MM now viewed more favorably than SM?

The only place this debate exists is on WSO. If you go to any of the twenty-odd SMs still performing well at scale, they will tell you that they play a different game than MMs: the LT game. It is not that a pod analyst can play this game any worse but all analysts only have finite hours in a day and at a concentrated SM where analysts have 1-3 new ideas a year, they are able to spend more time on their names doing LT work instead of crunching alt data. It’s just a different model. What I have personally noticed is that the best analysts perform well in either model.

The problem with SMs is that people started chasing formulaic prestige instead of fund performance, upward mobility, and investment style fit. When people started choosing TGM, D1, and Coatue over all else, this is what went wrong. However, if you choose a SM that has all I mentioned above, it will generally prove to be a much safer seat than a MM.

With that said, in the industry as a whole, MM’s are capturing more share and SMs are losing share. But in joining the HF industry your goal is to be at a well-performing fund AND perform well there, secular growth of MMs literally does not benefit you personally as a professional AT ALL if you choose to work at these places because your PM is silo’d from the broader fund. It’s not a tailwind in the traditional sense. In fact, it probably makes your job tougher as there’s more competition for alpha. Last time I saw someone do the math here, the average pod at Millenium made 10-15m, once you take out worldquant, SRBL type pods. How much do you think your take is going to be there? if you’re betting on secular growth of MMs to aid your career, buy the index, you shouldn’t be picking stocks.