Single vs. multi-managers
Hi everyone - would be great to get an update on how one would consider the opportunity at the more traditional L/S managers vs. the larger platforms. The forum has articulated well the pros/cons in the past (e.g. longer horizon and stability and the SMs vs. more transparency of PNL and faster promotion to PM at the MMs), but seems like there has been a shift of talent and capital to the MMs over the past few years. For someone looking to move to the public markets, any updates on those pros and cons and whether the relative attractiveness of career, comp, trajectory has changed between those two?
Single Manager Pros
- More job stability
- Potentially greater salary
- Longer-term investment time horizon, but depends on the firm's/PM's investment style
- Better work / life balance (of course depends on the firm)
- Less stress in general
Single Manager Cons
- Less access to sellside research
- Less pay during good years
- No brand name
Multi-Manager Pros
- Amazing access to research, management teams and conferences
- Well known brand name firm
- High payouts during good years
- Develop good relationships with execs/IR at company's you cover
- Can become a PM / manage a book very quicky if you perform well
Multi-Manager Cons
- Little job security (have a bad year and whole team can get let go)
- Market neutral model (debatable whether a con, but depends on your investment philosphy)
- Investment style becomes very repetitive
- Short term, quarterly investment style
- Very stressful, earnings seasons are brutal
Here are some more resources about multi-managers from my perspective:
- The Basics of Working at a MM HF
- Life at a MM HF
It's hard to have a "style" when you have not practitioned professionaly. You have no clue what the menu of styles are, the asset classes, nor the tools required to pursue a style. Asking a 24 year old kid to determine his style is stupid. Go work for someone you admire that has a good track record. Whether he trades long/short, buy and hold, or whatever, what matters is learning from someone good early in your career. You can then start to adjust and develop your own style.
I agree with OP that the multi-managers have become less relatively unattractive as they’ve gained assets, as alt data has grown in importance and as there has been some better talent going there. As someone who’s been at both and recently moved back to single manager, I’d pick single manager every time - the longer time horizon allows me to do deeper research, take bigger bets and I think a generalist model is more attractive and better for my career than the narrow focus required at junior levels at MMs. MMs are probably better products for the their LPs but for an analyst I like SMs and the historical reasons people prefer SMs are still largely true. Most important thing though is to be on a winning team in either model - otherwise you’re gonna have a bad time