I work in event driven / arbitrage. Here are some career advice for you

It's been a while since I've visited WSO. Yet in my early 20s, this was the place that I would often come to for information and guidance. In the spirit of giving back, I'll share my story and a few nuggets of wisdom that I believe may help others who are also trying to strive in their professional lives.

My background

I went to a Canadian semi-target university majoring in finance and economics. In my 2nd year university, I discovered capital markets, trading/investing. I knew this was what I wanted to do but still had much to figure out. After I graduated, I worked in research at a retail broker looking at private equity and debt offerings.
After a year or so, I moved to equity research, then to the event-driven buyside fund where I joined as an analyst and eventually become a PM.

I moved back to the sell-side covering event-driven and arbitrage trading. I like what I do and am quite happy with where I am...

Tips

Some things I learned along the way ...

Whether its job search or on the job, aim to be productive by doing just a little at a time; set clear and small achievable goals

Everybody hates looking for jobs... I did too when over the years when I went through transition periods of looking (and eventually obtaining) something better. What I found worked for me was to set clear goals for myself, such as having a spreadsheet and applying for 1 or 2 jobs a day. But eventually, these "door knockings" add up and the numbers game works in your favor. And you get your responses and interviews.
So approach your job search methodically, work to submit 1 application a day. And do that every day. Consistency works/matters. 1 thing done right for 10 days in a row is better than doing 10 things right for 1 day. Also, try contacting recruiters. If you are consistent and disciplined in searching for roles of your choices, you may find that after a few weeks or month or two, there are no long positions on the jobs boards that you can find that you haven't tried before... start contacting recruiters. Call them up, email them, establish a connection with them. Use that as another source of the job hunt.

On the job, go into each day with a goal of just producing 1 or two useful insights. We all have tired days or days where we aren't that productive. In these times especially, don't fret about all the tasks you have to and haven't accomplished. Focus on the task at hand, and think about getting that immediate task done. (ie, over the next hour, I'll finish reading x and talk/email to person y; not o my god, I got so much shiit to do over the next 3 days, there is x, and y and z and @#[email protected]#$ ...) relax. Just focus on the task at hand. Set small goals/clear/achievable goals throughout the day and do them. One step at a time and you may accomplish a lot more than you'd imagine.

Take responsibility for your work

Whatever your focus is (covering a bunch of companies, covering clients, overseeing a project or a back/middle office jurisdiction), take total responsibility for your work. Care for the outcome of your domain. That is the right mentality assume and that is the mentality you get promoted with.
On the other hand, the less productive and less beneficial attitude that you could adopt is putting in a minimal level of effort only to ensure that you will not receive the wrath or disapproval of your superiors, or to simply keep your job. That's a defensive and immature way of working. Your boss doesn't own you, you own your work.

Dress well

I haven't experienced other professions, but my sneaking suspicion is that finance is a superficial profession, more so than most. The industry is predicated on moving fiat currencies around assets and people. The presentation is important. The better that you look/dress, the more people will listen to you and take you seriously. There are no ugly people in upper management.

CFA??? Probably worth it

I am biased because I took painstaking time to get it. It does serve as a signal device in the eyes of clients/employers/potential business partners, colleagues. It also gave me certain discipline and understanding of finance that is broader than others who haven't taken it and work solely in a narrow sub-sector of the industry. Though I don't remember everything, I find I have somewhat of an easy time picking up new concepts and asset classes because I've already gone through some primer versions of it in my CFA course load.

All I have to say for now. If you have questions to ask, please do so and I'll do my best reply during my downtime. If I think of other tips that others could find useful, I'll post later.

Thanks.

