Q&A: Finally made PM @ LS fund

Hey everyone

After 7 years of grinding in private and public markets, I finally made a portfolio manager at a small hedge fund.

It's far more difficult than I had ever assumed, and anyone who thinks they could just take over a book and sleep fine at night is in for a wakeup call.

That said, feels great to know Ill never have to be a damn analyst again. Leading the team is a balancing act between motivating people to their best, inspiring the right kind of (thorough) curiosity, and letting peoples' talents shine.

I'm learning to "cowboy" less and coordinate more. This is after 5 years leading a globally distributed team.

Idk, Ask away!

45 Comments

Anonymous Monkey

?

5y

Soft skills are a must. You pick those up over time. I ran a team already so I had decent people mgmt skills, systems in place to make sure things dont fall thru the cracks. Managing upwards is a big portion of getting to pm -- making pms happy along the way. Its also a big portion of being pm, theres always a CEO, chair, or group of investors to answer to.
Something unique -- everyone can model companies, write basic python, understand statistical analysis. That something unique is usually some sort of risk taking or putting yourself out there (side project, etc.) that dovetails into the funds activities.

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Anonymous Monkey

?

5y

Most Helpful

75% of capital to LS book, 25% to MN book. The names on each side of the book in the fund have a lot of overlap, but we do some extra diversification in the MN fund to minimize vol, skew, kurtosis effects
not very. we have a longer term outlook, so, quarterly performance isn't looming over our heads. that said, if we do not raise more assets we may have to re-examine our approach and have difficult talks with investors.
Yes - this is will very greatly - but our team is very small and the idea generation is never for a specific position but for an additional strategy or "tool in chest". In that regard, our data science team and I work together to discover new correlations and test ideas. Within the context of a model telling us to put on a position, I rarely override, unless there are liquidity concerns. We use models to optimally size and there is an execution trader to worry about timing. Once a position is in the book, then its very hands on from both a risk management perspective and giving our execution trader limits and latitude to trade around news and flows i the names we are in.
Comp structure is really simple: reasonable base, discretionary performance bonus, 5% of all profits (we have some non-hedge fund business lines too that i lead). Analysts are salary, discretion and "phantom" equity (0.1-1% depending on tenure). Analyst pay is probably way below industry, but our asset base kind of dictates that.

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MMPM

HF

5y

"I'll never have to be a damn analyst again"?

Dont know what makes you think that.. unless you perform, nothing guarantees you are a PM for life.

That said, good luck.

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Authored by: Certified Hedge Fund Professional - Portfolio ManagerCertified Hedge Fund Pro

Anonymous Monkey

?

5y

i mean, thats up to me tho. if i go bust, fund blows up, whatever, im not going back down the totem pole. ill figure something else out, launch a PE fund, whatever.

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Dogs of The Dow 2021

TheFamousTrader

HF

5y

So let me get this straight. If it doesn’t work out as a HF PM, you think a reasonable other option is to launch a PE fund?

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Authored by: Certified Hedge Fund Professional - PartnerCertified Hedge Fund Pro

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Q&A: Finally made PM @ LS fund

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Q&A: Finally made PM @ LS fund

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