Should I make the move to a multi-manager platform?

SBAsia's picture
Rank: Monkey | 39

I have graduated from college for 4 years and am working in a financial center in Asia (think Hong Kong/Singapore/Tokyo). Currently I am an equity research analyst in a fairly large Asian asset manager (>US$1bn, quite large in the context of Asian homegrown managers) and I have been with this firm for around 1.5 years. The philosophy is concentrated, very long term, quality and growth focused. The founder admires the philosophy of Buffett and Sequoia Fund very much so we have a very strong culture about this philosophy in the firm. I just got an offer from a multi-manager platform (those usual ones), covering the same region and sector I am covering (and I enjoy covering these).

I am not sure if I should move over. Below are my analysis:

Pros of moving
1. Better brand name. My current one is fairly reputable in Asia, but yeah, those platforms have even better brand
2. Better comp, my current firm has L/S strategy but the majority of AUM is in long-only. Comp is decent but not that great.
3. Definitely faster progression. My firm is all about promoting from within, but the process is definitely much slower than platforms.
4. The pod I got offer from is among the better pods in that office.

Cons of moving
1. Mismatch in philosophy. I am a true believer in the philosophy of my current firm and I enjoy working here very much. The pod, despite also fundamental-focused, is much more short term and trading oriented (as with all the platforms out there).
2. The nurturing/training part will be much worse. My current fund is very willing to nurture young people, the founder is very patient and the AUM base is among the most stable within Asian managers. We have a lot of chance and time to learn from different PMs. We are multi-manager also (but not the platform type) and most managers are fairly successful in the strategies they run. I cannot imagine such nurturing scene in a platform.

I feel like moving to the platform is more for short term benefit (the prestige, comp and progression) but I may be underestimating the difficulty and stress working in those platforms. In the long run, I would still like to go back to the type of funds I am working in, just not sure if it would be better to get a better brand under belt first and try to make a faster progression in a platform would help.
Any input will be much appreciated. Thanks.

Comments (10)

Best Response
Apr 15, 2018

Hard to say without knowing all the factors, but I'd say no. If you want to move to hedge fund side keep recruiting to get a good single-manager seat.

Multi-managers are generally terrible places to work. The pay isn't as high as you think once risk adjusted (in years where your team loses money you get 0 bonus). Turnover and career risk are absurd.

The only way I'd consider the move is if your current firm is forgiving and would let you return after the likely short trip to multi-manager land. Even then, it would likely hurt your chances at a long fund career so I'd recommend staying where you are and recruiting for higher quality opportunities.

Apr 15, 2018

Thanks a lot, SB +1.

Could you elaborate more how it would likely hurt my chance at a long fund career? And what other factors do you think important in thinking about the move? Thanks again.

Apr 15, 2018

I mean that platform careers are precarious and high risk. If you go to a platform and your team gets blown out after a year or two you might not be able to find another good job. If you then go back to the asset manager would be hard to make another jump back to hedge fund land

Other factors are compensation and the PM you will work with. Obviously the more experience the PM and the bigger the book the better - you're tying yourself to the PM's ability to make money here

Apr 15, 2018

Would your recommendation be any different if the position he was offered at the platform was that of a stand-alone pm starting out with a 100mm book?

    • 1
Apr 15, 2018

Yes.

Platforms suck for analyst because its a lot of career risk and not that much money. Risk/reward mismatch. For a PM its different because at least you have the option to make a lot of money (not that much on a 100M book but if your book grows to decent size). The PMs are getting compensated for the risk, the analysts are not

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Apr 16, 2018

Based on what you said, don't do it. The above posts outline the reasons why well so won't repeat, but the key is the mismatch in philosophy. Most platforms are traders, whereas you are clearly not. Personal view is making a move like this for prestige is a terrible mistake. You must believe in the investment philosophy, otherwise your other two cited benefits (comp & progression) disappear. And re the final cited benefit of prestige, I personally do not think an analyst job at a platform is as prestigious as you imply.

    • 2
Apr 26, 2018

I agree with the comments above...

Furthermore, you can probably spend a bit more time at your current place (assuming you enjoy the work), so that you can get more experience and are able to make a more informed decision in the future. The platforms will still be there.

Apr 26, 2018
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