PM / Sr Analyst at MM HF to LO PM -- doable?
How hard of a transition is this? Say you're a sr analyst (w/ big sleeve) or a PM at a MM, and say relatively young (late 20s - early / mid 30s). How hard is it to move to Fidelity / Wellington / Capital Grp and join as a PM?
Have been successful in MM context (ignore title I'm in l/s), but starting to appreciate lifestyle / stability of a LO seat, not to mention how insane the comp can be as a PM (mid 7s - low 8 figures w/ sizeable book). So:
1. How hard is this transition, and would LOs even consider taking a MM HF PM / sr analyst, and if they would, is it stupid to assume I'd automatically be a PM? Or would I just be sr analyst with sleeve (is this a thing in LO world?)
2. How big are new books? I manage a very large sleeve now and have a track to become PM here, but again, priorities shifting etc. If I can join as a PM, how big of a book would I get? $1-2bn or like $5bn+?
3. Are the economics THAT compelling? Can someone please lay them out? Back of envelope math: $3bn book, 50bps, 20-30% cut for PM (I completely made that up and it seems "reasonable", would appreciate color here) = $3-5m to PM? How does book size scale?
Thanks
Interested as well. Feels like WSO doesn’t have enough content on LO AM (i.e., blue chip mutual funds) and I would venture to say this is a better risk-adjusted career path vs. PE, IB, and VC, especially if you get a chance to invest into the private investments of all these big mutual funds.
Never head of anyone being able to invest in their AM's private investments - is this something you've heard of anecdotally?
General consensus is that the [risk-adjusted salary to WLB ratio] at LO AM is unbeatable. Adjusting for WLB here is critical since nowhere else can you pull guaranteed 7 figs on like 30-40 hrs/week at the senior level. Go on LinkedIn and you'll see PMs at tiger cubs exiting to LO AM. What do they know that we don't? Figuring that out is the key to making informed career decisions
Not seeing any prev tiger cub guys…which cubs did they come from so I can search?
Don't want to drop any specific names, but the way I did it was to go on LinkedIn, apply a filter for a current company (Capital Group, Wellington, D&C, etc), and then in the filter for past companies, enter the names of a ton of random cubs.
To save you time, here's the link. You'll have to look through each profile individually to filter out back office roles. I used Capital Group in this example, because they have by far the largest number of ex-cub analyst/PMs.
https://www.linkedin.com/search/results/people/?currentCompany=%5B%2240…
Yeah I feel like all of these PMs were promoted internally and spent 2+ decades w/ Fido Wellington CapGrp etc, no?
Fun fact: If you make PM at Capital Group you'll be a CAPM
Bruh hahahaha
What is the best way to become PM at a top AM? Think Dodge & Cocks, PIMPCO, Fapital Group, Infidelity, etc
*Dodging Cocks
Can't believe you missed BlackCock there
“Infidelity” is right (ahem Gavin Baker).
You’d potentially be a senior analyst at a LO but doubt a good AM would give you a PM seat. Virtually all PMs in LO are internal promotes
also the comp range you’re talking about is increasingly a thing of the past. I work at a top LO and a sr analyst pulls 1-1.5ml and a typical PM pulls maybe 2ml
How do experienced laterals recruit into LO? Same major headhunters?
How is PM comp structured? Thought it was many multiples of analyst / sr analyst due to formulaic payout/set cut of mgmt fee?
Depends on a number of factors. To be clear, I’m talking about new PMs (those who became PMs in the past 5yrs or will make PM moving forward) vs legacy seats where the main PM makes $10ml off $50bl AUM. There are some unicorn seats where you can inherit such large strategies but again those are very, very hard to find. At my fund, only 10% of the PMs have the seats with that kind of payout and they have been a round for decades
other factor that matters a lot in como is equity owned in the firm, matters a lot more at top boutiques vs bigger managers.
remember that fees are multiples lower today in AM vs the past. It’s not even funny, if legacy fees for institutions were 100bps of AUM new clients are coming in at 30bps…and this is for elite large AMs that have put up the numbers for years. I wouldn’t be surprised to see fees come down to 20bps for new clients in a decade. Infrastructure to run a fund won’t change much, so where does that cost burden fall on? Primarily PMs and sr analysts
Are you Capital/Wellington/D&C?
Believe I recall him saying he worked at a $40-80B AUM manager.
It’s meaningfully higher at the partnerships. You might make that from the partner payout alone (before all other forms of comp)
And what, you think you're going to become a big time partner as a new analyst? That's incredibly naive. At my firm, outside of the founder + top 10-15 folks on investment team & client directors who crush it, the rest of the 'partners' get breadcrumbs
Unless you join near the ground level / AUM goes 10x, becoming a new 'partner' doesn't mean as much in AM anymore
Bump
- At one of the 3 , from what I've seen it is def possible to come in as a senior analyst if you have a great track record and pretty quickly be given a select fund/ money to manage a sleeve
- no you will not come in as a PM lol w a multi billion book
- yes economics r v compelling...
