Thoughts on Anomaly, Palestra, Steadfast?
Came across a few tiger cubs / grand tiger cubs…Does anyone have any thoughts on Anomaly, Palestra, and Steadfast?
Anomaly is probably one of the better known funds given the publicity associated with Ben Jacobs leaving Viking and starting his own shop.
Palestra looks like they have a very elite / pedigreed group of IPs but have not heard much about them otherwise
Steadfast is one of the bigger tiger cubs. Their team looks solid but looks to by hiring more junior folks vs Anomaly and Palestra
These are above average L/S SMs but not anything amazing. Kind of just under-resourced, mid-sized SMs facing the same issues as all SMs, where the analysts do "okay" research, nothing outstanding. No one is pinging analysts there for opinions on stuff/to chat on names. Probably pretty decent seats for a junior
I have a good friend that left Anomaly recently, Palestra is solid, Steadfast is solid. No one cares that the analysts come from pedigreed/elite backgrounds...I'm not quite sure why you all conflate pedigreed/elite backgrounds with amazing HF seats. Quite the delta between the 2.
How many places are getting pinged? These are all very good funds.
No they’re not lol. If you work in L/S, you’ll know all of these are just average guys
Never worked there but heard anomaly culture can be tough
Not a knock against SMs, I’m at a SM. But I always thought Steadfast was some holy grail / black box of investing given the perceived strength of Analyst backgrounds, and then I met an analyst there who was “meh” at best, not bad just nothing special. You quickly learn that the majority of people fall in the average bucket, no matter where they are. Post-college, it really takes a minute to realize that names on resumes don’t really mean that much at the end of the day.
This💯
I'm curious now, what qualities makes you consider someone to be exceptional in investing vs being 'meh'
Great, variant, creative ideas that are actionable
Steadfast has some pretty sharp guys, but ok guys too. As with any other top cubs.
Um debatable
Wow. “This stock can either go up or go down”
Yeah spot on
Some of these comments are moronic. In what world is $9B tiger cub under resourced? Because some 22 year old MM associate says so?
.
I used to work in an office next to Palestra’s. One day while walking to the elevator, of one their guys zipped down the hall with an electric scooter and nearly hit me, so suffice it to say, I do not like that place
If I see one more tiger grand cub post I’m going to kill myself
hey do you know of any hidden tiger great grand cubs that are crushing it!? My thinking is that everyone already knows of tiger global obviously, but people may not think about the great great grand cubs, so my competition to join one of these firms with 7 IPs each that only hire every 3 years will be much higher (especially once we all talk about them on this very public forum)!! Also all they do is invest in tech along the S curve and the job security is so much higher than anywhere else, so there is a good chance I can just join, chat with some management teams, avoid the insane MM modeling / paying attention to quarters, and ride the wave to 1mn-3mn after a couple years.
(do it... i dare you...)
Wp
Why are people so skeptical of $3m as a analyst w/few years of xp (post earlier)? Feel those are not that uncommon either at big SM or good MM team in good year esp when there are snr analysts at MMs making $5-10
Because 99% SM PMs would rather the firm produce worse returns than pay $3m to an analyst
This💯
Anchor we need to get dinner. You get it
Just to add another datapoint, I know an SM analyst who was paid 7-8 bucks with 5 total YOE. It’s not unheard of. You just need to have a good year + fund had a good year + pm is willing to pay you (these three things rarely coincide). Unlike the poster below, I don’t think this happens the most at the largest funds like Tiger Global. Instead, it’s the midsized funds with 3-7 people managing a few $bn
Sometimes there is a misconception that being along for the ride at firms that generate decent profits per employee will result in big pay days. People are greedy, and they don't just throw out money for the sake of it. At SMs, there is the additional problem that performance and decision making attribution is not so cut and dry.
How much of the return profile in a given year is an analyst directly responsible for? The CIO/head PM tends to make most of the trading decisions, either unilaterally or through some sort of IC. Then there is the fact that if you run with +ve net, how much was actually stock picking and how much was factor/beta?
If you work at a SM focused on consumer and tech, and you helped do some work on a cyber security stock, and it went up 38% this year, great! But what if the sector was up 42% and the market was up 27%? What if the idea came from the CIOs screen? How much did you contribute? What if other stocks in the fund didn't do so well and your fund was basically in-line with market?
