What do heads of equities at MMs do?
This is mainly just my curiosity, but a few questions on heads of equities at pods:
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What do Phil Lee, Jeff Runfeldt (formerly), matt simon, Justin Lubell, peter santoro etc actually do? They don't run their own books I imagine; are they involved in investing / portfolio construction at all?
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My guess for how they might be involved (I'm an SM analyst looking to move to MM, this is just a guess) -- I'd imagine Surveyor CGE Ashler Millennium Baly etc all have best ideas books; are these run / overseen by the aforementioned folks? Do MMs have a best ideas book, and who runs it / how does it work?
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And then their other responsibilities are recruiting / getting new PMs and risk mgmt?
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How exactly are they able to raise so much when they spin out after having been detatched from the day to day of running a book / covering 200 stocks like their PMs do? Part of the reason I'm confused is it doesn't seem like investing / managing a book is their primary day to day responsiblity, yet SEVERAL of them have spun out in the last decade with multi bn $ launches post head of equities stint. Perhaps this is a hot take, but I'd imagine being detached from actually running a book / covering a set of names for however many years can't be great, yet they're still able to raise a lot when spinning out (where thye'd be going back to running a book vs overseeing a large unit of 30+ pods / overseeing risk framework)
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If we're being realistic, I imagine these seats (while still being an employee / non-founder) must be the most lucrative in all of finance (ex being CIO / CEO / founder or something)? Guessing they're actual partners in the GP meaning they participate in economics with Ken / Steve / Izzy? These guys must be making 9 figures right (definitely not Runnfeldt given Baly weak #s, but certainly Citadel / MLP heads)?
Interested in everyone's thoughts here. I know it doesn't really matter given none of us will be in these seats haha, but at the end of day, many of work / will work for them, and it's just fruit for thought and worth thinking about
bump this should be an interesting thread
Varies a lot by firm and strategy. In equities it’s mostly a mix between exercising and adding/shutting strategies, non stop reminding and exercising of risk limits and to some degree overseeing non investment functions. Only few heads run own sizeable books but it’s more about ideally growing the business. I think quite a few heads realize that being a good PM is far from being a Head/Chief of an asset class. It tends to be a seat that has seen quite a bit of churn, especially if growth (ultimately AuM and strats) isn’t there.
what makes good PM vs good head of asset class? Do they almost always set up their own pod shops after, or have any gone down SM route? How is this not just HR
Must be the best paid HR on earth. These guys are the most senior PMs usually just fyi
Hiring, firing and managing PMs is 90% of their job. What you call "other responsibilities" in point 3 is actually their main job.
This includes allocating capital to each PM.
So yeah, if you're launching a new MM fund, it's an extremely relevant experience.
So none of them launch SMs? How are they even incentivizied / paid / what does comp structure look like for them given they're basically HR lol
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I think that some heads of equities (at least at places i have worked) are involved with the IPO / capital markets side of things as some of the big IPO allocations can be driven by firm relationships vs individual pods
best guess on how much they’re making?
low 8 figs if the fund is doing well, low 7 figs if it’s doing just ok, out the door if its doing badly
there's no way its that low lol. has to be mid-8 or low 9 depending on how big fund is? this is a total guess, i have no idea.
the only datapoint i have is what head of equities at citadel does. apparently he just acts really excited and will literally call associates/analysts to act like a coach. tbh, i am sure this adds actual alpha.
Some prospect reading this disagrees
Most MMs that we know today created their organizational structure off BB banks when they were allowed to do prop trading and had prop desks. So vast majority of the people in “head of” roles come from that world where your main job is to grow a business and manage talent. To some people that may seem like “expensive HR” but Ken/Izzy and many of BB CEOs before them never would have the success they had without “expensive HR”.
Having met some of these guys they are super sharp, some have photographic memories, are able to see patterns and correlations super fast and connect the dots. But vast majority of the time you feel “this is coming from above, this is Ken/Izzy/Dimitry/etc speaking” which it probably is. So again different skillset and job as mentioned if “head of” was an amazing investor they would go start their own thing.
Agree with last point - therefore "head of" will be making a good salary but nothing close to what a superstar PM makes. Definitely not 9 figures - probably low 8 figures but fairly consistently. Have heard of longer contracts like 100m over 5 years and stuff like that
On the flip side, a good amount of "head of" guys were superstar PMs themselves before stepping into that seat (specifically thinking about Citadel with Matt Simon, Phil Lee, Haley, Todd Barker). I guess the main idea would be that the "head of" role might have better wlb, but then why would 2/4 of those guys leave to start their own fund? Seems like it had to have been more lucrative to take the "head of" than remain a PM (while also changing the work up to the extent that some rockstar PMs are happy and would rather just stay in their seat)
Had a phone call with one of them a couple years ago. At the time he was head of ___ capital at a MM. He said his job involved allocating capital to the PMs, mentoring them, and tracking their performance and trading habits to identify irregularities
What do the heads of equities at MMs do? Make more money than god (assuming good year) while telling 20% of their staff a year to fuck right off
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