Any worry about long term career trajectory given headwinds to mutual fund industry?
Thanks
1. have a sense for timeline to join as a sr analyst and then become a PM (at LO)? Would imagine I'd take massive paycut to join LO as an analyst-- not really interested in that but would I be able to manage a sleeve day 1?
2. How big are analyst sleeves usually, and how are analysts that manage sleeves comped? How big is starter PM book? Medium tenure PM book size?
3. How would you respond to above commenter who said "PMs are @ $2m"?
Working at a large LO AM, I can at least guarantee you that my company won't be giving a PM seat to someone in their late 20s / early 30s, no matter the size of the book. For that matter, I'd be shocked if we gave a PM seat to someone from a PM at another shop in general unless they were a very, very well respected and quite senior PM from a large fund (either LO or L/S). You would definitely get a sleeve in a larger fund that every analyst contributes to where I work, and maybe be able to work alongside a PM on a fund. But you are pretty unlikely to get a PM title right away.
For some perspective on this: when we recruited an MD from Lone Pine, he did not immediately get a PM seat. He now currently occupies one (runs $6.5bn), but only after 3 years of being an analyst at the company. Now, I very much think its possible to manage a decent sized book after a few years of working at the company from your background, but definitely not right away.
I personally believe the economics are really, really compelling. PMs make a lot of money. If you make it to PM level, honestly, I think I would find myself quite happy.
Thanks for this -- super helpful.
1. How does comp work at that initial "sleeve" level? Do you just get a small cut of the mgmt fee? What's ballpark here, >$1m?
2. Very helpful context on the LP guy. Is he the ONLY PM managing the $6.5bn fund?
3. How does comp work for newer PMs? Say you manage $6-7bn, I'd assume what 50bps fee on that? Does the PM get 20-30% of that fee income, so HSD mm? Just confused how PM comp in LOs works (coming from MM background). It just seems a little crazy that a mid / late 30s PM could consistently make HSD mm, unless that's the case then sign me up. Thanks.
1. Honestly probably not that much meaningfully for that fund, since everyone contributes to it.
2. Yes. He is the only PM on the fund.
3. Yeah, 50bps fee makes sense, but I don't know how much of that the PM gets. If anything, 20-30% sounds like more than usual for what it appears people around me make. But honestly, where I work it's sort of bespoke in terms of what a PM makes. Yes, you may get a cut of the fund (and maybe for some 20-30% is considered typical or low even), but honestly I have no idea what PM comp really is.
Would love to hear more detail on the economics/comp for the senior analysts. No doubt the PMs are doing very well
I'm a bit curious about the lone pine guy. Whyd he leave lone pine to move to long only? I know long only can be pretty chill with great comp but wouldn't he be making significantly more if he had stayed on as an MD at lone pine?
Curious about this as well. Would kill to get on the phone with him and pick his brain
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Bump
On a somewhat related topic, I know some of the top shops recruit directly from MBAs (Capital Group, Wellington, etc.) for investment analysts roles.
Does anyone have intel on investment analysts comp at some of those shops post MBA? My understanding is that it’s low relative to IB, Hedge funds, etc., but great trajectory for growth. Any insight on how true that is?
I took exactly this path. TC for most top shops will be around $300k ($180k base). T Rowe is actually a bit higher as I believe they have an equity component. Not at all a bad package, I think. Those in IB will be on $350-$400k - so was more than happy to take a haircut for a job that I truly love.
The trajectory is pretty defined for the first 5 years out of school. After 5 years (32) you'll probably be at $500k-$600k. Thereafter, I've seen all sorts of outcomes. Those that stick around as analysts can ramp up to $1M in another 5 years. Those that aim for the PM track might be at $2M.
Interesting. It seems like comp trajectory is more linear than the exponential curve for IB / PE, but presumably you have way more job security YoY despite long term headwinds to mutual funds
So $1-2M by age 40. Are you at a mega cap AM?
Does comp for life-time analysts continue to increase after they hit ~1MM by roughly age 40 or does it stay stagnant?
I just spoke with a recruiter at one of the shops discussed here (T Rowe, Capital Group, PIMCO, etc.) about a research associate role (i.e. role below an investment analyst) and found out that total comp was in the ~$270k ball park, which was surprising given that investment analysts are only making $300k post MBA. I would have thought the gap between the 2 roles would have been wider, but I'm assuming very little room for growth for the research associate role compared to the investment analyst role.
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