Hi, I understand that nowadays there're more and more desks at SnT trading a 'desk book', so there's no individual book.
If someone wish to go to HFs in the future how do they build their track record?
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Building a track record when trading a "desk book" can be challenging, but there are strategies to position yourself effectively for a future hedge fund role. Based on the most helpful WSO content, here’s what you need to know:
Paper Trading and Personal PnL Records:
Even if you're trading a desk book, you can maintain a personal record of your contributions. This includes tracking your ideas, trades, and their outcomes. While it may not be an official PnL, it demonstrates your ability to generate alpha and make sound trading decisions.
Highlight Your Role in Desk Performance:
Clearly articulate your specific contributions to the desk's overall performance. For example, if you were responsible for generating trade ideas, managing risk, or executing strategies, document these achievements in detail.
Develop a Personal Investment Journal:
Keeping an investment journal can help you refine your thought process and showcase your analytical skills. Document your trade ideas, the rationale behind them, and the results. This can serve as a proxy for a track record when presenting yourself to hedge funds.
Engage in Active Networking and Recruiting:
Hedge funds often value hustle and initiative. Start reaching out to funds you’re interested in, especially smaller ones, and share quality pitches or critiques of existing positions. This can help you stand out even without a formal individual track record.
Paper PnL and Simulated Trading:
If you’re unable to trade independently, consider paper trading or simulated trading to build a record of your strategies. While not as impactful as real PnL, it still demonstrates your ability to think like a trader.
Focus on Learning and Self-Starting:
Hedge funds value self-starters who go above and beyond to learn. Use your time on the desk to absorb as much as possible about markets, strategies, and risk management. This knowledge will be invaluable when transitioning to a hedge fund.
By combining these strategies, you can effectively build a narrative and demonstrate your potential to hedge funds, even without an individual book.
Sources: How to build HF track record that is worth anything?, Q&A: ex-bank trader now running crypto hedge fund. questions?, Q&A: Non-Target School to Portfolio Manager at a Top Hedge Fund – 6 Years Out of Undergrad, Am I missing something about buyside exits?, Hedge Fund Guru Answering Inbox Questions Here. Thanks Mr. Pink Money
This was kind of my path so just take it for what you will, also I am in natural gas so could be very different.
I was scheduling/optimizing and cash trading at the time. I kept trying to generate ideas and relay them to my ‘PM’. Eventually he told me, when you want to put something in the book, let’s talk about it and maybe do it. After some time he said “don’t ask if you want to put something in the book, just do it.” He was aware of the money I made and vouched for me.
All that to say, it may be a little less clear to show value, just keep track of what you do.
but what if we start at a bank and we're talking about move to HFs - will the boss at the bank vouch for us (our track record), to leave their desk?
feeling a bit weird if this is usually the case lol
lmao absolutely they will not vouch. If you got the chops, you naturally get known in the market. Hopping from SnT usually is naturally meeting and talking with PMs in sector and market. If you have a good relationship, know you can move size, a your sales guy vouches when client asks that is usually how it goes. Putting out desk flow notes/thematic things that they read weekly and provide value is also how to start building the relationship and they'll ask sales to get you out to dinner.
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