Working in alpha capture/central risk book
Does anyone have any information on working in the internal alpha capture/central risk book at one of the big MMs (p72/BAM/Citadel/Millennium etc.).
I know some of the basic responsibilities like netting trades, liquidating desks that blow up, copying good PMs, doing portfolio construction in a more efficient manner given a bunch of trades from different pods.
My question is more along the lines of how good of a role is this? I imagine the pnl attributed to these teams is probably huge, but the payouts aren't going to be anywhere near a pod PMs payout. Id the experience valuable enough to jump to a pod running risk after a while? Is the skillset one picks up from these roles valuable in being able to run risk down the line? The role im considering is more macro oriented - so any color from a more macro lens would be very helpful.
@surge-protector had a really good breakdown of what they do in this post: www.wallstreetoasis.com/forum/hedge-fund/mm-center-book#comment-3517618
Agreed it is a good post and I've read it before. Doesn't really answer my question about the quality of the role though.
Non compete + silos make it hard to jump to a PM role from this directly, but possible with a transition. I’ve hired this kind of profile multiple times before and typically a pain to get out and requires some ramp. In my experience engineering is better here but research is worse than an average pod.
The benefit of the job is usually more stable seat and “easier” to generate positive performance with the inputs you’re given, but capped upside and generally a terminal role. If you want to go into the PM path shouldn’t be your first choice.
I work in CRB trading at BB, and I've seen many of my teammates exit to this IAC/CRB for Cit, MLP, P72 and still remaining good relationship with them...this area is significantly pigeonholed, and agree with the above that it is much easier to generate profit...actually some of the CRBs in the shops you mentioned, last yr made ton of $$, only to have very small payouts to their pocket. We're more like engineers, and microstructure researcher rather than alpha researchers to put it in a simple way. Obviously the engineering aspect of the research is very good and you'd be able to learn much about the optimization, pf management, TCA..etc but if that's not what you are interested I wouldn't advise it. Well there are very few people in the street who went to risk trading role in multi strat hedge funds, for a PM path, but that's not the norm here.
Quality wise I think there isn't a simple "good or bad" answer for this. Just depends on what you want to do.
Thanks for the comment - very helpful.
Maybe a more fund specific question here but through my network I've heard of actual PMs sitting in central risk teams (or at least people with the PM job title). Do you know this to be the case? If so are they ever actually running risk? For instance, I can imagine a scenario where the fund wants to lever up on a trade from a pod but that PM may not be comfortable taking on that risk, in that case could a CRB/IAC "PM" step up and identify that opportunity to take that risk on some sort of trades like this?
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