Market Maker or MMHF
Hi monkeys, some questions in choosing between offers that need your opinions, Really appreciate any inputs/advice.
I had my undergraduate in top15 college in US studying math and after graduation doing equity derivative trading at a bank. Increasingly more interested in the fundamental side so quit my job to pursue a master in finance degree to learn more about the basics in accounting/corporate finance.
Forward to today, have two offers that I cannot really decide:
- Fundamental analyst role from a market making firm (sit with single stock option trading desk to take some short-term directional bets)
- Fundamental long/short analyst role from a MMHF but need to go through training before being placed to a pod so knew nothing about which PM/Sector I will work for now
compensation level is similar so not a factor to consider :/
My questions:
As my long-term career goal is to be a PM on the platform, it seems I should choose offer 2 but as my life will be decided by the specific PM I will work with, which I have no idea now, this is really disturbing. For the market maker role I know the team and specific sector I will cover.
Also does the fundamental analyst on the option trading desk be seen as inferior compared to the traders? And how difficult it is to pivot to a junior PM at a platform after several years as a fundamental analyst in market makers? I assume the skillsets are sort of transferrable but the trading frequency is higher for MM I assume.
And do you guys think specific market matters for your long term career? The market maker role is for Euro equity and MMHF role is for APAC equity. Should I assume that Euro equity give me more potential in long term instead of being canned in specific China/HK? I grew up in China by the way but since I went to US since high school I am not that familiar with Chinese companies so to say to have an edge in analysis.
Thanks!
Based on the most helpful WSO content, here’s a breakdown of your situation and advice to help you decide:
1. Long-Term Career Goal: Becoming a PM
If your ultimate goal is to become a PM at a platform, the MMHF role aligns better. Multi-manager hedge funds (MMHFs) are structured to provide analysts with a clear path to becoming PMs, as they allocate risk and AUM based on performance. However, the downside is that your success heavily depends on the PM and pod you’re placed in, which is currently unknown. This uncertainty can be unsettling, but the MMHF model is designed to reward strong performers with more responsibility and risk-taking opportunities.
On the other hand, the market maker role may not provide a direct path to becoming a PM. While the fundamental analyst role on the options trading desk could offer valuable experience, it’s generally seen as more of a support role compared to traders. Pivoting to a PM role at a platform from this position could be challenging, as the skillsets (e.g., short-term directional bets) may not fully align with the longer-term, fundamental investment approach typically required for PMs.
2. Uncertainty About PM/Sector at MMHF
It’s true that your life at an MMHF will be significantly influenced by the PM and sector you’re placed in. The best advice here is to focus on the learning opportunity and the track record of the platform. As highlighted in WSO threads, the most important factor for a junior analyst is the team and PM you’ll work with. Since you don’t know your PM yet, you’ll need to trust the platform’s reputation for training and placing analysts effectively.
If you’re concerned about this uncertainty, you could try to gather more information about the training program and placement process. For example, does the platform allow you to express preferences for sectors or PMs? Are there opportunities to switch pods if the initial fit isn’t ideal?
3. Market Maker Role: Inferiority and Pivoting
Fundamental analysts on options trading desks are often seen as supporting the traders, which could be perceived as a less prominent role. While the skillsets (e.g., analyzing fundamentals, taking short-term bets) are somewhat transferable, the higher trading frequency and shorter time horizons in market making may not fully prepare you for a PM role at a platform, where longer-term investment processes and risk management are critical.
Pivoting to a junior PM role at a platform after several years as a fundamental analyst in market making could be difficult, as platforms typically prefer candidates with direct experience in fundamental long/short investing.
4. Market Focus: Euro Equity vs. APAC Equity
The market you focus on can have long-term implications for your career. Euro equity may offer broader opportunities, as it’s less geographically concentrated compared to APAC equity, which could limit you to China/HK-focused roles. However, your background (growing up in China but educated in the US) could give you a unique edge in APAC equity, especially if you develop expertise in analyzing Chinese companies.
Ultimately, the market focus should be secondary to the quality of the role and the learning opportunities it provides. If the MMHF role offers better training and a clearer path to becoming a PM, it may outweigh the potential geographic limitations of focusing on APAC equity.
5. Stress and Work Environment
Final Recommendation:
If your primary goal is to become a PM, the MMHF role is the better choice despite the uncertainty about your PM and sector. The platform’s structure is designed to reward strong performers with more responsibility and risk-taking opportunities, which aligns with your long-term aspirations. While the market maker role offers more clarity upfront, it may not provide the same career trajectory or learning opportunities.
That said, make sure to gather as much information as possible about the MMHF’s training program, placement process, and flexibility to switch pods. This will help you make a more informed decision and mitigate some of the uncertainty.
Sources: Questions about Single Manager vs Multi Manager HFs, Q&A: 2nd Year Equities L/S HF Analyst in Hong Kong, LO to MM HF?, Citadel vs. Millennium vs. Point72 vs. Other Multi-Managers, Q&A: HF Analyst @ $5bn+ Fund - Breaking In and Transition to Risk-Taking Role
They're different roles with different outcomes. MM has done incredible since covid due to the volumes of trading, but that could very easily change. Also, your end goal is to end up in a hedge fund, so why would you start your job off in a non-hedge fund industry?
Totally understood your point. What bothers me is that I don’t know which sector to cover and which PM I will work with before joining the firm and probably only know after the training period. For MMHF, the PM is the only thing that matters and it’s possible I be assigned to some random new PM.
Therefore, if the fundamental analyst role at a MM can really take the bets as the team members said and accumulate experience then I guess it’s a better choice.
What I don’t know and would like to ask is that whether the experience being a fundamental analyst at MM is transferrable to MMHF because I assume they take more factor risks and pay more attention to underlying flows as they sit with single stock option team, which is not the bread and butter of a MMHF. Thanks!
That's all true. That said, AFAIK everyone in MM knows the game. They fully understand that sometimes, your pod blows up and it ain't your fault. It's kinda like how sometimes traders or investment bankers get fired for some stuff that isn't their fault. And I mean, really think about it. If everyone who went to a pod wouldn't be hired again after getting fired, then no one would ever work at a pod shop. Pods cycle people.
Ultimately, it is your decision to make, as I'm sure it wouldn't be impossible for you to move from an MM to a hedge fund, and MM is currently probably the place to be if you're not looking for those extreme tail cases(plus, many MMs with more cash like Optiver and SIG let you take more prop and directional risk), but your end goal is to end up in a hedge fund. I'd still take the hedge fund gig if I was in your shoes. But either way, you'll do well.
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