Point72 AM Vs. BB Banks

Hey guys,
Recently read an article about Point72's unique academy program that basically pays undergraduates to take classes for the first 15 months. Does anybody know the compensation that first year academy students, and first year analysts receive at Point72 and how it compares to bulge bracket banks (Goldman, MS, JP). I tried looking it up but there is little information on it. How do the exit opps compare?

Comments (10)

May 5, 2016

Point72's academy program seems like a great opportunity if you have a chance to do it. It's basically a way to get intensive training before moving directly into a buy-side role at the firm. I've heard that the compensation is comparable to a BB analyst but I can't confirm that. Not sure of the exit ops either because its such a new program, but the firm wants to retain the academy members since they're investing so much into them. Since its already a buy-side role, its likely that many will end up staying at the firm.

May 5, 2016

If you want to do investing, I would jump on P72 and not look back.

If you are one of many incredibly indecisive college kids....do banking

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May 6, 2016

You would have to be a moron to take a BB over point72 to be honest

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May 11, 2016

To call someone a moron for taking BB over point72 is not accurate, and these type of buyside > all type comments on WSO detract from the forum. There are many reasons to take a BB over point72 - optionality to PE/corp. dev/MBA programs are the big, glaring obvious ones, as well as the potential insider trading/multi-manager platform stigma associated with point72 (overblown in my opinion but still something to be aware of). Even ignoring those points, if you want to be a great investor there are tons of other intangible benefits to going to a BB first:

  1. the network - having 100 IBD analysts in your network, many of whom will move to PE/HF, is incredibly helpful in terms of sourcing and diligencing ideas in the future as you move on in your career. In addition many of these analysts will move into industry. Next time you are looking at a defense name helps to spend an hour on the phone with a kid in your analyst class who actually for Lockheed and has an idea of how the industry is structured before going further in your diligence.
  2. seeing how deals are done from the banker/company side is pretty helpful for thinking through deal dynamics especially if you are playing in risk arb or event driven type situations
  3. if you don't have a firm finance background having 2 years of banking is pretty solid for developing those skills before jumping to the buyside - this is especially true if you studied economics or poli sci. rather than finance/accounting
  4. many of the top hedge funds like the tiger cubs and the other big name single manager funds (highfields and the like) actually prefer to hire mostly out of 2+2 banking + PE because the diligence process is more thorough on the private side and honestly because they like being able to say we hired our analysts out of XYZ megafund as it contributes to their pedigree. Depending on the pod you are in, point72 is a very different place than a traditional long term value fund (less concentrated, more short term, depending on the PM) and if that is the type of HF you are looking for it is ironically better to start off in banking and PE than in point72 - this is based on the backgrounds of people I run into, but there are so few datapoints for the point72 undergrad program so take this with a grain of salt.

That said, I am sure there are lots of pros to starting at point72 first (smarter people more likely, jump into the investing side out of college) but it's not as clear cut a call as some people think

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Best Response
May 11, 2016

I think you are building bit of a strawman, I never said buyside > all. I specifically said Point72 > BB IBD, which I think holds true for a number of reasons. Also, I do think the buyside > sellside generally as the returns to intelligence and skill on the sellside at juniour levels are a lot lower. Are you honestly going to say a skilled analyst is more rewarded on the sellside and the buyside?

As to your points, they seem fair but I disagree:

  1. Network; You really think having IBD analysts is a great network for the buyside, as opposed to going to the buyside and networking with actual investors? The majority of IBD analysts would not make great investors, as evidenced by the fact that only small subset of them make it to a legit hedge fund in the first place. A hedge fund position at a place like Point72 is hell of a lot more competetive than a run of the mill IBD position at a BB. I think you are also vastly overplaying the channel check advantage also. Lets say you have a 100 analysts, probably 25 percent will leave finance altogether. Of the remaining, 50 percent will move into PE. The remaining are split between corp development and hedge fund roles. Those on the hedge fund side are generally your competitiors who will most likely not share ideas with you. So the actual amount of corp development contacts you have is small, relative to the amount of stocks youd be screening for anyway.
  2. Agree this works with a risk arb fund and can be useful. But lets think about what you learn on the sellside. Apart from making fancy powerpoint and building strawman excel models, not much. To forego that to actually learn from folks who have been fairly succesful on the buysid, investing day in and day out is moronic imho if you wanna be an investor one day. You dont think high level on the sellside, the aim is to make as much fees as possible. It is also why most MDs would be shit money managers.
  3. So you think you would learn more finance than joining an actual hedge fund which uses the same said finance knowledge as a necessary but not sufficient condition for screening analysts who want to get into the fund in the first place? I.e. Youre gna learn a pretty good finance skillset on the buyside, with more robut assumptions drivig the model.
  4. I agree diligence is a lot deeper on the private side. However investing on public markets is a different ball game. Personally i think the private offers a lot better learning opportunity so I would sort of half agree with what you say here. However i think investing in the the whipsaw of the public markets is something that can be taught, and having the pros teach you asap is the best way.

Ofcourse having a BB gives you optionality. I am not debating that. But the OP implied at wanting to exit to a hedge fund one, and if that is true I fail to see how this oft touted route from BB is beneficial. Just my 2 cents.

[Edit: typos]

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May 9, 2016

Why would you have to be a moron? Doesn't BB have way better exit opps? Also better overall rep for latarelling to other firms.

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May 9, 2016

I am operating under the assumption that you actually want to be on the buyside one day otherwise you wouldnt have applied to Point72 academy while simultaneously also asking about exit opps from BB (i.e. you dont wanna be a banker long term).

If this is true I fail to see how ending up at a BB is optimal given a choice exists. Secondly the sellside is for chumps who lack the ability to make real money (assuming you are looking at M&A type roles). Point72 is a pretty legit firm and most bankers who want to gtfo banking will be aiming for that anyway. So youd be a moron to pass this opportunity imo if you actually want to do buyside.

BB may provide more optionality but unless you wanna go to a corp dev role etc theres no point delaying by going BB.

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May 9, 2016

not to hijack this thread, but does anyone have any info on Point72's salary for the Academy program ?

May 10, 2016

Throwaway account - I've heard from someone very close to the program that first year base is 100k. I believe they got a bonus somewhere in the 50-70k annual range (prorated).

May 11, 2016