Hi,
I've just received multiple buy-side offers, and one of them is a pod at Millennium on the US Eastcoast. I'm kind of mulling over the options here and would really appreciate some candid feedback that would help me to make a decision.
I'm a little cautious about firms like MLP because of the well-known reputations of high turnover and apparently cutthroat culture. Wondering if anyone who's knowledgeable about MLP can share some frank/realistic views on MLP?
For some context, I'm looking for a place that I can steadily grow, take on more trading/PnL responsibilities, a reasonable degree of security. As for work life balance, I lean quite heavily toward work, but I prefer that by my own choosing as opposed to being pressured to do so because I have to. My goal is to become a PM within 3 to 5 years. I know MLP is great for the resume, but then again, so is having some PNL responsibilities and gathering a successful PNL track record, which I see as slightly more attainable in the other offers I have from smaller / less branded shops.
Any thoughts would be greatly appreciated!
Disclosure- I don't work at a pod shop but I have done a lot of research across various HFs as I try to break in.
MLP will offer you what you want from a career perspective - pod shops are the best path to building a track record and getting PNL quickly in the entire industry if you are able to perform because of the investment style + incentives + tracking of performance for everyone + ability to get a carve out relatively quickly if you perform well. MLP being good for resumes is less about branding and more about having a track record + responsibility relatively quickly (and being transferable to other firms+ formulaic payout for your work).
I can't speak to the smaller firms you mentioned without more details obviously, but why do you believe that it may offer a better path towards that?
I think the more important question is what type of investment style do you like and where do you think you honestly thrive. If market neutral + strict risk parameter + knowing / trading only 50 names very closely seems like something you would do well in, I would pursue it. You will learn a tremendous amount about market expectations and what moves stocks in the short term as well as portfolio management and using good judgement when it comes to deploying risk. If you have other goals or don't want to be in that environment, I would not pursue that.
The biggest questions are 1) what type of work you enjoy the most 2) where will you thrive the most 3) what your eventual goals are. HFs all have different processes and investment styles so nailing the differences between those is most important. The cutthroat stuff and turnover is there (as a result of the structure) but anxiety over performance is everywhere in the industry. I am a firm believer in being honest with what you enjoy the most + thrive at, and looking for a place to maximize that, rather than fitting a square peg in a round hole for branding / to build a resume for an eventual goal. Success will come eventually if you enjoy what you do and can be great at it, so focus on that fit over everything else.
Thank you for such detailed take. This is really helpful.
I'm just a little wary of the notorious reputation that MMs like Millennium has about letting people go. Obviously, I don't intend on being a bad performer, but I've not worked in pods before, so I'm keen to take into considerations any stats on what the turnover is like / how common people are let go.
Also safe to say that if you are an analyst, the PM under whom you work is more important than the shop/platform itself? I've heard cautions from people that if you don't have a good PM, your life could be miserable. Could be true anywhere, but more specifically at a place like MLP?
Any other feedbacks would be greatly appreciated. Others have any feedback would be appreciated as well!
Again this is just from what I have read + heard. That reputation about MLP is true for all the pod shops because they all have risk limits and if a PM blows through them or fails to generate returns they will be fired. If an analyst cant contribute, they are let go for the same reasons because the PM doesn't have the time or money to turn it around.
Yes your PM is everything over the specific firm. The PM will dictate your work life balance, culture, exposure, responsibility, learning, opportunity for advancement, compensation (until you get sleeve/formula), etc. Doesn't really matter where you are. The only difference between pod shops is on the margin when it comes to risk limits and how long they give you before cutting you, and payouts (and that is also probably not that different anyways). For the most part, your PM sets everything that is important and then there are some smaller differences after that (like titles, what it takes to run a sleeve, etc.). If your PM underperforms and is a bad leader it will be bad, no matter at MLP or baly or citadel.
One caveat I have heard is that at point 72 they are supposed to be a bit kinder to analysts under a PM who underperforms and will try to find you a new home rather than kick you immediately, but I am sure it depends on lots of factors.
Offer at MLP doesn’t mean anything unless you know the PM you’ll be working for. He alone will determine your MLP experience.
Maybe he does well, grows AUM, gives you a sleeve after mentoring you for a few years and you take your track record elsewhere for a bigger book.
