Balyasny Asset Management
Any info on Balyasny in terms of responsibilities, culture, comp, etc? Searching for more information doesn't seem to bring up a whole lot.
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Also looking for some further info on this - please provide insight if you have it - thanks
Looks pretty solid on glassdoor - $14B AUM - long / short & global macro.
probably 3rd biggest hedge fund in chicago behind Citadel and magnetar....very strong in distressed
Thanks for the insight chaps - the AUM is ~7bn currently just to clarify. Nevertheless looks like a serious shop
legit firm.
It's a multi-strat fund. I've interviewed for a position in their macro strat last year. It's not just chicago, they have a decent NY presence as well.
@lexington55 any thoughts on their macro group? what did you think they were looking for in terms of attributes? spoke to them informally a while ago, just kindof curious your take.
@"mrmarket"
heyy, well i only saw negatives in the sense that the group was small and i felt like Balyasny created the group sort of as an afterthought (to increase AUM and bilk more fees perhaps?).
in that sense, i don't know see the place as a long-term career joint but rather a stepping stone to some other larger and more dedicated macro fund in the future (probably after a 2-3yr stint).
Balyasny has an office in SF as well; growing like crazy on the equity side after strong performance and have poached some guys from Citadel/SAC among others. Looking to hire guys in every office as of December (I had beers with a PM from BAM after a recent shared company meeting).
The Balyasny SF office last year hired one of the smartest people I know in finance. Total superstar: college valedictorian, rhodes scholar, HBS, worked at several high profile PE and HF.
$8bn Fund. 300 employees. What are your chances of getting a piece of the pie? ZERO Sure it may be a good firm, but how will they manage to keep talent if they are so restricted in their shared economics?
300?? At 20% perf fee and say 15% (quite high) return would give you 800k net revenue. That's not a lot on some v generous assumptions.
I'm not sure how are you calculating any of that... And they do in fact have just under 300 employees.
You're math is only the incentive fee, not management fees and so understates revenue by almost half. And the 300 seems to be total employees, not just investment professionals and so likely picks up a bunch of support staff making 100k or so.
Not that any of that really matters unless you're an equity holder, which you won't be.
$8bn is unlevered likely running > $20bn levered
They lever up 4-5x, so more like $30-40bn. They can lever up that much because risk management is super, super tight. Beta can only range between +0.1 to -0.1; anything higher/lower and you're getting a call from the head of Risk Mgmt.
would be great if anyone had a recent newsletter/eco. overview from them. Please PM
would be great if anyone had a recent newsletter/eco. overview from them. Please PM
would be great if anyone had a recent newsletter/eco. overview from them. Please PM
lol of course they dont do distressed... just like all multi manager shops... their stop limit is like 4% before they get half their allocation taken away.
The actual number is -2.5% absolute for a 50% drawdown of capital, -5% gets a pink slip.
This seems like such a ridiculous way to invest money. I know there are a lot of smart people there, but I can't fathom an investment process with these kinds of constraints.
It's actually not as bad or constraining as it sounds. If your beta is actually that tight, your daily volatility is pretty low (for a real neutral fund that's not run strictly RV, your daily vol is likely something like 30-60bps of your long market value - if you are pair trading it might be even lower). So to lose 5% usually requires a string of bad bets, especially if you are diversified.
These terms make my head hurt
@sonibubu
If the limits are so tight, how much does each trader typically make on their capital allocation? Can't be that much...right? Maybe single digit returns? And if you're trading macro, what benchmark do they calculate beta off of (like what do they use as the "market")?
Bingo. They're beta-neutral the PMs also hedge out other factors (cap size, value/momo, etc) to try to minimize volatility. Hedge everything out and as long as you're picking winners and shorting losers and can get to +5% rather than -5%, lever it up and you're golden.
meant to say credit not distressed, they are very strong in credit....apologies, foot in mouth, im a donk
I know they lifted out several of Citadel's financials guys recently. Solid shop, likely getting stronger next few yrs.
lol 2.5? thats horrible.
yeah but you dont get compensated on leverage; so circling back to the initial discussion point; economics are still horrendous
^ don't want to speak for anyone but i think that's what he meant by a terrible way to invest money.
sure sure, my point was that when most people hear 'lose 5% and you're fired' they think 'wow that sounds impossible / ridiculous / totally stressful / how do you make any money / it must all be really short term??'
the point I was making is that losing 5% is harder than it sounds if you're halfway decent.