Comments (29)

Mar 10, 2019

Hi,

Thanks for the sharing. some questions from me:

  1. Are you currently working in the buy side of Canada or the state?
  2. Except that the Canadian market is much smaller, what is the difference between the fund in the state and Canada? Is there any difference in comp and bonus?
  3. How do you get through the gaps from an analyst to a PM?
Mar 10, 2019
  1. I came from Canadian buy-side, moved to US sell-side. It's an upgrade for me because I've always wanted to progress my career in the states, a final destination for me. I'm digging in my heels here.
  2. US comps are a little better IMO. As for the differences in funds, Canadian funds tend to be less eclectic and there are less diversity in strategies. Most are running some version of long only or long/short equities. There are special sits and credit funds here and there. but most funds on Bay street are pretty vanilla. That's not to say that there are great funds and great investors in Canada. Just less variety in strategies, partially because the investors are - for a lack of better term - less sophisticated, or less main tenant.
  3. I took over a portfolio at my previous firm when a PM left. It was a lucky opportunity in retrospect. I gained trading experience as well as analytical ones, which was/is my bread and butter skill set.

Hope that helps

    • 2
Mar 11, 2019

You went from PM to sellside associate?

Unless PM comp in Canada is 90% lower, I don't think that's a good move. Curious why you did that.

If you believe in your stock picking process (and if you don't, why are u even working) then you could've put up returns for 2 years and easily moved to any gig you wanted in the U.S. Including raising your own fund, again in the U.S.

    • 1
Mar 11, 2019

From his old posts this sounds a little fishy... Identifies himself as an analyst in topics about a year old at a $50mm fund (I don't even know how that's enough money to operate formally).

Looks like he ended up at RBC's risk arb desk - would probably be fairly easy to identify OP honestly.

    • 1
Mar 11, 2019

not at RBC...

Mar 12, 2019

You had multiple PM's at the $50mm fund? How many employees total? I can't imagine such a small fund was able to get more than 1.5%. I'm genuinely curious how the math works out for a $50mm fund to operate a multi manager strategy. No assistants? Work from home? Three Bloomberg's and monthly Keurig puts you on the streets?

    • 1
Mar 12, 2019

I'm really prying into this, but slow morning.

"Sales"
1.5% mgmt fee on $50mm: $750k
Post 15% capital tax: $640

"Costs"
Rent: $90k
IT (BBerg, etc.): $50k
Office costs: $20k
Assistants: $60k (min wage for two)

This leaves $400k for IP's. 4 in total (which if you had multiple PM's there would presumably be four at the least). What were you making as analyst? 60k??

BTW - never did fund accounting / a controller role so this might be a little janky. I just don't understand what could possibly be going on here.

    • 2
Mar 12, 2019

.

    • 1
Mar 14, 2019

Many thanks for sharing! We highly appreciate it. You have a good day.

    • 1
Mar 15, 2019

How much damage did the AVGO/QCOM/NXPI situation do to event / arbitrage guys' performance, broadly?

Most Helpful
Mar 15, 2019

QCOM/AVGO - didn't really have much impact
NXPI/QCOM - position sizing and how you traded it basically defined 2018 performance for every event/arb fund. The only offset was how much you owned in SKY/CMCSA

    • 2
Mar 17, 2019

Did Disney/Fox matter as well in the SKY/CMSA story?
I guess that AT&T/Sprint must have also impacted performance or are the merger arb guys not interested in playing in such fields when the DOJ/Trumps get involved?

Mar 19, 2019

Will your position die in next 5 years the same way traders died compared to how they used to work earlier?

Mar 28, 2019

Not likely. stat risk arb already exists. they compete with humans but disretionary risk arb is its own animal. there are many qualitative factors at play that quantitative parameters wouldn't really measure. it's more an art than science. That makes it hard to quantify.

Apr 10, 2019

I'm a junior doing buy-side debt this summer. Is it possible to move to sell side research for FT. Goal is buy-side fundamental l/s at a big multi manager

Apr 11, 2019

I can verify and vouch for the facts stated by the OP. You guys would be surprised how much talent is on the street. I personally cover or have worked with at least dozen PM at start up type funds that used to run 500mln+ portfolios.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

Nov 13, 2019
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