Q&A (or sort of): Platform HF in Singapore
Reposting (too distracted and had put this in the PE sub-forum lol):
I'm currently a senrior analyst in one of the platforms in Singapore with a sleeve and clear path to making PM. I understand there probably isn't much information out there about the space and especially in Singapore.
I'll try my best to answer any questions that gets posted here. Please also be understanding - given the community is so small here, I'll not be sharing much details in terms of personal background. For everything else, I'll give it my best shot. Cheers.
Thanks so much for doing this!
1, In my view, the single most important skill is the ability to question everything in a healthy manner. Especially yourself and your conviction and what you think you know. Its not what you know you don't know that kills you, it's what you don't know you don't know. Technical skills are easily learned and like you said can be replicated by AI these days. I know this may not be exactly the answer you are looking for but this is my genuine view.
2. Yes I broadly agree with you that knowing something the street doesn't know is valuable. And of course there are many teams that make use of alternative data to get an edge. But I sometimes wonder how often it is you get intel that only you know. I also am of the view that you don't have to be obsessed with being contrarian (aha everyone else is wrong and I am right), sure it feels good but it's not what guarantees pnl. Our buddy Mark says it best when he said "Markets can remain irrational longer than you can remain solvent". I think the true value-add from an analyst comes from advising your PM on when its the right time to follow consensus and when is the right time to turn contrarian. Also read this as: Understand you may have intel and that may be accurate but you may still not make pnl from it.
3. Always ask questions and don't be afraid to go against your PM/team. Healthy discourse challenges everyone in the team to think beyond what they have settled on. If your PM/team doesn't seem open to this, tbh it feels like a bit of a red flag to me.
What do LO analysts have to “get”/learn to make the jump to MM LS in SG
How long is too long to stay in LO before jumping? Is it a YOE or age thing
Have you ever considered moving to HK where market/capital flows is bigger
Let me start off by admitting I have a bias against LO analysts making the jump to MM HFs. This is also a function of what I have observed throughout my time here -- which is that analysts who have spent considerably time in a LO struggle with the MM's short-termism and trading frequency typical of a platform. I have seen these analysts struggle to shake off the buy-the-dip mentality and they tend to get too married to their ideas/views. LO analysts have deep understanding of the companies/sector but are generally lacking in their understanding of flows/macro/market psychology, which in the short-term may dominate vs fundamentals.
If you are at a LO and would like to succeed at a MM then I would recommend trying to make the move as soon as possible. That being said, I believe a LO seat is a great one. And in my view, it is a very different job (and a great one at that). I also hope to spend some time at a LO somewhere down my career.
YOE doesn't mean anything if you don't contribute to pnl.
With regards to HK. Yes I've considered and have spent some time there but I prefer the lifestytle in Singapore. If I was straight out of school then HK would be a no-brainer. Also, at least for now, I don't trade too much HK/China so no real benefit being there.
To follow up, is the move from MM HF back to LO possible/probable, esp if you spent a lot of time at the start of your career in the former (which I assume to be your case)?
Still undecided about MM LS or staying in LO for me in the future. I think my prime consideration is following a star PM with track record, regardless of LS or LO. Thoughts on this? Or you think LO is a sinking ship/structural decline?
What are your views on credit / event driven desk in SG
I don't have too much intel in both strategies. I know there's only a very small handful of event desks in Singapore. And as I undersdtand it, you will be required to trade across geographies and legal jurisdiction and framework, simply due to the liquidity profile in this part of the world. Events are also a bit hairier in this part of the world compared to maybe the US and even in Europe. This is not to say that this is not a profitable strategy, I do know of teams who have made good money that trade m&a and special sits. Though they mostly compete with capital from HK, JP and AU.
do you focus on asia or us/global? if the latter, how do you handle sleep schedule and staying on top of news and flows?
if the former (asia), how do you navigate 1) liquidity 2) volatile moves (retail, insider trading, crowding, whatever) ?
Focused in Asia but have meaningful exposure in Europe and the US as well. Not real formula to it but the best way I can explain it, is that you eventually find a way that works for you in terms of sleep/life/work/news flow etc. More importantly is managing risk/exposure. So obviously I'm a lot more hedged up in Europe and US where I'm not awake for a lot of the trading session and maybe also lower notional for the most parts. Just need to make sure a big blow up doesn't kill you before you can react.
