Realistic Odds of Making It as an Analyst at a Pod Shop?
I’ve been hearing a lot about the brutal survival rates at MM pod shops—stats like “most people don’t last three years” get thrown around a lot. But I wanted to break this down a bit further:
- What percentage of analysts actually fail because they’re bad analysts vs. getting cut due to PM blow-ups, strategy rotation, or broader firm dynamics?
- What are the realistic odds of being an “average” analyst vs. a good one? And how much of that is skill vs. luck?
- For those that are strong analysts, how often do they actually make the leap to PM? And how long does that usually take?
I know the common wisdom is that most analysts burn out or get washed out, but trying to get a more nuanced understanding of what really determines longevity and success at a pod shop (P/C/M, Balyasny, etc.). Would love to hear insights from those who have seen it firsthand.
Survival at MM pod shops is indeed a tough game, and the odds of making it long-term depend on a mix of factors, including skill, adaptability, and sometimes sheer luck. Here's a breakdown based on the most helpful WSO content:
Why Analysts Fail:
Odds of Being “Average” vs. “Good”:
Making the Leap to PM:
Longevity and Success Factors:
In summary, the odds of making it as an analyst at a pod shop are tough, but not impossible. Success requires a mix of skill, adaptability, and sometimes luck. For those aiming to transition to PM, it’s a long and uncertain road, often requiring a combination of stellar performance and strategic career moves.
Sources: Performance of the best PM’s at MM’s?, Life decisions...buy-side equity analyst, Longevity of Hedge fund career: how long do people last in this industry?, Demystify the LT SM / tiger cub / "PE approach" vs. MMHF / pod shops?, First time PM - Now What?
I’ll caveat that it’s extremely difficult to generalize.
Sounds like you’re trying to decide if you can make it as an analyst/PM. Trust me, these numbers mean absolutely nothing. You simply will have no sense what it’s like until you join.
Agreed —> if you’re trying to optimise for an expected outcome or even trying to apply averages on this stuff just do PE or something else. HF isn’t going to be a path to premier wealth for the vast majority of people, pretty much every single senior analyst and PM I’ve met that’s actually had tenure has responded with “meh” whenever ive asked if they’ve been worried about career vol.
I think with pods, and im still learning this as i head into my 3rd year in the industry outside of grad program, you’ve got to see it as a materially different kind of career.
You’re not going to be able to plan your life around comp trajectories or seniority and the people who do well seem to buy into the mentality of “I want to do this, I think I have a shot of proving I’m the best, let me get as many shots as I can”.
I vaguely remember seeing analyst retention figures during my graduate program, it’s much higher at my shop for people that did the graduate program than people coming in from IB/PE and I believe a large part of it is people coming from school committing to this early on.
10% of analysts make it to PM? Or you are talking direct A -> PM promotions for an analyst at citadel? would think the % of C Analysts that become PM at a big 4 MM is decently high as the starting quality is already quite high
From what I've seen its a lot closer to 10% than 50%.
To make it from analyst to PM you need to be BOTH good & lucky for 3-5 years, if not far more.
You can fail as an analyst due to EITHER average/low skill or bad luck.
Its possible to have a seat as an analyst for years without ever making those big fat bonus numbers you dream of. Many have to choose their exit when that becomes clear. How many years do you want to work stressful 60+ hour weeks, weekends in your 30s to pull in peak sub-$500K TC, possibly with clawbacks & deferrals, occasional $0 bonuses, and periodic low pay years during garden leave?
Many analysts don't make it more than 1-2 years in a pod, often doing a string of 1 year stints before exiting. Then, for many analyst is a terminal role they occupy for 10+ years. Others find alternative paths within MMHFs outside of investments teams, joining risk/centerbook/bizdev/etc type teams, return to buyside, whatever.
It's also very seasonal - if you were a successful analyst during COVID there were a lot of PM seats to be had around 2022, less so now.
