What are the top SMs to work for today?
Background is 2+2 and currently at a top MF PE role. Looking to switch to a SM HF.
I’m interested in SM vs MM because I think longer term outlook, less betting quarters, more thematic is a better fit for my skill set - not looking to get into that debate, but have a bunch of close friends at MM funds and it’s not what I want to do.
Until recently, I would’ve thought that the traditional “top tiger cubs” were the best place to land (tiger, Lone Pine, etc) - but commentary on here is very negative about these, and I do worry about ending up at a bloated organization without a ladder to the senior levels (which is part of why I’m leaving PE). At the same time, I’m somewhere now where comp is good and things are very stable, so I also don’t want to go somewhere that is super risky
What are the top SM names today that are the right mix of large and reputable but still have room to grow and haven’t gotten beaten up the last few years? Are funds like tiger / D1 back at their HWM from 2021 and back to the green? Am very lucky that my background seems to be a good fit for a lot of places and feel like I’ve had a lot of traction when I talk to recruiters, but want to make sure I’m taking the right step here and focused on the right names. Thanks!
As said many times here, the SMs worth working at (again, if you truly want to spend a career writing previews and doing checks for 4 positions) are the ones you haven’t heard of/are not commonly spoken about.
There are a handful of $2-5bn funds with brilliant senior guys who have done very well because the CIOs of those funds have partnership models and don’t treat analysts like a $1.5m a year fixed cost the same way that the overly institutional large tiger cubs do. The best SMs are not the ones you think.
Any names?
I think you know
It is very simple to just name a few names. Darsana, Route One, Palestra, XN are examples. Pershing as well but good luck.
XN? Are you serious? Can’t believe the shit I read on this site
Yo then name SMs then if ur gonna talk shit. Like everyone of these “Best SM” threads is just ppl listing and then other says the firm is shit.
"Man I believe pigs fly too but just believe me even though I can't point to a single pig that can fly."
Lol
I would disregard this person's commentary altogether. He/she is clearly a high school or undergrad freshman who doesn't actually work in the industry. The contrast is very stark -- people can transparently name several PMs of MM pods but can't even state the firm name of a single SM that supposedly has great economics. SRS is an actual example of where you can get paid.
Not that person, but have you ever sat in back to back mgmt meetings with XN Palestra Darsana analysts? You work in PE so no. Therefore you don't know them - the analysts I've met at these funds are mediocre and just the typical SM outcome. You're just naming funds that you THINK fit the "2-5bn lean great economics profile" but you don't know the first 2 things about them and have never in interacted with them
I don't know Route one so not going to comment.
What is your definition of a good analyst? If it's to cut alt data for a small beat to MM pod expectations against your construction of a sandbagged CFO guide I would hardly characterize that as investing much less trading or gambling on copycat conviction. These funds do long term diligence and quarters are less important for sea changes unless a material thesis driver changes. That is my definition of good, not some complacent "pe approach to public markets" nonsense and certainly not point72 alt data 101. So provide actual tangible definitions instead of arguing an undefined converse.
Case closed. "These funds do long term diligence and quarters are less important for sea changes unless a material thesis driver changes." If that's your framework, I can tell you all of the funds you named blow. These are the people asking around for bogeys, over-extrapolating one bad check, pinging group chats for idea check-ins and constantly asking for new shorts, asking IR about the 2029 margin story, acting like they're differentiated after speaking with 12 VCs about some new science project + testing out the product themselves, way too qualitative, and a boatload of other things. In my experience, their biggest constraint is the scope (or lack thereof) of their coverage universe. These are the "missing the forest from the trees" guys. By the way, you have the correct starting framework (thesis-driven > data-point guy), but you start with the long term diligence as foundational work and and then layer on other aspects of your process. You're totally wrong to assume long term diligence is something that few people do - it's the easiest aspect of everyone's process. It's tablestakes. Yes, believe it or not, there are analysts at Exodus who understand the long term drivers of a business. And yes, there is an analyst at Tiger that is a very short-term thinker. Think about how dumb it sounds saying that only single managers are able to think out longer than 24 months. I have things that I've owned for 2 years and know better than all the page 1 holders. You're wrong to put every single team at a platform in the data-point trader box, and you're equally wrong to place every tiger cub in the longer term box. What do you say to the handful of teams at platforms and select SMs that are all over the long-term, medium-term, and near-term debates? You think they don't exist?