Being focused in Asia also forces you to be more familiar with the different market nuances -- and you're right there's plenty in every country over here. For the most parts, you got to ride with it and/or trade around it. For e.g. Korea's retail traders are pumping a stock to 250x P/E? I'm more inclined to tag along for the ride (of course situation dependent) than figure out why its not at my TP.
Thanks for doing this! Would you recommend transitioning to MM (currently in LO)? At MM, how many positions do PMs hold at a time? What do you think of a small sleeve ($20m) + high diversification requirements (100+ companies) - find this setup a bit hard to express conviction?
I can't tell you whether I recommend transitioning to a MM without knowing what your objectives are. Are you looking to maximise pnl? Are you looking to take more short-term bets? Are you comfortable with being a lot more on edge? Are you willing to sacrifice (quite possibly) the next 6-12 months to get into the groove at a platform? A lot of pros and cons
How many positions really is PM/team size dependent. I guess on average you should cover around 50 names? And then hedge around it, so maybe a fundamental PM on his own will have ~100-150 name at a single time? But again, the variance is too large to properly give you a good average. It depends on width and depth of coverage, whether a PM is comfortable taking small positions in relatively unlearned sector etc. I've seen a very broad range.
$20m / 100+ feels a bit too small in terms of $ but if you are an analyst moving into a sub-PM or risk taking role, probably a reasonable start.
Thanks for doing this! I’ve been looking to switch and sort of testing my own theses. It hasn’t been too bad on the long positions, but I’m wondering how to go about assessing & monitoring short positions.
So far I can sort of identify if something is likely to tank in the short to medium term because of fundamentals or in this market, when’s it’s clearly a pump and dump, but I don’t have a good enough grasp of technicals? other things? And I wouldn’t dare to initiate a short position.
I’m not sure if it’s because I’m a generalist and have been dabbling in a broad range of industries?
What’s your framework for initiating and then managing risk for a short position?
Short positions are exactly the same as your long positions. The number one question is ask yourself is how and when can a position wipe you out. And you try to think about all possibilities to the extent possible, then try again.
Thanks for running this! Couple of questions from a banker trying to make the move over:
1. What does your pod's interactions with the BD team look like between when you are given names and when you interview a candidate? If you pass on a candidate, are they ever tested with another pod, or is that it for them?
2. What sector teams tend to be hungrier for fresh bodies / higher turnover? Imagine this changes with market environment but also curious if you have noticed any trends through the cycle.
You mentioned you spent some time in HK. Is it possible to move from elite boutiques in London to HF in HK?
How would you advise incoming analysts to position themselves for this? Is it purely headhunter driven?
Thanks!
I think platforms take literally anyone from whichever background as long as the hiring managers think you can value-add. That being said, most hiring comes via headhunters (although some platforms' BD teams are more poractive than others as wel), so I'd say if you have bulge bracket experience you'll be fine.
what's the shareholder activism scene in that part of the world? not an expert on the SG/APAC scene but am curious to see if any HFs based in SG are adopting the strategy as shareholder and corporate governance codes are evolving in the region.
Very limtied shareholder activism in Singapore. There's of coursse, Effissimo which technically is based in Singapore but trade mostly Japanese equitities. Once in a blue moon you get small funds trying to push for activist campaigns but all micro/SMID caps. Nothing remotely close to the scale of Elliot and the likes.
The vast majority of pods in multimanager funds in singapore are focused on macro (rates/fx/vol/etc) while HK has more of an equity focus. The entire ecosystem in sg (eg sellside traders, conferences, other funds) is so heavily focused on macro and commods. If youre doing equities doesnt it get lonely
Since being on this gig, there were man things that I've learned about the job that I had no idea before. The lonliness is definitely one of those. It's a really lonely job, very few sympathise with you on bad days and on good days, fewer give you credit. It's very different from banking/sell-side where you have a bunch of colleagues to shoot the shit with. And you are right, especially in Singapore this is very much amplified given how few seats there are.
For sure, one of the senior analysts I knew actually moved to HK for this reason too. I guess on the flip side, it's (relatively) easier to focus more on family/life outside of work? (Even though you never stop thinking about markets.)
Hey, thanks a lot for sharing. Have been in SG before, but my main opp is actually in HK (am from SG). Just wanted to hear more about your experience given the very few L/S seats within SG, and if you may have any advice/tips for someone joining a more experienced team as a junior.
More of like ramping up, understanding the PM's process and trying to fit in it etc. Really appreciate your insights and happy to hear if you have any thoughts!
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