To move or not?
Really appreciate any wisdom I can gather from the community on my current career situation.
Context:
I've been a Fixed Income Portfolio Manager (G10 Rates and FX) for a real-money fund manager for almost 14 years. During that time the company was acquired by a bigger global asset manager (not a tier 1 name like Blackrock or PIMCO) and the original founders slowly left which saw our own Funds Under Management shrink by 50%. To cut a long story short, pay has been cut back by 20% over the years, culture non-existent, toxic people, no winning mentality, FUM has plateaued and struggling to expand. A saving grace is my work-life balance is amazing, I get paid around 500k (250k base + 250k bonus...unlikely to increase without FUM increase), I get to trade whatever I want in G10 Rates and FX to try to make some 'alpha' (but no incentive to do this as your bonus is mostly capped). Its a easy gig where I feel I am coasting and any personal growth is a consequence of my own motivations to improve.
Given the above circumstances, naturally I found myself miserable and looking to see if the grass is greener on the other side. A successful global macro pod at a tier 1 HF (one of the big names mentioned on this board often) is opening a slot for an associate PM. The main guy is somewhat well regarded in the firm, has a team of 7 already but I know he rotates through his associate PMs if their not successful. Their offering me to run a $100mio book, 14% PnL after the first 1mil, 250k salary, pay out my deferred (which is tiny, c.100k or so), trade what I like and 2 years to make it happen (provided I don't draw down more than 5%). The objective is to 5m-10m in first year and 10-15m in second year. I've made around 5m-10m the last 3 years or so but more out of boredom (not because I was incentivized to do it).
What do people think of this? Would you take the chance? I will add I have a young family (wife, 2 kids under 5) but financially stable for 2 years worth of expenses. What other questions should I be asking? Will I put myself in a better position from a career perspective doing this or not, esp if it didn't work out?
Keen to hear from people.
Be honest with yourself.. was that 5-10mm truly out of boredom or luck? Can you replicate that on a larger book down the line? Were your drawdowns ever to the point where your risk can potentially get cut?
If you’re truly a wiz and can make 5-10%/yr out of boredom, go for the job. You make more on just 3mm of pnl there than you do with 5-10mm of pnl at your current job. And if you are incentivized to work harder, why not do that for a couple years (assuming you can replicate it with a larger book while avoiding drawdowns) and then go back to coasting at a real money fund.
Nobody knows the PM there so who knows what sort of influence he might have on your WLB. But you will personally feel more stressed etc given your job is directly on the line (but of course if you’re honest about making 5-10% out of boredom, why are you worried)
If I were in your spot, given what you said, I would take that job, be a bit more incentivized to do better so I can quit the rat race earlier vs coast on 500k/yr (which is a great amount to coast on). But only you can decide for youself ob what you prioritize more.. a shot at a higher pay or stick with stability.
Thanks for the reply and your comments. Sorry let me clarify what I meant by "boredom" not to insult anyone. Firstly it was not easy, it was over 20-30 tactical style trades. The motivation to pursue this was driven from boredom in other aspects of my job, which some may relate too if they ever worked for real money. I worked hard to achieve those results, but there was little to no stress because my job was never 'on the line'.
Helpful. Have you dealt with big drawdowns or have you always been on the lucky side? How have you dealt with drawdowns in general? How would you feel being at risk of having half your capital cut. I hear you on how you have felt so far at the current job so it’ll be a change.
Given your network, would the door back to your old job/similar job be open if you were to fail at the new job? You do have a unique oppty to prove yourself and it could be very fruitful if it does work. I’d say bet on yourself and try it for a year. See how it goes and then decide. Diligence how the PM works with the sub PMs etc thoroughly though and that might give you a better sense of the WLB within your control.
I have had some big drawdowns, mostly not being disciplined with stops. But again, on the real money side its different because even if you lose money you still get paid to sit at the table. I'm fine with drawdowns as I view it as an expense of trading however I feel there would be more on the line in a HF seat...which in itself may mean more psychological burden.
I don't know if I could get my old seat back, probably not as they would need to find someone to backfill my role.
I know this PM has a sub-PM/associate program where people go through cycles. One guy was there for 2 years and neither lost money nor made and was cut. Another guy was there 4 years and only made 4 mil. He currently has 3 other sub-PMs.
I guess I am concerned about being dropped because I know I probably won't find another role (like my current one) that pays as well for the great WLB. Further how would it look on my CV, of being at a top HF and later being cut? Would it make me worse off?
I’ve seen associate PMs get cut really fast and land somewhere else of similar caliber or better. I’ve also seen some that can’t land another seat. It might depend on your age and your previous track.
On another note, why do you think these other sub PMs aren’t succeeding?
What about a gig back into asset management?
Not sure why the other sub-PMs arent succeeding, I know sizing up is a common challenge especially when your running discretionary strategies. Sometimes people get lured by the big names and dont appreciate how much effort it takes
So i will add one more detail here which i pureposely left out to see if this changes peoples opinions What if your current firm makes you a head of macro research for the quant solutions team for the whole firm by sheer chance at the same you have this HF offer. How lucrative is such a position esp given how hot the quant space is getting? Could i go back to the HF seat at a later date even if im not exclusively a PM anymore but I am responsible for building out strategies that get leveraged by systematic teams
It doesn't really matter how hot the quant space is getting, those strategies you work with need to outperform benchmarks on a consistent basis to attract inflows. Do you think that will happen given what you know about the teams that manage them?
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