Analyst under incompetent PM
Long story short, I’ve been at a multistrat pod for a while now and pretty much since the beginning have been running the entire book, which has been profitable. This means all of the idea generation, trading, risk management etc. My PM has done functionally nothing (and definitely nothing related to PnL generation) except for interface with management.
I understand that this is not a completely unique situation, although it might be a little extreme. I’m at the point where I’m fed up and would like to do something and ideally would like to stay at the firm. I think I have lots of evidence to back up my claims if I were to go to someone internally. Has anyone here had or heard of a similar situation? How did it resolve?
why do you want to stay at the firm? the easiest path is to go straight to a pm seat at a diff firm, if you do have the evidence to back up what you do right now.
Because I'm already at one of the blue chip platforms and leaving would require me to sit out a garden leave. I like the culture and the people at my current shop and would rather avoid the transaction costs of leaving and rejoining a different firm if possible
For a platform, a PM is >>> analyst. Unfortunately, the only way forward is to find something externally. Generally speaking, your PM is going to make it hard for you to find another spot internally.
Unfortunately, your only option may be to lateral to a different firm. If you are at any of the standard MM firms (Millenium, Balyasney, Tudor, Point72, etc...) then you can pretty easily jump to another as a solo PM (market yourself as a sub-PM who is getting screwed on comp...which seems to be your exact situation, regardless of you "analyst title"). Yes, you will have to sit out your non-compete (12-24 months i'm guessing). Get you ducks lined up in a row...save money so you can live comfortably...invest your own personal funds during your non-compete in a retail brokerage account, assuming you are allowed to do that...maybe use a family members brokerage account...nobody will know.
This is actually pretty common...and the non-compete is in place or this exact reason....so do a cost/benefit timeline and determine your breakeven point before you interview at competing MM firms. Also, before you leave your current firm, but after you interview at other firms...talk to internal company management (the biz dev people) and describe your situation (you are called an analyst, but you have in fact been running the show as an independant sub-PM, even if your boss does not call you that, and you would like to leave your current PM and be given your own sleave of $$ to run as a solo PM as your own pod). If your non-compete is with your PM, then there may be nothing they can do...but if your non-compete is with the "firm" then you may have the ability to leave your PM, and run your own pod as a solo PM. You only want to have these conversations when you have an offer from a competitor (which you will keep a secret and not mention unless you feel necessary as a negotiating tactic)....part negotiating tactic...part as a backup if they just decide to fire you out of spite since you are looking to leave.
wait if those are MM firms then what in the world are MF?
in this case, MM = multi-manager (hedge funds setup as a portfolio of independant pods)....in IB land, MM = mid market
In the context of hedge funds, MM means multi-manager not middle market.
MM is multi manager, SM is single manager
Tell your PM you’re very interested in PM track and tell him you’re ready. Network with management and ask things about what they look for in a PM (this makes you come off as a candidate). Do not complain, always “butter up” your experience, but tell your PM and management that you’re ready for something bigger/more risk/basically spell out a PM’s job
at multi-manager pod funds like Millenium, there is no "PM track"...you either need to go over your PMs head to management / biz dev, or you need to lateral....and if you really want to be a PM at your current fund, then you can lateral back after a couple years (but from a financial perspective...this makes no sense...maybe if you can get better economics). Some PMs are altruistic and will "promote" their analyst to sub-PM and give them the economics...other PMs only care about themselves, and see the analyst as replacable...in which case, lateral away ASAP.
From the funds perspective, there are 2 schools of thought.
1) yes, this "analyst / sub-PM" has proved themselves and should be promoted to PM to run their own pod
2) promoting analysts away from a PM could be seen as predatory to future incoming PMs, who don't want to risk losing their team members
So, unless OP is a rockstar generating 30-40% returns with minimal risk, #2 is probably in front of mind vs #1...but each fund will have their own perspective on this.
I meant in the sense that he is ready to engage as a PM -- i.e. hint that he's open to being a sub-PM while networking with management to ID if there is a PM seat he can actually take. The goal of reaching out to the existing PM is that you'd ideally still want his good grace. So by pretending to want to continue to work with him, while reaching out to management, you can then present the opportunity and get your PM to back you to management.
Otherwise, I'd just go straight to management. MMs are always looking for new talent.
Probably nothing you can do in a MM. Within each pod, the PM is the king. The pod exists only because the management believes in the PM. Try to find a seat elsewhere.
This can go south for you very quickly. And for what? So you don't have to rebuild your models at another firm? Is your PM going to let you take them with you even if you spin off to your own pod in the same firm?
Lot of risk, little reward (unless there's something we are missing besides your current firm's reputation and the garden leave, which are not good reasons anyway).
Go get a PM or senior analyst offer somewhere else first. Only then do you breathe a word of this to your current firm's BD (they are not on your side). When you break the news, they will either let you go on your way, or counter with better terms. Your PM will be out of the picture and unable to fuck you at this point because you're having the convo with BD as a PM, not a schmuck analyst.
Things don't work this way. Analysts simply can't talk to BD or to management to demand a promotion or better terms. It always goes through the PM. If a MM is known for undercutting PMs in favor of analysts, soon it will struggle to attract any more good PMs because a PM hates to see the fund "betraying" him. Put yourself in a PMs shoes, you would feel the same way.
The fund's management doesn't give a rat's ass whether the PM does "real work" or not. They care whether he makes money. If things are the way OP describes them, management might just interpret the PM knows how to "identify talent" and build a good team, as unfair as that may sound. Good news is competitors would love to poach you. Just drop that requirement of staying at the same shop and move to a different MM.. most MMs are relatively interchangeable.
Yep gotta move - don't see how you can go over the PM's head - but you can demand terms to make it work.
Agree with the rest. Either you hope the PM leaves and you stay behind to get a book or you move elsewhere as no fund will screw over their own PM even if you’re the second coming of Warren Buffett.
You can, however, try to get his blessing to get a carve / sub-book and if you genuinely do most of the work he’ll probably cave in knowing that if he loses you it’s a massive inconvenience at best and a loss of future PnL at worst.
To be clear, being a PM at a MM is far more of being a People Manager (PM) than portfolio manager. The analysts pick stocks. the PM ensures compliance with risk guidelines and communicates up and down the chain.
what you’re describing sounds like basically every MM team I know.
I would somewhat disagree here.... the PM that I worked under was the exact opposite where he had a clearly defined process and the people under him needed to operate under that process in a systematic way... he was/is also highly successful
I'm not saying you're wrong because I don't have exposure to many different PM's but there are differences in how they operate
The better question is how/why PM's like the ones you are describing are that prominent any way... in an efficient market shouldn't good analysts be able to leave? there are lots of funds trying to be next big platforms (Schonfeld, ExodusPoint, etc.)
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