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Based on the most helpful WSO content, it's not uncommon for PMs to hop between different multi-manager (MM) funds after hitting drawdown limits. Here's how they might "sell" the drawdown to potential new employers:
Regarding MMs that might not hire PMs who have previously hit drawdown limits, the context doesn't specify particular firms. However, it's generally understood that the industry can be forgiving if the PM can demonstrate that they've learned from the experience and have a solid plan to avoid similar issues in the future.
For your follow-up question, here is a question that you might be interested in and I can help you with: Do most PMs and analysts hop around different MMs after being blown out because they can't find good seats anywhere else?
Sources: MultiManager PM (Millenium, Balyasny, Schonfeld) minimum requirements, Green flags that your PM might be successful later on, Performance of the best PM’s at MM’s?, DE Shaw L/S equity, HF PM Q&A
Any color from fellow PMs?
Perhaps they aren't PM's anymore, and hence the lack of replies?
In all seriousness, i guess it depends on the situation and how it happened. Did you get killed by a one time news event? Was it a long and gradual decay? Did your strategy struggle market/industry wide?, etc..
Another question might be why weren't you diversified in your alpha signals? Why solely dependent on one source, and why aren't you diversified?
Either way, good luck.
I think a classic one is "my previous fund forced these overlay hedges on my book that I had no control over, I wouldn't have blown up without those trades forced on me".
A similar excuse is to blame the net exposure constraints, because they were too loose or too tight.
Of course some also blame their team. Particularly in funds where analysts manage sizeable sub-books that net against the rest of the pod.
Of course in all these cases what the PM is trying to portray is, the circumstances that caused the blow up won't repeat at the new fund, so new fund can trust me to do better this time.
In my experience, biz dev at MMs tend to be extremely skeptical about PMs claiming they can overhaul/re-engineer their investment process.. so it's a better idea to claim you will largely stick to your process but the different circumstances at the new fund will better allow you to be successful.
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