Ingenious, or stupid, way to fast track to PM

Hi Wall Street Oasis,

I, among the many on the buyside, wants to become a PM. I currently am somewhere, which is an analyst at a >1b L/S HF in NYC. But still no where near a PM. I could pay my dues, stand behind the line of analysts who also want to be PM, but never know whether I'll eventually get an allocation. Here is my ingenious idea.

Assume that I have a personable character and am well connected in various clubs. With my presentation skills, I can amass 1 million of cash from friends in the clubs. Here's the plan.

I go to my HF with enough cash to meet the minimum investment requirement. I won't tell my HF where's the money from. I'll give him the money under the condition that this 1 mil will solely run my strategy. HF's manager is happy because his AUM gets bumped up.

I tell my friends that I won't disclose which HF I work for. This way, my HF's reputation is protected should I fail to perform. I'll hire a professional accountant to give my friends the daily statements of the performance. Friends are happy because they get a 10% return.

I'm happy because I get my track record and trade with my HF's execution services. And with this track record, I can go back to my HF or another and ask for a PM title.

Ingenious or stupid?

Sincerely Yours,
Will

 

Might as well get that first 1MM, then show faked audited returns of 40% to get more capital invested and all their friends. And then continue this process only paying out a very few of them, until you have like $18BB. Then run away to the Czech Republic or Qatar.

Much better way and realistic way.

"It is better to have a friendship based on business, than a business based on friendship." - Rockefeller. "Live fast, die hard. Leave a good looking body." - Navy SEAL
 

The thing is, if you want to be PM you need to have an edge. How replaceable are you? What superior insight/skills/connections/research abilities do you have? How valuable are you? How difficult would it be to find a replacement for you if they let you go?

How badly do you want it? If you want it badly enough, and you dig deep enough, you'll find an edge. Be it uncovering an informational inefficiency, developing a big data framework for processing social media twitter feeds, attending court hearings in-person to report the outcome of a market-moving litigation verdict 10 minutes faster than the media ... the list can get very specific and very interesting.

With the explosion of new data sources and opportunities, you should have already been PM five years ago. You should have found something and developed a strategy to exploit it.

Get to work. Fast.

 

Hello. I actually work in a HF. And apart from that one person who gave a meaningful response, you guys are just being mean to someone who came up with this stupid idea based on what YOU guys keep saying in this forum.

Isn't it told here that 1) the jump is from analyst to PM, 2) it takes 4 to 12 years and most importantly 3) you may never make PM and be an analyst your whole life.

This is what WSO says. And this is my idea.

Look, I know it's hard. I've been here for a while and I'm still below two analysts in chain. And even if I have the most kick ass investment idea, the PM may not take it on because he has his own, after the tens of ideas from his other analysts.

Style, likability, investment universe, presentation, everything needs to lined up for the HF's money to go to my trades. Maybe it's easier for me to say that I got 1 mil in my bank to trade.

So don't be quick to dismiss my position. I'm just trying to think outside the box.

 

Yes, it's so likable of you to try and soft-bribe your PM into running your own book and jump ahead of the more accomplished senior analysts with your measly $1mm that isn't even entirely yours. If you have "kick ass ideas", then you will rise to the top naturally on that basis.

No one is being rude, your own thread title asked if this idea was ingenious or stupid, and guess what, it's stupid. Get over it.

 
undefined:
If you have "kick ass ideas", then you will rise to the top naturally on that basis.

That could take 5 years. I was thinking how I could get there sooner.

I may have a "kick ass idea", but my boss, by giving me allocation, doesn't want to risk pissing off the Harvard grad who has been here for 5 years with duties too costly to replace.

I may have a "kick ass idea", but the HF refuses to bulge on their 10 year old philosophy that they are never more than x% short.

I may have a "kick ass idea", but I'm guilty of coming from another country whose culture doesn't mesh well another country's.

I may have a "kick ass idea", but they don't see the need trading a new product in the same asset class, when all it'll take is to call up the sellside trader and say "Can I buy x amount of x".

You get the point. Okay, $1mil is a small amount. But maybe it's easier just going to them with the cash and not try to make a lot of things fit.

