Pigeon-Holed as a MM Investor?

Hi guys, current MM IB analyst here covering the biotechnology space looking to eventually make the move to a biotechnology investment firm. My ideal eventual landing spot has a long term investment horizon, has a value-tilt, and invests in both public and private companies. 

In the past I was pretty against making the move to a multi manager fund because of they generally have such a short term investment focus, but have recently started to reconsider. if I were to use to somewhere to Citadel, I would plan on staying for a couple of years to get some solid training then move to a single manager. 

I spoke with a recruiter the other day and he mentioned that people can get pigeonholed once they work at a MM and can't move to single manager funds. Would you all say this is true? How would you all approach recruiting if you were me. 

Comments (14)

Jun 10, 2021 - 1:30am

It's just wrong for the recruiter to tell you that you could get pigeonholed into working at a MM. Working at a MM not only validates your skill but opens up doors into working at SM funds so ignore that noise. Assuming you are covering mostly equity deals as a biotech banker, you should have a pretty good shot at landing a MM fund in a biotech pod if you can look past the short-term investment horizon, which by the way differs drastically pod to pod.

Can't comment on the exact type of fund you are trying to move to (maybe a deerfield or casdin - at a smaller level?) but certainly experience at a MM wouldn't hinder your goal at all.

  • 2
Jun 10, 2021 - 2:38am

Can't say much for that except that you've got to diligence them yourself during the interview process if you happen to get one. You could also network but not sure how the hit rate is for that with HFs

Jun 15, 2021 - 10:49pm

Tenure. References, AUM, returns, etc can help. But first and absolutely foremost - tenure. If they tell you they moved shops because they were crushing it at MM1 and MM2 just had to have them - it's probably not true. The pay is pretty efficient and moving means rebuilding models and losing months, if a PM moved - he probably got fired. Tenure.

  • Investment Analyst in HF - EquityHedge
Jun 10, 2021 - 7:35am

Most single managers won't care about MM background but its absolutely true that a few will. But the kind of SMs that do penalize MM experience are tough to get into anyway. 

The real issue with MM job isn't the short-term horizon, but the potential of a short-term career and having to switch seats often. Just diligence your PM as best as you can - start out with an all-star MM PM and you'll crush it.

Most Helpful
Jun 15, 2021 - 10:47pm

Case-by-case, if you work for a great PM and learn a process that, while short-term/risk-conscious still produces variant views via good research you'll be fine. Some pods do that kind of research, some don't. I've found many of the type single manager fund that traditionally would have passed on MM candidates, has adopted more data/risk/catalyst-conscious focus and is open to it. If you are capable of making the mindset shift, MM will be a barrier LESS OFTEN than it would have been 5-10 years ago. For some it's still a barrier. IMO there is no difference in capability btwn best possible shop folks and people at best SMs. But pod shops are more of a mixed bag - easier to get hired, easier to get fired. I also think MMs have done a good job grabbing more talent early and the bar for juniors out of banking has risen and that's been recognized by SMs. Just my thoughts.
 

  • Research Analyst in HF - Other
Jun 16, 2021 - 12:21pm

Brutal truth: over last 5-10 years, the kind of funds that "look down" upon pods are prob no longer the ones you want to work for anyway

  • Investment Analyst in HF - EquityHedge
Jun 16, 2021 - 4:31pm

Fate of SMs has been widely divergent over past 5-10 yrs. 

Sure, pod analyst doesn't envy Greenlight or any of the classic value trap funds but ask a pod analyst if they'll take a job at Pershing, Tiger, Viking tomorrow...

  • Research Analyst in HF - Other
Jun 16, 2021 - 5:40pm

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