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.


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.


What is the best way to break into Melvin Capital? IB or ER? Is a major in STEM necessary because of the tech focus?


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.


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


Lol this comment was spot on - all of you idiot monkeys giving sht for a very prescient comment


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 


beat up by retail traders and had to take a emergency bailout to stay afloat... oof


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.

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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. 


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.  


Or Loeb / Icahn / Siritz buying HLF right after Ackman's short presentation. Think Loeb only held on for a few days


According to this they avoided today's move…

  • Melvin Capital closed out its short position in GameStop on Tuesday afternoon after taking a huge loss, the hedge fund’s manager told CNBC.
  • CNBC could not confirm the amount of losses the firm took on the short position. Citadel and Point72 have infused close to $3 billion into Melvin Capital to shore up its finances.
  • Melvin manager Gabe Plotkin told Andrew Ross Sorkin that speculation about a bankruptcy filing is false.

If they were indeed lying when they broadcasted that they were out of the stock, will there be any repercussions from regulators?