 

When you've dealt with the bullshit associated with dealing with LPs, and institutions who've put you on their platform, calling you up and screaming at you for wandering even a fraction of a centimeter away from your marketing platform and strategy mandate you'll understand why you can't put on a "great idea" because it doesn't fit the philosophy or asset class.

 

I respect that you're trying to come up with a workaround, and I have similar frustrations that the path to PM often seems more based on tenure / seniority than actual merit.

That being said, a $1mm investment isn't going to be worth the brain damage associated with administering a separately managed account. You're going to have a tremendous amount of extra legal/ compliance efforts in order for the fund to ensure they are protected, and especially if you are using any form of leverage. If you could walk to them with $100mm, that would be a different story, but in that case you probably just want to start your own fund.

 
Best Response

This is why the industry has such a high failure rate. Funds adopt "philosophies" . There is no "philosophy", there is just one guiding star - alpha. Funds which insist on a correct path will perish. All relevant paths must be considered, always exploiting the one of least resistance, however deviant from the fund's philosophy.

I am very lucky to work at a fund with one of the best 10+ year track records and the highest Sharpe in the industry. I will not mention any names but we stay very low-key.

If you have a kick-ass investment idea, it really works, and they're not trading on it because of politics ... then somebody else will find it, develop a strategy to exploit it and profit from it.

And that could be us or it could be another fund. This is why I love this industry. If you don't have the flexibility to adopt new strategies you will bleed out while others suck the profits from your lack of elasticity.

This is the beauty of the industry, the market does a great job at weeding out these inelastic funds.

But maybe your idea isn't so kick ass. Maybe it is. Do you have the evidence for it? Have you back-tested it on a risk-adjusted basis? Can you provide an explanation as to why this idea is not just a spurious relationship but has a sound economic rationale? Can you develop a trading strategy to exploit it? Do you have a rationale for why nobody has figured this out already?

While your idea may not work, I can fathom your ambition. I was there too one day a long time ago. You need to put your thinking cap on and come up with something unique, original and interesting. MORE IDEAS .... GET TO WORK.

 

Your cavalier attitude with respect to investment/trading strategies ("philosophies" as you so derisively allude to them) is more to blame for funds blowing up than funds insisting on a correct path. Alpha is of course important, but it's to be pursued in the correct fashion to protect your LPs. Generally your fund will just be one allocation in a broader portfolio, so it's expected to adhere to its advertised strategy/investment mandate. If you don't adhere to this strategy then you're now fucking up all of your LP's portfolios, which is a superb way to spur requests for redemptions, since now you've proven to them that you're no longer trustworthy, however much money you may have made by deviating from your mandate.

As for the OP: After reading this thread you're a far cry from coming across as personable.

 

Quod culpa libero et ipsa quia nobis nemo. Qui quidem laboriosam quis consequatur consectetur.

Porro dolor molestias iure. Saepe suscipit nam quis. Nesciunt eaque velit voluptatem nulla et expedita odio nulla.

Career Advancement Opportunities

April 2024 Hedge Fund

  • Point72 98.9%
  • D.E. Shaw 97.9%
  • Citadel Investment Group 96.8%
  • Magnetar Capital 95.8%
  • AQR Capital Management 94.7%

Overall Employee Satisfaction

April 2024 Hedge Fund

  • Magnetar Capital 98.9%
  • D.E. Shaw 97.8%
  • Blackstone Group 96.8%
  • Two Sigma Investments 95.7%
  • Citadel Investment Group 94.6%

Professional Growth Opportunities

April 2024 Hedge Fund

  • AQR Capital Management 99.0%
  • Point72 97.9%
  • D.E. Shaw 96.9%
  • Magnetar Capital 95.8%
  • Citadel Investment Group 94.8%

Total Avg Compensation

April 2024 Hedge Fund

  • Portfolio Manager (9) $1,648
  • Vice President (23) $474
  • Director/MD (12) $423
  • NA (6) $322
  • 3rd+ Year Associate (24) $287
  • Manager (4) $282
  • Engineer/Quant (71) $274
  • 2nd Year Associate (30) $251
  • 1st Year Associate (73) $190
  • Analysts (225) $179
  • Intern/Summer Associate (22) $131
  • Junior Trader (5) $102
  • Intern/Summer Analyst (250) $85
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
CompBanker's picture
CompBanker
98.9
6
kanon's picture
kanon
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
numi's picture
numi
98.8
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”