Do people have a sense of what the median, 25th/75th percentiles look at these MMs? Obviously the ceiling is extremely high if you can generate P&L, but if the 4 dimensions are GMV / % return on GMV / % payout / split between PM and team, any sense of what the MEDIAN (not average since that is so skewed by the top) outcomes look like?
I ask because so many answers are “depends could be $0k or $20mm” (which is the same answer for “how much can I make yoloing nvda options as a day trader”), but that is not extremely helpful without knowing how the band of outcomes look and the skew.
median at citadel vs millennium vs baly vs p72 vs others can be…quite different…!
the exodus baly schonfeld crowd might come and debate this…but i will give you the calc i used to run in my head at the beg of year when i was what id consider median/above average pm (at this point i was maybe 2-3 years into being a pm - ive spent my entire career at 2 of the above shops)…while i think in terms of vol and sharpe, so this is kind of a flawed framework…to convert it to your dimensions…
$1-1.5bn / 4pct / 17pct / 60pct = 5m
my book / risk allocation / take-rate scaled as i had big pnl years and mastered the model, but that’s how I thought about it as a newer pm. as you have big years, you accrue deferred $, and then one of the other 3 shops buys you out
obviously i see all our pms pnl…and…no…the median team is not making 50 (maybe the average is? idk…maybe ill check the math tmrw since there are…some outliers…). id expect the above average pm that’s been around the block to put up 50-100+ with high teens or 20pct payout and taking ~50-60pct of the bonus pool…
but the median guy maybe 1-5 years as a pm at a good platform running >1bn with a not insignificant $vol budget? 20-50+ of pnl is target id say. not going to say median but you can kind of piece it together and there are so many factors at play
again i can only speak to the 2-3 larger platforms, and i honestly don’t really know what goes on at the other pod shops. don’t really waste time talking to them!
by the way…
i find we (im also guilty of this) plan for the ev outcome (~4pct), but end up with something closer to the tails, so this question and framework of thinking is also somewhat flawed
what im saying is…you plan for 4pct and can end up 1pct or 10pct roGMV…yes 4pct / middle outcome would happen a lot…but we don’t do this career for the middle outcome…you’re playing for the 10pct roGMV case on a $2.5bn book at the height of your career! then dmitry coughs up 50-100m and hires you to run corbets…joking…maybe? kidding have a good night everyone
Haha - laughed out at D/corbets
this really isn’t the right way to think about it though. there’s so many factors at play
ive seen fresh pms make 120m pnl year 1 and ive seen others lose 30…
This dude is the goat
Great info! Been wondering this because I've seen it around, in simple terms, how does a vol budget work?
Rapidly becoming my new favorite poster on this site, thanks for coming by and dropping knowledge. Top 3 WSO users of all-time along with Bondarb and Rumplestiltskin.
Depends on how you account for survivorship bias. If you only look at PMs with 3 years or more on the buyside (to eliminate newcomers that disappear within the first two years), I would say 1m/3m/10m are the percentiles. If you include everyone, it's probably more like 250k/1.5m/5m. I'm not on the equities side where teams are structured a bit differently so the numbers could differ there.
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