Best sectors for MM L/S

Any view on what are the best sectors for long / short equity pods at MM?  Are there any sectors that seem to consistently outperform / underperform more than others?  Seems like TMT / consumer / industrials are better than the rest but not sure if that is accurate

Also any difference for NYC vs London for this? Would guess less TMT in London (or at least lower quality investment universe for EU TMT) but no idea

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Comments (5)

Most Helpful
Sep 6, 2021 - 4:01pm

I'm biased, but I would look for an industry that offers a lot of breadth in terms of companies and subsectors as well as significant and growing market cap. To me, this is basically TMT, Consumer, and Healthcare. I've seen plenty of talented energy and FIG investors unable to really keep pace w/ changing environments as their sectors consolidate, shrink in market cap, and lose much of the dispersion that allowed them to generate alpha in the first place. Definitely not trying to knock these other sectors, especially if it's something you're passionate about or feel like you would have some sort of distinct advantage in. It just seems really hard to consistently make money.

If you look at most of the platforms, the teams that are large and growing tend to be biased to TMT, Consumer, and HC (in my experience) so I think they're probably the best place to start a career. Markets are always changing so who knows what the next 5 - 10 years will bring, but especially for TMT it's just such a broad sector that you can effectively "cover" any company you want while sticking to that high level mandate. 

Sep 8, 2021 - 3:43am

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