Startup hedge fund to MM?
Did two years in IB, then jumped to a PM with a good track record at 2 MMs who was just starting his own fund (~$150M AUM) as one of his two analysts. It seemed like a good opportunity at the time, but there are quite a few things about the setup that aren’t ideal anymore. I took a risk and it didn't pay off. Looking to make the move to an MM now. I know this isn't a common path, but any advice for me? Has anyone made a similar transition?
Based on the most helpful WSO content, transitioning from a startup hedge fund to a multi-manager (MM) is definitely possible, though it comes with its own set of challenges. Here’s what you need to know and focus on:
Leverage Your Experience: Highlight the skills you’ve gained at the startup fund, especially if you’ve been involved in structuring trades, building models, or developing investment theses. MMs value analysts who can hit the ground running with a strong understanding of risk management and portfolio construction.
Address the Risk-Taking Narrative: Acknowledge the risk you took by joining a startup fund and frame it as a learning experience. MMs appreciate candidates who are willing to take calculated risks but also demonstrate resilience and adaptability when things don’t go as planned.
Expand Your Coverage Universe: One common struggle for new PMs or analysts at MMs is having too narrow a coverage universe. If you’re aiming for an MM, ensure you can demonstrate knowledge of at least 150 names, even if you’ve only actively covered 50. This breadth is critical for building a robust book.
Network Strategically: Use your IB and hedge fund experience to connect with recruiters and professionals at MMs. Highlight your willingness to adapt to the MM style, which often involves running market-neutral strategies and thriving in a high-pressure, short-term-focused environment.
Prepare for the MM Culture: MMs are known for their grind and intense focus on performance. Be ready to show that you can handle the stress, work long hours, and thrive in a fast-paced environment. Demonstrating high energy and a passion for the adrenaline of earnings season can set you apart.
Be Honest About the Transition: While some believe it’s easy to return to an analyst role after a failed PM stint, this isn’t always the case. Be prepared to explain why you’re making the move and how your experience aligns with the MM’s needs. Recruiters and hiring managers will respect a well-thought-out narrative.
Target the Right Platforms: Not all MMs are created equal. Some, like Citadel or Millennium, offer better infrastructure and support for analysts transitioning from smaller setups. Research the platforms that align with your skills and career goals.
For more insights, you can explore this thread: https://www.wallstreetoasis.com/forum/hedge-fund/leaving-a-single-manag…</a">Leaving a single manager to start a book at a platform. It discusses the challenges and opportunities of moving to an MM, including the importance of having a broad coverage universe and the risks involved.
Good luck with your transition!
Sources: Is the Multi Manager HF Experience Worth It?, Leaving a single manager to start a book at a platform, Leaving a single manager to start a book at a platform, https://www.wallstreetoasis.com/forum/hedge-fund/the-hedge-fund-experience-good-bad-ugly?customgpt=1, Questions about Single Manager vs Multi Manager HFs
Why didn’t it pay off? Are they shutting down or are returns just meh?
Not shutting down. Returns have been ok, definitely not great. I have started seriously questioning the PM's process though and I want out asap.
My assumption is that you’re feeding ideas and offering your insights in terms of portfolio construction. Is the PM flat out rejecting them? Or is it a scenario where your job looked like a few items you’re very interested in on paper, but has turned into having to solve a variety of issues well outside the scope your desk?
I made the switch to a smaller firm a couple years ago, mostly positive, but the coverage of my responsibilities has grown outside of my role. It’s due to natural attrition in the back office and lack of quality candidates for the open positions. The impact on is felt across the team. Also, it has taken the parts I enjoy about my job and made them minimal. I bring this up because it is demoralizing. And when demoralization appears it has the potential to be cancerous for both the employee and the firm.
The role's grown a lot, which I've actually enjoyed. The real issue is more with the PM's 'investment process' - feels like the book has started to have way too many names we don’t actually cover or have any real expertise in, including him. Did some pre-mortem work, and surprise, those are the ones dragging down performance. There's more to it, but I'll leave it at that.
Show him?
I know a several people that made similar jumps...all depends on your experience at current fund. If the mandate and investment strategy (risk, sector focus, research process, etc) are similar to the MMs, you won't have any issues
sorry I accidentally posted my reply as a separate comment but would appreciate any advice on first steps
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