And to the person who asked how you make any money then...a good year is probably making between 5-15%. The key in all of this is leverage. If you're running a $500MM portfolio @ $250 a side and you make $25MM of pnl for the firm and they pay you 10-30% (yes there are places that have payouts like that), you are taking home anywhere from 2.5-8MM.
Thanks - I take it then that the $500MM portfolio is levered money, not real money? So if you made 10% on the levered money, then you are really making 40% to 50% for the investors on their real money contribution (assuming 4x to 5x leverage as someone said above)?
The 8MM take home is certainly a lot, but isn't that pretty much the ceiling? Since a lot of RV-type strategies run into scalability issues above a certain level of notional portfolio?
Any color on the macro side perhaps and what benchmark they calculate the market-neutrality off of?
The math here is pretty solid, but just keep in mind the PM splits this with his team (he decides when/if/who to hire analysts). So of the $8mm maybe $6mm to the PM and $1mm bonus to each analyst...something along those lines assuming a 3-person team.
The last few posts are correct.
They are happy with a single credit-focused PM making low/mid single digit returns on his allocated capital. Frankly, this is about what you should expect on this strategy as well (because they are primarily doing large/liquid/efficiently-priced credits & indices).
The reason they are happy with these returns is because they are levered 4x at the firm level. So that 4% return is actually a 16% to investors (before fees) and theoretically no beta.
Trading very liquid credit products under tight risk management makes it tough to lose money.
Citadel does the same thing on the credit side, except with more firm-level leverage.
To clarify, they are primarily cap-structure traders - not investors.
The content of this thread ended up materially more interesting than the original topic.
Their gross aum is 5-6bn but they lever up 2-3x. Dmitry balyasny is legit and its multistrat but its a bit of a pressure cooker type place
For most of the people above, most ppl don't get a cut of the mgmt. fee and the 300 employees arnt all investment professionals ...
Thanks for the info on this thread, it is really helpful. Sorry for hijacking/such a noob question but can someone compare this market neutral strategy at Balyasny/Surveyor/etc. with a traditional value-oriented opportunistic long/short equity strategy at somewhere like Greenlight?
Bump, interested to hear if anyone knows anything else about comp / lifestyle / size of the teams, specifically in SF? Thx in advance.
Also curious, bump.
This will be very team-specific, like at all MM. I know a 2-person team running $300m and know a 5-person team running $1bn over at Baly.
FYI the book sizes at BAM are all inflated. E.g. if you have a 10m max drawdown that is supposedly a 200mm book. At most other firms that would be 100mm max. Not sure why they do this but seems like just to stroke the egos of the PMs.
300mm / 1bn gross market value or?
bump, lifestyle / comp nyc sf
Up 25% through oct in main fund. Article in BB today about them returning capital to HNW LPs now that they have a backlog of pension money coming in with better terms. They are back to $8bn aum I believe.
Anecdotally hear they are a solid shop.
Any idea about what BAM's ECM team does? Would love to get some details on their strategy, size, typical return targets, etc.
I know they're involved in SPAC arb in decent size
thanks! can you please tell me more about the SPAC arb strategy and also if you know the business model and focus areas of ECM teams in other multi-strategy funds?
I'm not an HF guy, but one of my investors/close friends works there.
When I asked him about it, he said he doesn't care where is as it depends most on the PM you're with as opposed to firm. He has been crushing it though, his comp in 2020 was low 7 figures and will be mid or high 7 figures this year. 28/29 years old.
Helpful color - how many YOE? PM or still an analyst / associate?
Whats his background?
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