Titles in hedge funds - do they mean anything?

I've noticed some firms basically have analysts and PMs, with nothing in between, while others have general partners, managing directors, vice presidents, principals, associates, analysts, etc.

How do position titles work at your HF?

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Comments (14)

Jan 16, 2021 - 2:05pm

You're right, it's inconsistent, but it's often a function where the founder started their career. A firm rooted in IB will have IB type titles. It gets dangerous because larger firms sometimes call client service representatives a portfolio manager, even though they've not apart of the investment process. Therefore, it's difficult to tell unless you speak with the individual. 

Jan 16, 2021 - 4:31pm

Titles are in many cases implemented as funds grow to give a false sense of importance to analysts or traders (by calling them managing directors or portfolio managers). Generally they get in the way of efficiency and create unnecessary politics.

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Jan 17, 2021 - 3:22pm

Sorry to break your bubble, but I know plenty of "MDs" at HFs that are nothing but glorified analysts.

Similarly, a "CIO" at a crappy startup HF might be working on is own and making under $100k.

Then you might have "analysts" at large SMs raking in 8-digits in good years.

Titles on their own in the HF biz mean nothing.

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  • Investment Manager in HF - Other
Jan 17, 2021 - 5:06pm

This is generally right. The combination of title + fund starts to give you some info, but even that can be confusing (especially at larger funds where certain roles sound awesome but they are really more support type functions). The comp even at the "MD/head of group" level can vary by a lot (as can the responsibility set). 

The number of VP/MD/Global heads I see from small firms is pretty high (and have friends at some, and the comp is not "global head" comp). 

Jan 17, 2021 - 9:17pm

You took my words out of context. Obviously, at a tiny two person fund all these titles mean nothing. Conversely, I doubt an MD is a "glorified analyst" at a fund with reasonable headcount (say more than 30 staff). Compensation is whole other matter. I did not touch on that, but I think what you mentioned on that is accurate.

Jan 18, 2021 - 6:00am

mlroxx

You took my words out of context. Obviously, at a tiny two person fund all these titles mean nothing. Conversely, I doubt an MD is a "glorified analyst" at a fund with reasonable headcount (say more than 30 staff). Compensation is whole other matter. I did not touch on that, but I think what you mentioned on that is accurate.

If looked at all the hedge funds with more than 30 people these sort of MD titles you would find the VAST majority ARE just political ego boosting glorifications and mean almost nothing functionally. All that's relevant is can you generate good ideas and help the firm make money while playing nice in the sand box.

  • PM in HF - RelVal
Jan 18, 2021 - 9:40am

Aka Sculptor fka Och Ziff

They call their analysts "managing directors" lol

Jan 17, 2021 - 9:52am

The older and more established funds have titles like this, and your pay is based more on the title than the fund performance. The hierarchy exists to protect people at the top that the firm considers to be important.

I don't think VP is necessarily a manager, most people get VP if they stick around long enough and then top out there. It's not like a VP in a tech firm, which is much higher up.

Jan 17, 2021 - 9:36pm

Yes, what you mentioned could be the case at some places.  Of course, titles only mean anything if a firm has enough staff for a reasonable hierarchy.

Same goes for tech firms isn't it? A VP at a 10 people tech startup is obviously not the same as VP at FAANG in terms of responsibilities. However, what about VPs in firms of other sizes in between? I think once a firm has reached a reasonable size of say more than 30 people, hierarchy begins to take shape. Seniority, titles and leadership functions are at least positively correlated I would think. 

Jan 18, 2021 - 9:55am

The size of the firm matters, but somehow the VP title in finance doesn't have the same meaning as other industries. A finance VP is like a senior engineer or first-line manager, while a big tech VP typically makes 7 figures with hundreds of people under them. Sometimes even small finance firms (less than 30 people) can have a hierarchy of VP, MD, CIO, etc.

  • Associate 1 in IB-M&A
Jan 17, 2021 - 4:55pm

You basically have a spectrum of PM to model monkey and people just fall along this range depending on seniority/responsibility 

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