Quant PM from LO to SM/MM HF

Based on the most helpful WSO content, here are some insights regarding your potential move from a large asset management firm to a multi-manager (MM) hedge fund:

Key Considerations for Moving to an MM Hedge Fund:

1. Compensation Upside:

   • Higher Potential: Compensation at MM hedge funds can indeed be higher, especially if you perform well. However, it's important to note that the environment is highly performance-driven.
   • Risk of Termination: As highlighted in previous WSO threads, even top-performing PMs can be let go after a couple of bad quarters. This is a significant risk to consider.

2. Job Security vs. Risk:

   • Current Security: You currently enjoy great job security with a stable salary and bonus structure.
   • Risk Tolerance: Given your age and willingness to take on more risk, moving to an MM HF could be a viable option. However, be prepared for the possibility of job instability.

3. Work-Life Balance:

   • Current Balance: You have a good work-life balance at your current job.
   • Challenge and Growth: If you seek more challenging work and growth opportunities, an MM HF might provide that, but it will likely come at the cost of your current work-life balance.

4. Quant Approach and Constraints:

   • Limitations at LO: Your current setting limits your ability to implement a short leg and imposes ESG constraints.
   • Flexibility at MM HF: MM HFs typically offer more flexibility in terms of investment strategies, including the use of short positions.

5. Learning and Collaboration:

   • Current Expertise: You feel that you have reached a plateau in terms of learning from your colleagues.
   • Collaboration at MM HF: The pod structure at MM HFs can be isolating, as PMs often keep their strategies secret. While there is some cross-collaboration, it may not be as extensive as you hope. As noted in WSO threads, the culture can be very "every man for himself."

Additional Insights from WSO Threads:

• Pod Structure: PMs have full discretion over managing their pods, but there is some cross-collaboration, especially in cross-market trades (e.g., rates trades overlaid with EMFX or CDX for carry).
• Performance Pressure: The environment is highly performance-driven, and PMs are often under significant pressure to deliver high Sharpe ratios and quick returns on ideas.
• Networking: It's crucial to network within the firm and with other pods to maximize learning and collaboration opportunities.

Conclusion:

Moving to an MM HF can offer higher compensation and more challenging work, but it comes with significant risks, including job instability and a potentially more isolating work environment. Carefully weigh these factors against your current job security and work-life balance before making a decision.

If you have any more specific questions or need further insights, feel free to ask!

Sources: What is your relationship like with your PM?, Q&A: Non-Target School to Portfolio Manager at a Top Hedge Fund – 6 Years Out of Undergrad, Life in a MM HF, Performance of the best PM’s at MM’s?, Point 72 vs Blackstone