Multi-managers and capital lock-in for portfolio managers

For example, Quantbot supposedly has a 10 year contract with Schonfeld.

How common is it for PMs to obtain something like a 5-10 year capital lock-in from an MM platforms. Also, how would this work if the PM under-performs? I know it sounds ridiculous but apparently they do exist.

 
Most Helpful

In general an individual PM at an MM will not get an x year lock in. I could only imagine this in very specific cases. As I understand it Quantbot is an independent firm. They seem to manage Schonfeld capital, but can also manage external capital. So this is more like Schonfeld is seeding Quantbot, in my understanding and in such a case a lock in is quite standard. Similar as Millennium is doing with Worldquant, I would say.

 

I am guessing that such arrangements might not actually have a capital lock-in. We really have no idea what the contract covers. Perhaps the agreement is to provide for the PM's operational costs only or perhaps there are exit clauses built-in.

Seems foolish that an investor would be willing to get locked in like this given the failure rate.

 

Laborum quia vitae dolorem unde sunt perspiciatis. Excepturi autem totam odio officia nihil animi. Nostrum sequi id architecto a atque eos reiciendis.

Career Advancement Opportunities

March 2024 Hedge Fund

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

Overall Employee Satisfaction

March 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

March 2024 Hedge Fund

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

Total Avg Compensation

March 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 (249) $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
GameTheory's picture
GameTheory
98.9
6
dosk17's picture
dosk17
98.9
7
DrApeman's picture
DrApeman
98.9
8
CompBanker's picture
CompBanker
98.9
9
kanon's picture
kanon
98.9
10
numi's picture
numi
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...”