Seeking Advice on Career Move: Execution Trader to Risk-Taking Role
I’m currently working as an execution trader at a large MF (think Vanguard, BlackRock, State Street) and have received offers for an execution trader role from two HFs:
1) Large global macro HF (think Capula, Caxton, Moore Capital) 2) MMHF (think P72, ExodusPoint, Millennium)
My ultimate goal is to transition into a risk-taking role at a hedge fund. However, without direct experience, it’s been challenging to even secure interviews for such positions. In my current role though, I do get involved in researching and designing risk-taking trading strategies, but have no PnL responsibilities.
Given my situation, do you think moving to another execution trader role at one of these HFs would bring me closer to my goal, or would it be better to stay in my current position, where I’m involved in risk-taking process? Breaking into the hedge fund industry has been an extremely challenging journey, and it took me few years to get this far. So part of me feels I should just take one of the opportunities but i also want to make a strategic decision.
Appreciate any feedback or advice!
Based on the most helpful WSO content, here are some insights and advice for your situation:
Transition to Risk-Taking Role:
Choosing Between Execution Trader Roles:
Current Role vs. New Opportunities:
Career Risk-Reward:
Networking and Mentorship:
In summary, both options have their pros and cons. If you believe the hedge fund roles offer a clear path to risk-taking responsibilities and align with your long-term goals, they could be worth considering. However, if your current role provides significant involvement in the risk-taking process and opportunities for growth, staying might also be a strategic decision. Evaluate the specific opportunities and cultures at the hedge funds to make an informed choice.
Sources: Q&A: HF Analyst @ $5bn+ Fund - Breaking In and Transition to Risk-Taking Role, Q&A: ex-bank trader now running crypto hedge fund. questions?, What career path will be the best to take if I want to land a hedge fund job?, Would you make this move?, Transitioning from IB/ER to HF Series - Part 2: Where to Interview and Behaviorals
I’d say it depends on the firm culture & strategy. From executor trader to PnL seat is a much easier sell later on if PMs in the firm also come from a trading background. As for strategy, I’d say a macro fund that relies on a mixture of macro, high level fundamental, and technical indicators to generate alpha has a much higher chance of offering a pathway from execution trader to PnL role vs a L/S Equity fund that relies on deep fundamental research for alpha (ofc not all macro funds are like this in terms of strategy. Some might be pure research).
But overall, unless you are married to a specific style of investing, I wouldn’t switch yet given the lack of guarantees vs what you currently have. Still, if you feel stagnant in your current role, it might be worth the gamble.
Thanks for the insight. Honestly did not think it would be viewed that much of a gamble.
Putting aside the risk-taking role for a moment, how do execution trader roles at these HFs compare to my current position in the industry? Are they generally considered a step up, or are they viewed similarly?
Have less insight into the execution trader aspect for HFs but I would view them about the same, maybe a slight edge to the HF execution trader. In the end, it’s all about ability to execute allocation strategy in a timely manner. Maybe dealing with more complex strategies require higher execution requirements, which one could argue HFs have more sophistication in strategy. However, execution traders at large institutions also are more well equipped in dealing with size, liquidity, and transaction costs given the large block trades (although maybe at higher tolerance levels in terms of market impact). It’s really fund dependent.
No industry experience but I'd imagine the big MM execution trading teams as a sort of very standardised position if that makes sense, one where you're part of a huge machine handling the trades for a bunch of different teams so not as clear a shot at building a relationship with a PM and eventually moving into risk taking. I feel like the macro fund would have smaller teams so maybe more of a shot at input + relationship building with a PM. Also pure feeling (have never set a foot on the floor of any of these) but I'd see the MMs as having too big of a back, mid or even non direct PnL FO for them to be heavy on internal mobility, as in, lots of others to compete with internally, not as much of a chance to stand out as an individual and not a feeling that you're one of just a few that have already passed their interview process and made it to that first role.
Just two cents from someone with zero industry experience
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