Would you make this move?
Hi,
I am currently struggling with a decision to move from the sell-side to a platform HF. I have an offer incoming (been told by management that offer with concrete details incoming soon) but given I have gotten info on roughly what the terms may be over the course of my discussions with them, I was hoping those rough details can be sufficient to generate a high level picture. Obviously, there are various personal factors that would impact such a decision but I am looking for outside opinions from people currently at a HF primarily from a comp perspective and career risk-reward.
I am currently a macro trader at a BB and have been doing this for 5 or so years now. I sit in a seat with relatively low franchise value and primarily make money from principal risk that I put on. In that regard, things have been going pretty well for me and my PNL has been good as well, dare I say so myself (10-15mm first full year, couple of years 20-30mm, one year 30-50mm, one year 50-100mm largely in that order but have kept ranges and may have mixed the order up here and there in the interest of anonymity). I have also been well looked after in my current role from a comp perspective (1m to 4m USD in total each year for the last few years; very consistently correlated with PNL).
This is the first time I have taken interest from a HF seriously and based on rough guidance, it seems like they will be offering me in the ball park of 150-250mm AUM, 5%/10% DD limits and 10-15% payout. At this point, whether they will offer a signing bonus is unclear and I'm not sure what terms they will offer to buy me out of my current deferred stock.
Obviously, it is impossible for me to say how I will go if I make the move but if I assume I can make 20-30mm PNL, the payout does not seem to be meaningfully more than what I can potentially make in a really good year in my current role. I understand that the upside is more and the AUM can grow with the track record, but I don't want to fall victim to selection bias as I have generally only heard of buyside success stories.
All else equal, would you guys see this is a good opportunity relative to my current seat? Are there any things to watch out for/clarify before making a decision?
Appreciate the advice in advance.
Couple things;
Think you need to a take step back and understand how much value you have brought to the bank versus the opportunity the last 3 years. But also need to understand that strategy did very well cause we went from "extreme cycle" to "another extreme cycle". 2023 is going to be a much more grind year, so if you nail all hats off to you. But in 2023 you are really going to see how much the bank likes you.
Your skillset will not match what needs to move towards an MD role and over time you will see them trying to get you change it somewhat. This is the main reason a lot of people leave for the buyside after a run like.
Fund offer; too low that is a basic offer for a "good SS trader" with experience not someone with your resume. So either this fund does not fully believe your strategy. Somewhere closer to 500aum. Costs/Investments in staff upfront they are willing to give you and so on, potential to change your strategy if market conditions change and so on. I see no love here its a basic offer.