Thoughts on Melvin Capital
There doesn't seem to be a lot of information on them. Any insights into their interview process? How would you compare an offer from Melvin Capital to Point72 or Citadel GE? What would be the pay discrepancy at a junior level?
Any thoughts on working there (culture, stress, hours worked, etc.)? Gabe Plotkin described the firm as very human-intensive, requiring a lot out of analysts (link). Do juniors essentially just build out models or do they contribute to the analysis and idea generation too?
Any information would be greatly appreciated.
It pays a ton. Juniors just built out models though.
Know a few people that work there. They have been one of the best performing funds on the street over the past few years and pay is top notch.
Analysts there get paid over $1MM in a good year (years where they have returend 40%+). Varies widely depending on the year's performance.
That said, no work/life balance. expect to work seven days a week for a long time. Tons of people have burnt out from working there.
damn $1MM+ comp during a 40%+ year seems kinda low at a $10bn+ fund approaching $500mm AUM per IP. Melvin’s generating around ~$800mm in performance fees in that case and has only 25 IPs. seems stingy to not give senior analysts closer to 8 figures in that case BUT if there’s nowhere else better for the analysts to go for comp then market is market and there’s no need for Gabe to pay nearly as much as he could. life must be good at the top with that equity resid.
This is for an analyst with 1-2 years of buyside experience. The senior analysts of course get paid more.
Gabe takes 90%+ of that.
Why would anyone pay an analyst eight figures, just because there’s a huge bonus pool? Do you tip your cab driver $80 and pay your cleaning lady $500 an hour, just because you had a great year? In the HF game, you get paid to add value. If you don’t add value in a great year, you’ll get paid well and that’s about it. But generally speaking, you dont get paid $10 million or more just for showing up.
Wait how much do you think a senior analyst (3-4+ years w/ Gabe) would make in a 40% year?
Pay obscenely well but as said, the hours are brutal. My understanding is they have an official 6 day work week. Don't confuse banking hours with hedge fund hours either - banking hours are mostly spent fucking around, hedge fund hours are spent doing real work - just means the mental toll is much worse.
The Melvin analysts are super intensive model monkeys. They cover a large universe of names and have detailed models for all of them that they constantly update. There's obviously great exposure to top investors, but the reason the hours suck (early on) is the amount of modeling.
Are the models significantly more detailed than sellside models? Like is there a big effort in the amount of guesswork/granularity in estimating KPIs and detailed financial items that aren’t given by the company in order to more accurately model projections?
What is the best way to break into Melvin Capital? IB or ER? Is a major in STEM necessary because of the tech focus?
19yr-old kid reads about some place blindly paying people $1mm/yr. 19-yr old kid asks the world how to get a ticket into such place. Cute. It's never that easy, son.
lmao jesus christ
Go to LinkedIn and look at the profiles of the young analysts
Buy GME then you can "break" Melvin Capital
What exactly are they doing that's so unique that's generating these outsized returns? I guess my question is, what is their strategy?
You won’t find it on here.
This aged well pizz.
Plotkin has a stellar reputation and the team is small relative to AUM. I don't see how a seat at any of the multi-manager platforms would really be comparable.
What exactly are they doing that's so unique that's generating these outsized returns?
seem to just run a really tight process
My guess (and this is completely a shot in the dark) is that they are running a concentrated book with high vol. Usually streaks like these don't end well, see Ackman, Bill
Honestly would be shocked if he's paying his analysts 1mm+. Hedge fund guys are greedy bastards and they will pay you just enough to stay in your current seat. No one on the street is going to pay one of his recent grad analysts 1mm to leave, so he's probably paying them in the mid 6 figures and pocketing the majority of the fees.
It's not super concentrated, but it's high exposure to tech equities. $1M is the number I heard from current analyst, but don't know him well enough to say he wasn't inflating the number.
Analyst meaning junior employee out of banking or PE? If so that is a crazy number.
It is a firm that went from $1bn to $10bn+ aum over the course of a cycle with top bracket returns, a very heavy work schedule, and low turnover
If you look at the combination of those variables, that comp figure is not surprising (especially considering the founder has become a billionaire over this past cycle). If the top guy is making well into 9 figures and is focused on training his team really well (which they do) then you need to pay junior employees higher than the ~$600k other firms will throw at them
By the way, they are much more of a consumer firm than a tech firm
Streak seems to be having a rough patch
Lol this comment was spot on - all of you idiot monkeys giving sht for a very prescient comment
Pershing was up over 85% YTD and PSCM definitely still beats the market since inception, so it doesn't seem like a fair comparison.
Jesus this comment was incredibly spot on, far in advance too
Headhunter?
DSP
I’ve spoken to this women Kate Shahrestani who runs Athena Search who had an in with them as well.
Kate Shahrestani at AthenaSearch as well
$$$$
Damn didn’t realize these guys paid so well
makes me feel so poor
fwiw I heard they do good alt data work
Anyone know if they make any private investments?
They're up 47% through November so who cares if you're just a model monkey, you're a well-paid model monkey.
Unfortunate that they dropped the ball big time with the GameStop short
Pay definitely going to start going down if Ken Griffin and Stevie are going to be taking chunk of bonus pool
I don't follow, Melvin gets fees on the new aum?
ANy Melvin Capital Analysts here? How was today in the office?
beat up by retail traders and had to take a emergency bailout to stay afloat... oof
You think some of them are going to quit now and hop to another shop? Down 30% at the start of year = 11 more months of grinding 6 day work weeks for probably not much bonus.
Answer is yes for a typical firm and that is how 30% can sink an entire fund in short order. But in this case I suspect they have some solutions in place (hence the 2.7bn funding)
They have $200mm in management fee whether they make or lose money. You dont think thats enough to pay a what, 10-person investment team?
Gabe doesn't need the money and will obviously pay people even out of his own pocket if needed so he can keep the business running. Everyone chill.
I have a friend who works there right now. He told me that they might start letting some analysts go. My friend said he's safe tho.
Any idea who's getting canned? The analysts and the PMs? A lot of the analysts, or few?
The psychology underpinning your schadenfreude is fascinating
I'm gonna venture a guess...that the analyst responsible for GME is gonna get canned.
As more details come out this is quickly becoming one of the most interesting and entertaining fund blowup of all time. Simply amazing. Should be a movie.
It actually is amazing. Who would've ever predicted this? Not me. It's fascinating
And remember, they were down 30 percent on Friday, when the stock was 65; it's now at 115, so who knows how much more they lost. Then again, I wonder if they hedged their short by going long on some Friday afternoon or Monday.
But they've probably already covered no?
Yeah, would be interested to know. But as a confident trader, do you really think Plotkin -- when he saw the stock appreciate 50-100% in one day -- is gonna cover, or instead is going to think, "Well, it was up a crazy amount today... so it's gonna be down a crazy amount tomorrow and I don't wanna miss that move." I would think the latter.
Surprised he let it get this out of hand. BTW, for those thinking it was just retail -- do you really think fund analysts don't read social media and don't add to the froth strategically? Lots of funds were in on this. Reminds me of the London Whale.
Or Loeb / Icahn / Siritz buying HLF right after Ackman's short presentation. Think Loeb only held on for a few days
This thread aged well
According to this they avoided today's move
https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-mel…
There's no way Melvin Capital managed to exit their horrible positions without shooting GME to the stratosphere. I'm thinking they're bluffing.
If they were indeed lying when they broadcasted that they were out of the stock, will there be any repercussions from regulators?