Maybe he doesn’t do well, and he gets fired in 6 months. MLP will give you 2 months to recruit internally (at least as of 2020, not sure how they’ve changed since then) with other PMs.
So really really diligence your PM and compare him to your other offers.
MLP has created this odd titular structure now - because there were/are a lot of less experienced people who want the title PM, they basically created a structure akin to Citadel’s PM/Analyst/Associate structure but titled it Senior PM / Portfolio Manager / analyst.
I know a lot of people at mlp with the title portfolio manager who are not actually capable of being portfolio managers and who do not actually perform the function of being a portfolio manager. But they feel good about themselves and get to tell people they’re PMs. And then when they get fired, they have trouble finding jobs because they think they should get a pm job elsewhere and the world tells them that they’re not pm material. Then they go back to the sell side (where they came from) and lament how they went from beings PM at mlp to a lowly desk analyst on the sell side sending out blast emails to clients.
You MIGHT be able to get an arrangement like that in a handful of years but no one with 5 years of experience has seen enough to be ready to be a portfolio manager. The last cycle was essentially 11-13 years long (depending on what you consider 2020/COVID), which means anyone who started 2009 or later hadn’t seen more than one type of market and had never managed through a cycle.
I’m saying this not to discourage you, but rather to encourage you to have realistic expectations.
**And perhaps most importantly also because you only get one shot at being a PM. If it goes poorly (because of bad luck, poor market conditions or bad decisions), the game is over for you. Do you really think you’ll be ready to take that shot 3-5 years in?
what do people with PM titles do then?
Not sure I agree. There are enough people say at citadel that do analyst in 2-3 years and then become PM.
did they have 5-10 years of investing experience before being an analyst?
that I could buy. But not people with 2-3 years of investing experience.
Let’s also be clear, you may have the title of PM, but it’s not actually clear that Ken is letting you actually trade for the fund. No one has any idea whose ideas actually hit the fund versus whose trades are all on paper.
… what, no. No one simply does 2-3 years as an analyst at Citadel then becomes a pm. I know a few folks currently and previously at Citadel (admittedly mostly quant devs and quant researchers). They’re very bright folks and I talk about their plans sometimes with them. Wrt becoming a pm, Citadel is great if your on a good team, young, don’t get cut, then you can go market yourself to a multi manager (millennium, Schonfeld, etc) as one way to become a pm, jumping diagonally from Citadel. No one, and I mean no one, works there for 2-3 years then becomes a pm internally…. That’s a flat out lie and wildly naive
The Senior PM title is part of an initiative to be able to manage more PMs as the firm grows. At Citadel, you have heads of Surveyor, Ashler, GE etc. to manage groups of PMs, but that structure doesn't really exist at MLP. Thus Senior PM / PM / Senior Analyst / Analyst etc. as well at MLP.
There are PMs at MLP with mainly sell-side experience that have been blown out and for obvious reasons they're not PM material. This phenomenon is probably more of a reflection of the senior PM's hiring judgement but also the entrepreneurial culture at MLP.
As far as I know, though some funds title inflate with "PM", there's no one at MLP with a PM title that doesn't actually perform the function of being a PM. Part of MLP's culture / structure is commerciality - if you have a PM title, it means you have a deal with someone for discretion to manage some amount of risk with likely some formulaic payout, ie you manage your business within a larger group. Because people strike their own deals, there is a diversity of talent / team structures (some very large, 30+ heads, comprised of many PMs).
Experience or seeing more cycles or whatever for experience sake doesn't necessarily make you a better or worse PM. There are cases of very young guys (late twenties) at Citadel / MLP who started small and are now running very big books / teams because they have tight processes. Yes experience helps but it's not the end all be all, but hard work and talent are prerequisites.
You don't only get one shot at being a PM. There are plenty of guys who have blown up repeatedly and spin a story about why it wasn't their fault. At a certain point it's someone's marketing ability that gets them back in the game or not. Yes, if you are a new PM and blow up immediately, it may be more difficult vs. if you have a track.
Finally, to OP's question, MLP is a well-run, well-resourced firm, with an insane investor base and fee structure. For what OP is looking for, it seems like a good fit. There's a ton of growth. Day-to-day culture depends on your pod. If you're printing, there's really no better place to do it.
