Ricky Mewani Citadel Loss
What did this guy do to lose $50m in a market neutral context? How big was his book to start out with? In these cases, do the junior associates/analysts follow him to Baly or get repodded within Cit?
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Don’t wanna dox the guy — but I know somebody on his team is looking for other gigs. Not sure if they are playing the field or got cut.
As for how you lose $50m in a mkt neutral context…Have you seen HC over the past few months? There have been some crazy crazy moves.
He probably ran at least $1B (probably more like $2B) so at most that is 5%. Not crazy. The way reserves are set up at these places incentivizes this behavior - can’t blame him
The analysts get re podded at citadel or fired. Can’t follow him to baly
Not familiar with pod contracts / agreements, is that something typical for contracts that prevents them from moving over even if fired? Can't they wait out a garden leave / non-compete and then join at Baly?
There is no garden leave if you get fired
That's what I'd assume, so that just furthers the question I asked - what prevents analysts from then joining at Baly?
They can only go with him to Balyasny under very limited circumstances, and even then it’s not that straightforward. Often the senior ones have their own non-competes which would cause timing issues, or Baly will say they want to hire themselves or other conditions. Junior analysts may want to stay put and go to another team unless they loved the strategy and PM. Many PMs also take the chance to get new blood in so they can 1) pay them less and 2) cull the fat of the “meh” analysts who weren’t so bad as to be fired before but also not worth bringing along. There could also be non-solicit clauses at play as well.
Bottom line, teams do not move from firm to firm totally unscathed. Whether there are contractual restrictions or not, you must realize that most pods are dysfunctional in some way and there are always interpersonal dynamics or specific situations that may not have resulted in breakup prior to the PM’s move, but it is simply human nature to look for a reset and get those priorities straightened out when these changes occur.
What do you define as garden? Everyone has a non compete, if you quit they generally enforce it and if you get “let go” (fired is generally for cause) the company can still hold you for your non compete period. The big multi managers are known to be pretty vindictive
Seconding as new to the industry, why can’t Analysts jump to Bally?
It’s because of the non solicit clause everyone signs. It’s standard practice w mm firms. Usually it’s 2 years. Prevents poaching and entire teams being airlifted out to another firm if the pm moves. Usually have to argue vs the firm’s legal time to try to whittle down the time.
Not sure if he was running close to 2bn. But even in mkt/factor neutral context - losing 50m is shit but it can happen obviously. Factor / macro goes wrong way, couple idio moves. You’re done. That’s just how it goes. This guy was at citadel for 9 years. That’s fucking good. You don’t stay at a place like that if you suck. Sometimes you get unlucky - so you just go to Baly with a signing and no highwater mark because duh it’s the same job
Uh he wasn’t fired. He willingly left because why should he stay and crawl his way out of a draw where he’s not getting paid, while BAM is probably offering him a huge deal given he has tons of deferred at citadel. He has had big years and is a really thoughtful guy
why are you getting shit? sounds accurate from this article: https://www.efinancialcareers.com/news/citadel-to-balyasny-after-losing…
i've read on here that citadel books usually $2B+. assuming that's the case here, that's a 2.5% drawdown, even less if the book was bigger. shouldn't be too hard to crawl out of that, no?
2.5% is hard and often takes over a year when operating factor and market-neutral.
Which explains why it was economically rational for him to jump ship.
If 2.5% sounds like too little and somethin you make back quickly, you don't understand how pods operate.
interesting
thank you for the insight.
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