At the end of the day, your job is to help your PM populate the book with 20-40 ideas that will work over the next 6-18 months (not 1-3 months, not 3-5 years), and to eventually be in the top percentile of folks w/in your coverage. The same goes regardless of single manager, pod, L/O. Just be a money maker. That's all. The best advice I can give you is interview at many different kinds of firms (single manager, pods, L/O). Some of the best long term thinkers I know in this industry are the senior/long-standing PMs at pods. Find the style that best suits you, yes, but more importantly, find the PM that will teach you how to become a money maker. I don't think getting a job at XN will teach you how to become a moneymaker. If you want to write book-reports on stocks and do academic-like research, then maybe that's the right idea.
I would focus much more on that instead of trying to create a list of the top single managers to work on today...
A couple of observations as to why what all of what you said is contradictory and myopic when you claim pods can be misconstrued as databoxes and SMs GARP book memo writers but somehow arbitrarily conclude these SM funds are inferior.
The key issues of scope and being too qualitative: I'm not talking about crossover VCs. Clearly I'm talking about real HF analysts. That entitles quantifying drivers, revisions based on news flow, incorporating data cuts to narrate why path of numbers change in the quarter, and thesis tracking to confirmatory or disproved. This also isn't RenTech or rocket science. Everyone fulfills the table stakes because it is not algebraic topology. But the difference is that for many of these pods the table stakes is the entire process. Data, short term trading. Not much beyond that. Missing the forest for the trees.
It is far more challenging to research the 12 VC reports and ask the right 2029 margin question that drives the 2Q 2025 margin reaccel than ask about seasonality or conservatism in the guide relative to QTD credit card data. I'm not talking about reading 12 reports. I'm talking about the asking right questions. Unfortunately most people dismiss any analyst as the dumb LO asking about 2032 product TAM expansion which completely misses the point. You are gauging the range of error for second derivative over NTM, not the qualitative TAM for 5 years out. Likewise, the 50 page book reports are the table stakes to understand the longer term story, not stuck in VC land. That's why I think lu miss the point.
Long term diligence is a superior and far more challenging way to generate returns. It is easy to know the numbers and the trees. It is difficult to guess at what the narrative is 6+ months down the line. That's what science projects and testing it yourself are for. If you had just played APP for one 30% beat and raise, you would have missed the post earnings drift that led to a subsequent triple.
SMs have received terrible reputation relative to your pods rep because they did not run zero beta and delta net through 2022, but apart from that the good ones have outperformed index while running low nets... effectively generating a lot more alpha under replicable processes and scalable AUMs levels than pod #500 claiming to understand long term theses but really no different than investing off of quarterly credit card data. This makes the difference between sizing 1% long because you think the next sales comp could miss on tough comps and willing to size 3% into a quarterly miss that doesn't change the potential to re-rate anytime over the next 6 months like an APP or NVDA.
You still have not discussed what it is that is lacking in process by the SM HFs I listed, and that is because there is no difference.
What's wrong with XN?
del
Route One is also not it for a LT career.
These funds all blow
Palestra is okay, the rest just no.
fwiw, I have chatted with former employees at darsana & xn when I was on the market
darsana: real solid, deep research and great pay. work life balance not horrible.
xn: supposedly a real nice work life balance if thats your thing -- but would stay far away from if you are career motivated / want to actually invest and get paid very well for it. main guy can be very, very tough to deal with so theres been lots of churn.
can't comment on the others. you can reach out to formers yourself rather than arguing and saying every fund sucks ha
personally, i've been impressed with the single managers who made money in 2022 (i.e. know how to short sell) such as gladstone, slate path, junto etc.
Do analysts at these $2-5bn funds have the opportunity to make 8-figures if they kill it?
