Blackrock PAG vs. GS MRMA vs. Belvedere Trading

rommytopBelvedere definitely sounds awesome. I guess my thought is that what if after 3 or 4 years I want to move into a hedge fund or into asset management. Would this be more likely from Belvedere or from the other roles?

That's a tough one because what Belvedere does (market making, mostly options from what I know although I believe they do some futures spread trading as well) is pretty specialized. It depends on whether you still want to have a trading role in a hedge fund or asset management. right now it sounds like you have done your research and know what interests you, but you may find that trading isn't as great as you thought because you want to learn about companies in more depth (what happened to me). In that case it's certainly possible to move around and I know several people who have done so (I never worked at belvedere but I did work at a very similar shop in terms of size, products, strategies, etc.). However, moving into a l/s or asset management role in a research or fundamental investing capacity will be difficult because you aren't developing the same skills. It does seem like Belvedere is your best option though.

Also, just keep in mind that everything I say is very general and could vary a lot depending on your experience, school, connections, etc. I now work in banking which sounded impossible when I wanted to switch from prop trading so just remember that the common paths aren't the only ones. I will way though that as time goes on the switch seems harder, but after the first 1-2 years out of school a lot of people (this would be outside of banking and consulting with jobs like accounting, cor. finance, etc.) switch careers, so I think it's a very widespread thing.

rommytopProp trader, that's good advice and perspective. One thing you mentioned sparks a question: do you think working at a shop like belvedere would allow for future possibilities trading at hedge funds or am firms? So even if I love trading and want to stay in trading, but want to move from a prop shop in Chicago to a hedge fund in NYC or elsewhere, is that a move that would be realistic?

Good question. That's definitely possible and I have seen it done (with hedge funds at least) more than half a dozen times. Most of them continued to trade the same product (equity derivs or commodity futures for example) but in a different way. At their new role, they focused on high frequency trading strategies like pairs, stat arbitrage, etc and not market making. I haven't seen anyone move over to asset management because the trader role at those firms is purely execution and not nearly as interesting as at a prop firm or hedge fund where you can manage your own book and create new strategies. Keep in mind that many prop firms have locations in New York so it's certainly possible to stay in prop trading and move to a different city. From what I heard from them, they switched to hedge funds because they wanted to focus on creating a wider variety of potential strategies and had more freedom than at prop firms which were limited by firm risk criteria, market making requirements, etc.

I'm sure you already know this, but I just wanted to point out that hedge fund specifies a business/fee structure and not strategies. While a lot of hedge funds focus on longer-term investing, there are several high frequency funds that are significantly different than a traditional long/short fund and prop firms that use the same strategies as those funds so the importance isn't so much on whether it's a prop firm or hedge fund but rather what strategy you are using. For example, wolverine has a large market making unit but also has a large internal hedge fund that focuses on stat. arbitrage.

gammaoverthetaI have a question and a warning. Warning (anecdotal evidence): I hear it is pretty hard to go from a prop-shop to sell-side S&T. Source: I was at a BB in S&T this summer, where one of the associates was from a very big prop shop who had left after 5 years for b school and sell-side. He said he was the only one of his colleagues/friends who successfully got a spot in S&T after working at a prop shop. In the end, he didn't get an offer.

Question (and I anticipate getting shit from all the prop shop fanboys): how is working at a prop shop truly front office? I mean, the principals are the clients. I know it's not back office, but it doesn't seem client-facing. Seems more like it's own breed to me. It's not like S&T where you're trying to get huge accounts and you go out for drinks with Fortress and Anchorage clients on Thursdays.

You are completely right on switching to s&t. However, I also don't know many people who want to do so. At the prop firm I worked at the kids were mostly comp sci. majors who were considering working at microsoft and similar places so for them it was the best way to make money while still being able to write code. In fact, I would say that someone in s&t would be miserable at a prop shop and vice versa because, like you mentioned, there is no client interaction at a prop shop and you literally trade all day (which sucks as far as I'm concerned). Someone who would do well in s&t would probably go nuts not being able to talk to people, entertain clients, etc.

You bring up an interesting point about the front-office thing. I would say that the revenue generation portion of the front office definition is much more indicative of a front office role than the client facing aspect. To me, a back office role is one who supports the revenue generators and therefore is less important. Think about it, any buy-side shop doesn't have clients either. They of course have investors and will entertain them occasionally, but they ARE the clients. Regardless, it doesn't really matter. I'm assuming you are still in college (not an insult just an observation) because things like prestige, front/back office, rankings, etc. don't mean shit once you start working. The only thing that really matters is whether you like/are good at your job and you enjoy being around the people.

gammaoverthetaAnd I should mention that I included my warning above about banks not valuing prop shop experience for their S&T programs (proptrader14 concurs) because that is exactly where OP says he'd like to end up

Depending on OP's age, I'm inclined to say MRMA. GS will most likely not let him transfer internally to S&T, but it will really help him for the next round of recruitment (assuming he's a sophomore)

I'll just reply to both of your posts. Sorry I misinterpreted your post and assumed you were one of those bb or die prestige whores. You make a good point I didn't even read those posts haha but I see your point now.

Yeah that's good advice about s&t, I don't know how it works with internal transfers at banks but I still stick by my recommendation for belvedere because he would still be trading even if it's different than s&t at a bank vs. back or middle office where he isn't even finding out if he likes to trade. What if he spends months/years getting to the front office and then he finds out he hates trading (way in the future I know but I think it's a riskier path). To me, loving trading is about having a passion for the markets and the fast-paced environment (yes s&t involves selling but there are easier ways to sell products haha). I assume most s&t people do it because they love the markets and environment. Even though he won't actually be trading right away at belvedere, he will be learning/practicing trading which is a great gauge of how much one likes it (I didn't).

I just assumed, maybe incorrectly, that they were full-time offers given the timing of the post but maybe they are for internships. If it's for an internship then I agree that the Goldman offer is better because you can still network. Trust me, I know from experience that once you start working full-time networking becomes much harder because of time constraints as well as the lack of employers seeking you out like they do in college.