Yeah for every analyst in their first year at C that was either promoted internally or hired laterally, probably 10% end up making PM at C. You need to have 3-4 good years and making cumulatively about $150m. Also you’d be surprised how “not high quality” the analysts are even at C. It’s very strange because everyone knows everything inside out but eventually you need to make money. Very different knowing your names and being able to forecast your names accurately. Unfortunately a large majority end up like that. Have seen so many people work so hard, know their shit and then get hosed. At the same time have also seen people who are “meh” but somehow have some nose for making money. Thats how chad PMs are born.
makes sense. 10% Citadel Analysts become PMs there, but assume 30-40%+ become PMs elsewhere? (big 4 or other)
The one thing I’d add to this discussion is that just making it to PM doesn’t mean you’ve “made it” either. There is a lot of churn at the PM level and only a subset are actually successful over the long term
Not OP, but it would be great if anyone of you can touch upon how an analyst's performance is measured at a shop? The most basic I can think of is how your ideas that go in to the book end up performing (while taking risk metrics into consideration) - is there more nuance to this?
Just so you know, it’s not easier to “make it” at a SM either. Let’s nit conflate the 2…
LO is obviously a much different story. But if you can’t last in MM you likely can’t last in SM so don’t waste your time and go straight to LO.
The grad program retention stats are likely suffering from selection bias. X% today come straight from the grad programs, which was 0% 10 years ago as they didn't exist. So comparing retention rates isn't apples-to-apples as the same people who stay/survive would've likely been from IB/PE 10 years ago before the insourcing talent trend began.
Whilst being a good Analyst is a prerequisite to becoming a PM, it doesn't necessarily make you a good PM. I've seen how top Analysts struggle, or are not as comfortable, as PMs. I'd even go so far as to say that some top PMs were “only” good but not stellar Analysts.
I can't prove this... but I suspect some PMs were amazing stock pickers, who now just "deal with" risk management and do it because it's the natural progression. Some are amazing risk managers who dealt with stock picking, and are comfortable sizing on other people's views. Risk managing and stock picking are somewhat mutually exclusive skill wise, depending on where your alpha comes from.
We had this amazing Analyst who killed it with a sleeve. When he "graduated" to PM he neither enjoyed nor was particularly good at running a team + scaling a book profitably at the same time. Running a 500m sleeve with 40 names is a vastly different sport from 1.5bn with 150 names where you need to team manage, run risk at scale with the risk team breathing down your neck, being comfortable delegating entry/exits and relying on someone else's view, from having been the guy who knows everything about his names. Mix that with soft skills of having to make people feel like they're part of a partnership culture in an environment where everyone's a type A personality who feel like they're underpaid and deserve more.
Agree with the comments above. This isn't a great profession from a comp trajectory & career vol perspective. The left tail of people who make little to no money is vast. Probabilities are stacked against you (even if you're good). But we do it anyway for the love of it. We're apply emotionless data driven decisions on stock picking, but don't apply the same standards to our own career choice. We all think we're "that guy". Animal spirit I guess... Some years we knock it out of the park and overextrapolate our own abilities. But it sure as hell beats adding real value to society... :)
Whilst titles differ and there's title inflation at some places, I do feel like the underlying model is slowly shifting from a clear Analyst vs. PM risk distinction to Analyst → Sub PM → Sr PM model where people are gradually building out sub-risk clusters with formal sizing & ideation tracks before taking on more formal risk at scale. Helps the platform layering the risk before providing GMV at scale. The Sr PM becomes the team builder/manager, team GMV allocator and the layer between the team and the platform reps. Basically just a SM under the platform umbrella with one size fits all risk framework for the benefit of infrastructure, not having to deal with out of pocket costs, LPs and securing capital.
This is very detailed and helpful. Thank you!!
Its pretty wild to me that so many in this industry think they're "that guy." Its pretty rare I come across people who articulate why they're process is different than the 50 other analysts in the space. Its pretty easy to delude yourself into believing you have "edge" when you don't tell anyone what your special sauce is....so no one can give you legit feedback on what is or is not special about it.
Yeah it’s difficult to articulate - have to see in action. When you go to conferences and sit in meetings - plenty of people sound smart. But it’s not correlated with their p&l. The guys with the real p&l aren’t sitting in that room for the most part
Subscribed.
The good ones don't calculate the odds of being average.
Nor the bad ones, arguably
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