, the two variables that matter a lot are your PM’s investing style (some are more fundamentally oriented than others) and the sector you cover. Some sectors unfortunately force you to be less fundamental and to be more focused on trading sentiment and positioning. But not all. The other thing to think about is that the MM model is a lot of work. I am working way more than when I was at a single manager. By virtue of the model, unfortunately there’s no way around it. However, for me, it is a means to an end.
Was wondering, What sectors are more fundamental vs more technical?
This is helpful, thanks. Would say I am at the more tactical end of investing style at my current shop, but that is still a long way away from what the pods do. I take the point about the MM model being a lot of work which is something that I am definitely thinking about here.
Also curious what sectors are "less fundamental" in pod-land. My suspicion is mine is one of the more fundamental ones (I am not doing consumer or TMT) but interested in this point.
I don’t know, people keep talking about how different it is. I worked at a tiger cub. It’s not that different. Sure you focus on the quarter but in this day and age, if you are oblivious to the quarter, I’m not sure how you’re really performing.
TMT is less fundamental I would say. Basically in sectors where it’s very obvious who the winners and losers are, or if everyone is a “good company” then the hard part is having to manage relative spread. Intraquarter it becomes more about trading the narrative which can be annoying.
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