Compensation alignment at SMs is difficult. People will generally pay you only as much as needed to keep you from jumping, but the good ones have a more thoughtful approach re: incentivizing people to stick around and growing the intellectual capitl (from what I read).
At MMs, its easier to justify that PnL was generated from stock picking, but more importantly, it tends to be a bit easier to delineate performance contribution. Also the payout structure is much more straight forward (teams get a % of PnL; you may have a sleeve with a % payout; etc.). Make no mistake though, MM analysts are not getting big paydays unless there is a more direct link to their contribution (sleeves, or perhaps a monster year and it is easy to track what ideas/trades came from that analyst, and/or there is risk of them wanting to spin out).
Think about it the other way. You grinded for 2-3 decades, started with $1bn raise, and now have $4bn in AUM. You have a partner who shares in the GP economics and has been your second in command. Then you have your 2-3 sector heads / senior analysts. Now you have some snot nosed analyst from JPM IB and APO PE. Year 1 they spent mostly learning your style, and year 2 they did some ok work but year 3 they are really getting after it and stars have aligned. They did some modeling work and channel checks on that cyber security name. But maybe you directed him to explore the sector, and then you traded the name throughout the year. Maybe the sector head really fine tuned the idea. Why are you giving this person $3mn? How integral were they to the returns? How replaceable are they? You can definitely earn that much, but you need to kill it and it needs to be obvious how you contributed and the founder needs to care about you staying.
Perhaps at tiger global when they had +$100bn and they were up like 40% in a year, and they only had like 4-6 of the mid level analysts - sure, tossing $1mn to some more mid level people isn't that crazy. Typically, it will be a fight for every $.
Copying and pasting a comment on SM comp that is absolutely correct (from another thread):
"Starting with the 2-4% of pnl. Yes this sounds like a small amount, but it never ends up being this much. Midpoint implies CIO saying in his head "should I really pay this person 15% (3% / total 20% incentive fee) of the economics that accrue to the firm that are attributable to this person?". The answer is always no. Remember greed. Ok, so lower number. Then CIO asks "who should I actually pay for performance? Sector head or analyst?". The answer is usually "a mix, they can share the upside, but I'll skew upside to SH" even if you did all the work. The problem is with the word allocation: at a SM, you don't get a sleeve or allocation with comp terms set in a contract. It's not contractual. And your so-called "allocation" is simply the GMV of your positions, which are attributable to you and your PM/sector head. It's not like you manage those positions or run a book with just those (what 3-5 MAX?) positions, trade around them manage factor exp etc. No, you simply advise your PM on whether your 5 theses are in-tact or not; he manages the positions with positions from other analysts to create a book and run his allocation, not yours. So a better way to say this is "the average good SM analyst might have sourced/oversee a few hundred M of positions".
Then the other issue is around alpha, which, in light of MM o/p and LP scrutiny on return quality, CIO approach to comp has evolved. "Should I pay this person some % of their TOTAL pnl $s, or some % of their alpha $s". Answer is always alpha $s. All of the beta pnl accrues to those who control the GP. Why should I pay you 3% of your pnl if half of it is covar? So mathematically, this ends up looking like: you oversee $500M of positions. If you have a good year, the GMV of your 5 positions is up 20%. Maybe half of that (at best. Probably more like a quarter...) is alpha. So $25-$50M of pnl. OK analyst, I'll pay you 2-4% on that. There is your $1-2M of upside SM comp...not HSD millions or 8 figures simply because WE as a firm had a great year. Most have the mindset "I set up this fund such that I control the economics. You work for me and the majority of your performance accrues to me. I will pay you on your contribution, not my/senior people contribution on gross exp/macro/calls on your sector & positions"
What's the flipside at the top platforms? I get an actual sleeve of $400-600M+ (there are analysts who have >$1B books), I call the shots, basically every $ of pnl I generate is alpha (yes, it's harder, but you're paid like this anyway at a SM) so there is no debate around beta, and then per my contract/agreement with PM, I get 5-10% of my pnl, not 2-4%, because MMs have a different fee structure.
This is how the value prop for LPs --> ability to pass everything through --> analyst comp comes full circle. "
Great thread. A few industry guys with real xp laying out how analyst comp is set and rationalized at the mgmt lvl at SMs
We need to get rid of the recent grad fan fiction that has historically polluted the forum creating unrealistic expectations. It is getting better
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