Verition
Anybody have any thoughts on Verition? Quality of PMs, recent performance, comp… Where does it rank amongst the non-big 3/4 platforms?
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Based on the most helpful WSO content, Verition has shown solid performance recently, with an 8.8% return in its multistrategy approach as per year-end performance numbers. While it may not be in the same league as the "big 3/4" platforms like Citadel, Millennium, or Point72 in terms of prestige or scale, it has been recognized for its consistent returns and quality of strategies.
Regarding compensation, specific details for Verition aren't explicitly listed, but it would likely be competitive with other mid-tier multi-manager platforms, especially given its performance. The quality of PMs and teams at Verition would depend on individual pods, as is typical in multi-manager setups. Strong PMs with uncorrelated P&L streams are highly valued across platforms, and Verition's ability to deliver respectable returns suggests a solid lineup of talent.
If you're considering Verition, it could be a strong choice among non-big 3/4 platforms, particularly if you're aligned with their strategies and culture.
Sources: Citadel vs. Millennium vs. Point72 vs. Other Multi-Managers, Performance of the best PM’s at MM’s?, So you want to be a Quant?, Why is William Blair (TMT) so highly ranked on this site?, Q&A - Analyst at $1.5B Endowment Fund
They have grown a bunch since the pandemic
The joke is it’s a place for people that have blown out elsewhere - founders last fund was amaranth / head of macro was head of markets at nomura during archegos
My sense is they are a bit under indexed to equities vs more macro / fixed income strategies - but they hired a guy from mlp to be head of l/s equity so maybe room for growth
I have heard they run new pms pretty tight risk wise / seams like a place that has high turnover of newer pms ( but that’s the case everywhere)
I think performance has been solid (look at the numbers) but has lagged the c / mlp / p72s ( probably due to less equity exposure)
Most people I have come across from there generally pretty sharp
do you have any color on how the resources and support they provide to long/short teams fare against the large MMs?
Sorry I know verition in other products - macro / fi
Infrastructure is almost non-existence. Most people run strategies that does not require a lot of infrascture or hire people that build infra
I find them exciting. Been quietly building something interesting. Not trying to be Citadel/Millennium, but they've found their own differentiation.
Now... they're not on level with C/M/B/P etc. and they're smart enough to know that. Makes little sense for them trying to recruit the MLP Sr PM making $15m PNL @ high PoR.
So their pitch is basically: Less crowded platform (you won't be the 11th TMT PM) + faster path to running risk for the right people + strong culture and support through drawdowns + decent infrastructure that's improving with scale. So I think that's lingo for their infrastructure/resources are decent but not yet top-tier, but they're betting they can close the gap enough to compete, leverage smaller team size for better access, identify future stars before they're obvious and win on culture and opportunity vs pure resources.
When you've done this for a few years you realize two things:
1) There's limited evidence of displacing the top 3/4 MM platforms despite multiple pop ups of challengers and spin-off teams emerging. The big are getting bigger. The delta is increasing to the rest.
2) Does point 1 even matter to you? It shouldn't... Ranking platforms is a useless exercise & rarely, if ever, correlates to why you're successful in the first place. End of the day, your P&L won't care if it's Verition or Citadel on your business card. It's not the "Citadel tech" or the MLP "resources" that'll make you good at this job. What matters is having the right risk model (they differ) for your style of monetizing your coverage, and key decision makers having your back through cycles.
What makes people jealous? Evidence of longevity, scale, firm backing and resources to do what you want to do.
So for Verition as an emerging or scaling player in l/s equities it wouldn't make sense trying to "out-infrastructure" the top pod shops. They won't win that battle. They just need to do their own thing and hope that their angle where they're betting on identifying and developing talent earlier (younger PMs), giving them what they need to succeed, with less alpha cannibalization between teams trading the same ticker & direction, and giving people the time & space to grow - hoping that in a few years will yield a profitable business build-out in equities.
At least that's the pitch. We'll know the answer in a few years...
Any sense on what/ how the new head of equities is going to change
"the big are getting bigger" - do you have a view on if they can keep getting bigger while maintaining performance?
Ya'll guess is as good as mine... Consolidation is a growing theme in the alt space. Question is if L/S strategy capacity constraints equates to swooping up smaller l/s managers, or if strategy diversification in to uncorrelated strategies (e.g. private credit) makes more sense.
Trad's are buying Alt capabilities. Alts are partnering with Trads & wirehouses on content distribution. Everyone's targeting the wealth channel to smoothen the fundraising cycle (not an issue for the large MM's today anyway). I envisage the big guys will become scaled multi-asset gatherers with a long tail of smaller specialists who don't compete on the same premise.
If I was to "game it out" 15+ yrs down the line I think we'd see a blurring of public vs private → the former will see corporates temporary tap cap markets for liquidity through "quasi listings" without intra-Q/reporting vol, the latter becomes more liquid and tradable through emerging alternative venues → skill/differentiation could likely only come from deep sector domain expertise regardless of of asset class → "smart" passive likey drives further fee compression (so scale and lock ups key for the biz model) → reason to exist / barriers for smaller shops becomes more difficult as the market matures in to steady state.
But who tf knows... 15 years ago I didn't think fundamental L/S equities would have a second renaissance. I for one hadn't envisaged the industrialization of alpha from the multi manager platforms.
still very helpful color. tnx
Why did you refer to top MLP senior Pm as someone making $15m of PnL?
Maybe you meant $15m bonus lol
Yeah correct. Not trading PNL, but net bonus post all PNL items (incl. analyst & associate discretionary + sub payments, etc). Majority of that would need to be vested anyway so not like you'd see that money hitting your payroll.
$15m is a very low p&l target?
hes most likely talkin takehome/yr
Be careful what you say to them. I’ve known a few people that have gone through a long series of interviews (senior members first, and then the juniors in the late round stages), and with each round they dig and dig deeper into the details of how the strategy works. Only to be rejected at the end for bogus reasons (ie strategy of $50m PNL is not large/scalable enough for them, overhead cost concerns about needing to hire 2 juniors to support the strategy implementation). A lot of people think they are just trying to steal strategies, and aren’t always serious about hiring. I don’t know what’s the whole story, just sharing feedback I’ve heard from other PMs.
helpful color
Interesting, why the overhead for junior analysts? Doesn't that normally come from pod PNL anyway?
(a) bullshit or (b) risk that they'll have to foot the bill if you don't make money?
But probably more (a), given 2x analyst base is cheaper than 3P data?
One of the very few platforms that hires guys from the sellside who haven’t been risk takers and guys who were analysts before, somewhat remarkable for our industry. Smallish books, at least what I have been told.
theoretically I'd back that trade. give 20 academic analyst types small books for 1-2years. Bank prop desks are handcuffed if domestic US anyway. 4 will prob be managing a yard each 5 years out.
They've put up great numbers and are building a great franchise.
do u have this for any of the other multi strats? citadel millennium de shaw p72 etc
This is dope ty
There was also this here. Says 11.6%.
Is the 1st RenTech at 22.7% '24 return the Medallion fund?
No these are their higher capacity institutional funds
Nope, that’s their institutional fund that’s open to external investors.
Pretty good in macro/credit (especially outside US)
Sub-par in equities but they know that so its underallocated relative to other large MMs
Between Baly, ExodusPoint and Verition, what would you chose?
Ignoring the quality of the pm, just focusing on infra, quality of surrounding talents, brand name.
In that order... Should be consensus
How are they doing so far this year?
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