No
Bump
probably some never before heard of fund that isn't a grand-grand-grand-cub. something in the couple hundred mm aum range, just launched. founder strong track record but more importantly someone you can hear talk about investment philosophy and truly buy into it. and therefore an organization you can grow with over the next 10+ years
hard to know this so next best option would be to do a few years at the funds mentioned in thread already while you build up ability to truly differentiate these opportunities, but not stay too long, that you get stuck as a career SM fixed cost analyst
Can you pls elaborate why specifically in "couple hundred mm AUM" range? so they have the flexibility to short more alpha-oriented stocks?
nah nothing scientific, just so there's room to grow. Usually sub billion funds want to on board someone at the junior level early. by the time you get to a billion could be 3-4 juniors
Thread has happened quite a few times already... and I understand the frustration from younger folks who want a list of names, only for a college kid to mention a Tiger grand grand cub founded by a guy with a punchy pedigree but apparently has a shit process (and they don't realize the firm was founded with the sole purpose of that guy to get crazy rich as fast as possible before the jig is up), and then the other posters to say "the good ones are if you know you know!"
But the reality is these places are small - this isn't like undergrad recruiting with analyst classes and you get to decide between 2-3 offers. Some of these shops have like 7-8 IPs maybe... and a lot that are like 3-4...
So can you really make a list and just target those funds? What good is this list? The hiring is few and far between, and is heavily network driven at times. My sense is you have to network heavily and then diligence heavily. Be in the right spot at the right time with preparation. You are going to get only a few shots on goal at a few funds, and its not going to be "help me decide Pershing vs. TCI" with a WSO post.
Take most SM interviews you can get, then in the process you can ask about the things you know that matter. Have a perspective on the market fit for the strategy you are interviewing for. Ask about process. Ask about compensation philosophy longer term (when the time is right obvs). Ask about LP make up.
This is the right answer.
I would also say that the average analyst is a lot older at these SMs vs the pods, so it decreases the odds that people posting on a website like this would know them.
I think the problem is that younger guys like me are more than happy to network to get our foot in the door (that's how we got our current gigs), and we have usually have connections in the industry that can help us diligence specific funds, but it's difficult to diligence and network with funds we don't know exist. It just feels like we're locked out from the best jobs in the industry because we're looking in from the outside.
You’re not that guy pal we don’t want you
I work at one of these funds. 3-8 IPs, all older folks, and we are scaled in size. Our returns are great, sr. analyst comp is truly uncapped into the 8 figures, and while I think we have a decent rep, it’s not like the big funds like Tiger or Viking and most people haven’t heard of us. I stumbled into this job by pure random chance, and would not have ever heard of the fund otherwise before I entered the industry. And we hire once in a blue moon.
This key issue PE AN1 is pointing out is very true in my opinion. I come from a very traditional top IB and/or PE path and I know the HF seats my peers salivated over. They were not good places to be. I think more people know this today luckily, and I often get kids asking me what to do. And while I can suggest them funds, I can’t go on WSO and suggest funds on here because most of these funds explicitly don’t want to be talked about and it’s very easy for someone to figure you out in an industry this small.
So whenever I give advice, I tell people not to go into HFs. If you’re on the edge, it’s just not for you. And 10-20 years ago when I came into the industry it was different and it was easier for people on the edge to come in and make good money by just being average. Today, it’s different. Your choices in SM world are limited. LPs know the charade and the game is up. These funds are all black boxes. You don’t know which fund is good and which fund has a solid process and what sector team in what fund is good and what Sr. Analyst who runs what industry coverage is just a lucky idiot. You only find these things out by working at these places or talking to very honest people firsthand.
Probably one of the more helpful and honest posts I've seen in awhile. How do you view the SM/LO/MM world evolving? Seems like index funds for the long-term and pods for the short-term with SM/LO getting squeezed.
This is such a stupid thread and gets posted every single month. Junior analysts need to learn how to become BETTER analysts, and to spend less time thinking about the path to HF.
How does one become a better analyst?
Make more money
There is nothing to preclude someone from being a better analyst if one wants to find the best job to work at. Especially if that job has mentorship and training to make you the better analyst even faster.
Mane, Scopus, Holocene?
No, no, and no
Any reason? Holocene especially well regarded on this forum
del
How abt those scaled long-biased value/distressed shops?
.
How did you find these man?
They are not that good for economics and really only if you want to do special situations or credit. HG Vora, Knighthead, Redwood, SRS are value-based.
How do you guys find so many opportunities to interview for? I have been trying to position myself as a sector specialist in L/S cross capital structure investing and I’m having a hard time finding the right opportunities.
Are you guys generalists or just interview for all the headhunters reach outs?
In London, TCI (Chris Hohn)
Bump
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