LO AM to Millennium/P72/etc. spin out

I've had very initial discussions with an ex-PM of a manager like P72, who has has been seeded and has been going for 2-ish years. They're looking to bring in an analyst.

My background is ~10 years in fundamental LO equities. I'm used to holding positions for 2-3 years and having an index as my benchmark; in this role it would be Sharpes and whatever else that can be calculated.

If I were to consider this L/S fund, what factors should I be considering? What are the potential pitfalls of moving over?

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Comments (7)

Nov 17, 2021 - 9:13pm

I'm not going to go so far as to say what they said, but why exactly is making you want to make this kind of move? I'm just kind of curious why you would want to leave the security of your job for potentially similar comp. Any more details might help me give a bit more of a complete answer. For context, I'm at a large LO AM and have done quantitative work and advisory work in the past.

Most Helpful
Nov 18, 2021 - 12:43pm

Some things to think about:

  • The people you'll be working with. You have a lot of your career ahead of you, which means that you're going to want to have really good bosses, mentors, and coworkers. Make sure you're in alignment not just in investment philosophy but also in your workflow style and with respect to personality. 
  • Performance: Past performance does not guarantee future success but having a track record increases investment confidence. Make sure the place you go to has a really solid performance history AND is well situated to perform well in future investment climates. Fund agility, depth of research, and knowledgeability of staff will be of paramount consideration here.
  • Understanding of role: How well do you understand the role you are applying for or about to take? If you don't fully get it, make sure you build up your knowledge base so that you can best assess what type of fund you might want to work for.
  • Investment styles: Does the kind of investing you'll be doing match your existing investment style (probably not...) or is a style that you believe your research frameworks and investment acumen can readily adapt to?
  • Personal and Lifestyle: Does the job give you the same level of compensation or potentials for increases? Will you have the same work-life balance and job security? Will you have to move to take the job and is this new location in a place well known for finance?

Pitfalls:

  • Elimination of Fund: Not only are you out of a job, but now you have a gap on your resume. I imagine this is something you'll be equipped to deal with should it occur, but realize that this can mean a tough recruiting process going forward for roles both in the LO and L/S space. 
  • Difficult promotion pathway: Also something that I'm sure you're not new to, but at the same time, making PM could be difficult if your fund is relatively new. Just make sure you'll be happy where this role could take you, knowing what you already know.
  • Work-Life Balance: One of the things that attracts people to LO the most is WLB, and this is something that is not replicated on the L/S side. At the same time realize, that even I, someone who used to work obsessively, can appreciate having a bit of WLB in my current job. 

I hope that gives you a good start on some things to think about at a possible fund to join. If you have questions about the types of things you might see on the job itself (i.e. Sharpes), happy to discuss as well. 

  • Investment Analyst in AM - Equities
Nov 18, 2021 - 10:39pm

Thanks. You make some great points.

Where I could get unstuck is the change in investment style. It's been explained to me positions are typically held for 2-3 months, leaving not much room for error, compared to a longer time horizon that allows a thesis to play out. Maybe I am misunderstanding how a fund like this one operates.

Having been part of a team that wasn't on the same page, I would be happy to just be an analyst of a motivated team. For now, I'm not seeking a PM role, so I don't mind the lack of promotion path at a smaller shop.

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Nov 18, 2021 - 10:47pm

That makes sense. And yeah, it can be difficult to realize you can only hold your positions for a short time. This is just the nature of shorting, since the potential loss in shorting is so great, and waiting for a thesis to play out will likely ensure failure. 

Additionally, it's totally fine to just want to stay an analyst. At my company, it's pretty common to see analysts who are nearing retirement age, having been in that role for over 25+ years. At the same time, this makes me want to reiterate that you really want to work with people you like, since they might be your colleagues for a while. 

  • Investment Analyst in AM - Equities
Nov 21, 2021 - 1:09am

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