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We must know different people at MLP then. Because I know plenty of people who have the PM title, who we all know aren’t really PMs. Not saying that’s all of them, but it’s a lot.
Let me ask you this - if you work for a Senior Pm who runs the sleeve (with whatever name you’ve slapped on it), then you’re not the final decision maker. You may have delegated authority but it’s not your final say. How does that make you a PM?
I think you’re misunderstanding my point. There are bad investors who have been around for 20 years and seen many cycles. There are great investors who have been around for 8-10 years and only seen a bull market with zero rates. But experience absolutely correlates with being able to make money across all kinds of environments.
If your first job as a PM doesn’t go well, you don’t often get another great shot. If you’ve succeeded for a while and then blow up, you get more chances. Just my opinion.
Can you elaborate more on the "one shot" thing. That I think is the part I'm most concerned with before really pushing towards being in that seat. From your background it looks as if you've been a PM at at least 2 funds. What does it take to get dinged as a PM and still live on and be successful managing risk & capital - do you need at least a couple years of good track record/success before the bad spell? or do you need a good, rationale explanation as to why the book failed from factors outside of PM competence (good trade, sound thesis, good risk profile, within the mandate & parameters but bad luck)? Just wondering how it works or if the game for PM's is largely to just get one blowout $10-20MM comp year before blowing up and going to the beach.
HFPM bumping since you've mentioned you got fired from a PM seat once upon a time, would love to hear how you were able to reposition into your dream seat. or just general insight from people you know that have blown up their books and gotten second chances, aside from having 10+ good years and one terrible year.
You hash tagged #riskarbitrage. Is one of the groups a risk arb group at mlp? Lot of long and painful backstory on that strategy at MLP.
Could you explain at least briefly if you don't mind?
Also interested. Thought low vol, high sharpe strategies is a main driver of returns over there.
yeah, it is predominantly arb I believe. Can you in a broad sense share some of these long and painful backstories? There seems to be many of such pods at MM shops including MLP. Love to get a real take of what it's like behind the scenes. I think often times the instances and cautionary tales provide relevant consideration for people who would be otherwise less informed about how to make better choices. Thank you!
How far back do you want to go? 2008? Early 2010s? 2014? There was a gap until 2017-2018 so nothing to say during those years. 2020? 2021? 2022?
Hi, I don’t have any suggestion, I just want to say congratulations, I saw your first post here from 2012 with no experience and now you can work al Millenium, keep going!
lol guy's been on the grind
Do you enjoy interaction with a large team and feeling like you're apart of broader org? People more knowledgeable about them might be able to speak to this but Millennium is known to silo its employees (intentionally, to reduce sleeve correlations) and culture is pretty mercenary. I heard this recently and not my take: "Morale is lower at most platforms in recent months and PMs treated like very expensive widgets subject to tight drawdown rules/mechanical PM decisions".
As recommended in another response, your PM will likely dictate your experience there. As part of your underwriting process, I'd take a look at how much they have moved around, what performance has been like (especially recently), and how long of a leash he has... but the fact they're adding to his sleeve is a good sign.
Right now, other MMs are growing quickly and poaching talent from the huge places so there's always a chance your PM takes a better offer. That's a risk at most places though.
Millennium is an amazing product charging insane fees and they seem to keep improving.
Ask the East53 guys who all got canned after Twitter didn't close......but then it did......
The few friends I know that have gone through there all left over some dispute over promised bonus, but I’m sure all top funds are just as sneaky and cut throat.
Do you have any more specifics here how they got screwed ? Seems bad for business overall if they get that reputation.
One of my friends left for that exact reason. Another analyst on the team had a bad year and that loss was netted against his bonus rather than the PM eating a big chunk of the loss (like some would). PM took home 7 figures. The PM then told him there's potential to make $1 million+ the next year but my my friend knew he's full of shit and resigned.
I think the negative reputation goes to the PM more so than the firm, since analyst bonus is ultimately the PM's decision. I got a call from MLP biz dev for an interview with that exact PM a few months later and I straight up told them that he's known to rip off analysts and there's no way I'm interested. Even BD said they'd heard that, so the rep gets around.
