Prop economics
How do the more platform-y type of prop shops (e.g Jump, Tower, Maven) structure their payouts and compensation structure? Do they have fixed drawdown and formulaic payouts for PMs who run teams? Clearly the books are smaller than Millennium or Citadel, but the payouts are higher but how much higher
Coming from the HF side here so have no insight
depending on strategy p&l volatility, i've seen 40%
I’ve seen similar numbers. I guess my question then is how does one decide whether to go for prop vs HF, given economics are roughly in line (eg higher payout plus lower capital = lower payout higher capital)?
Are prop firms better or worse places to work versus siloed platforms?
Also thinking about general industry trends going forward. I was shocked to hear some of the revenue numbers from 2020 - CitSec printing 6bn, Jane St printing 8bn. This is more money than most hedge funds manage being made in 1 year at some of the large market makers. Even Bluecrest has been printing money since kicking out external investors. Is prop/ market making structurally a better business moving forward?
Some of the HFT multi managers have pretty good common infrastructure for HFT. The common infrastructure would be things like wireless networks but also to some extent software/hardware trading infrastructure.
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