There are plenty of excellent PMs at MLP that pay fairly. If one of them was hiring, I'd at least take the call.
How much money can you make from each opportunity?
I spoke to a PM who worked there and is now a PM at a similar fund. He disliked the culture, particularly the siloed aspect of it. In fact the culture is so siloed that PM's with similarly themed portfolios are not even allowed to sit together.
From my interactions/interviews with and friends at Millenium, it’s basically just like a FoF in terms of each PM/sleeve is kinda like its own investing firm / hedge fund. MLP does the back office and funding, while each PM and team is just focused on making money. If you can make money, great, then they will hand you some Capital and allow you to earn some of the fees your investments generate for the firm. If you can’t make money or you start to potentially lose money, they’ll just cut you (maybe somewhat “slowly” but you won’t really have much interest from them it seems in keeping you employed by their firm as far as I can tell). Same goes for the other MM shops but millenium may be unique in its more of an individualistic / eat what you kill culture. Other places tend to like to bring people together more and have more of a “one team” approach seemingly to generate returns. This is on a relative basis as all of those pod shops are basically eat what you kill. Millenium just may have more of a distributed / less in touch together workforce from a PM/investing team perspective. From the little that I know, millenium is more of just like a back office platform for people who want to make money trading stocks or whatever. Good luck.
All seem like really good points. Not sure if I follow that the role would effectively be a back office one though
Maybe I miswrote above. The investment professionals from my understanding are not so back office in terms of earnings potentials and the like, but millenium itself (the corporate side) is more of a back office just supporting those investment teams. If a person works on an investment team, they are basically like their own business and their employer/millenium takes care of that investment teams “back office” from my understanding
This is a long text to describe a MM HF business model.
What did you end up doing?
The only thing I could add here is that MLP tends to be one of the pods that does not internally promote to PM. They're a bit more scrappy and poach PMs from other pods and/or senior analysts with enough of a track record. Very seldom do you see a guy make the Citadel-like run from associate --> analyst --> PM, or even just analyst --> PM. This varies by fund and structure, frankly boils down to the team more anything but broadly speaking my outside understanding looking in was that MLP was probably the pod least to promote internally to PM. This might impact your goals of being a PM within 3-5 years should you want a "place you can steadily grow."
That all said, becoming a PM in that short of a time frame likely needs additional context. What's your background? Have you spent much time on the buy-side already?
People have already called this out so just reiterating - the PM you work under matters most in any buy-side public equities decision. That man/woman will dictate your entire life and wherewithal as well as your longevity, so choose wisely.
As for the debate on "time it takes to become a PM" or good vs. bad investors across cycles, I tend to agree that the better investors have lived and survived over the course of market cycles. If you look at the all-time greats (Druck, Soros, Tepper, arguably Paulson, etc), the recurring theme is that all of these guys managed to perform over an extended period of time. To the Coleman / Sundheim debate, those guys were heralded for years as strong investors and the second the cycle ended they're shamed. I don't know enough about either to have a real good conclusion, but my instinct tells me that if you are long/short and are down > 30% in a market down 20%, you likely don't know how to manage risk very well.
The "one shot" PM thing also boils entirely down to marketing/networking. L/S HF is a small world and most people know eachother ESPECIALLY at pods so it can often look like musical chairs even when PMs do blow out. That said consistent underperformance/blow-outs won't be rewarded with open arms at (insert other pod here). The rest of the PM/analyst argument is semantics and every fund is drastically different in how they shape teams and who manages risk.
Can you elaborate more on how can you find out whether the PM is any good?
I can only imagine in the lines of looking at employment histories if they jump around; is it more effective in trying to get feedback from their previous colleagues?
I have seen various personalities around in this industry, but I also do recognise that colleague feedback can be misleadingly subjective at times? Cheers
Jumping around typically means either they're great and got poached for high $ signing bonus or were crappy and have been fired a bunch, so tough to make an assumption on either. I'd guess that it TYPICALLY means the latter but can't say for sure as I don't know.
If you have absolutely 0 connections at any of these funds it may be difficult to gather info on a prospective employer (PM) and their track record. Often times either other colleagues of theirs won't know or won't want to share.
Crazy thought here: how about asking the PM for his performance numbers during the interview process?
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