When did you feel ready to make the transition from analyst to PM?


This is less about track record and more about what skills you felt you'd begun to master?


I feel like I could crank out ideas and monitor my book all day (i.e analyst), but unclear what it takes to actually start being a PM and actively managing that book.

Comments (11)

Sep 19, 2020 - 12:32am

i'm interested in this topic as well - how and when should one bring up the desire to become a PM and would this possibly cause blowback from one's PM that could be risky to one's career? Seems chicken or egg issue - if you don't ask you don't get but if you do ask you could be viewed as a threat/competition to your existing PM? 

Sep 22, 2020 - 5:53pm

One thing I know at my old gig is that PMs sometimes gotta take investors' calls, which means you have to articulate your alpha really well for the allocators (sometimes layman) to understand and be able to answer all kind of questions. It's obviously more difficult than just pitching trade ideas. Also, heard more funds now have APM (Associate/Assistant PM) between Analyst and PM as a transition. Would be interested to hear other people's opinions about preparation for both jumps.

Sep 23, 2020 - 9:51pm

I would not say it's easy to learn. As always, the devil is in the detail. Questions like why is the alpha there, how long is it gonna last, how do you deal with drawdown or why do you think your risk mgmt methodology is robust, etc. Try to come up with irrefutable answers and present your arguments confidently when confronting continuous follow-up questions.

"early to mid 30s becoming PMs"  Did I say anything about age? I thought that's why a bunch of late 20s smart analysts who can always come up with great trade ideas spend more than 5 years refining the skill and then end up being a PM. (some even failed)

Most Helpful
Sep 23, 2020 - 10:38pm

This is less about track record and more about what skills you felt you'd begun to master?


I feel like I could crank out ideas and monitor my book all day (i.e analyst), but unclear what it takes to actually start being a PM and actively managing that book.

I came from a more trading background so it was always assumed that I would become a PM (and that's been the traditional path for many across a number of asset classes). I'll take a stab at this and give a little background on me.

I can't say that I was ready, but the minute my first idea went in the book, and then another, bingo, I was a PM. I was responsible for those positions and told "Congrats! you are now a PM. Now don't bug me unless it's important, don't lose much money and you still have to do the monkey work you were doing before"

It is a very different experience compared to just pitching ideas and seeing them in the book. All of the sudden these positions are your responsibility. You not only have to monitor the positions, but add/subtract, manage the risk, deal with financing/prime/stock borrow, think of more ideas, put them on, and maybe pitch some of them to your boss (who usually is like "sure, whatever" only to tell you to get out a week later, or on the other hand say, "hmm I want that in $50m rather than $10m. Get it done. It's yours to watch and trade around").

Then your PnL. It moves... Every. Single. Second. All. The. Time. Whereas PnL was theoretical before or you could blame your boss or execution or whatever if things didn't work out, now it's all you. And usually you can view it right in front of you (not a good thing, and very distracting I assure you). You have nowhere to hide. Your boss and your boss's boss and whoever will definitely ask you about the book (good bosses leave you alone, most don't) and so may (ie. will) comment on the book, the ideas, etc etc. But then often say "well it's your book, so do what you will". Of course sometimes a position does great and rather than a pat on the back, it's "we should have been bigger" and if something goes wrong "why didn't you cut?"

To be frank, my boss never gave me grief. He was too stressed out from the pressure from above him that harassed him like this... All. The. Time. And he was a superstar.

In short, I'm not sure anyone is ever just ready or builds the "skillset." You just have to do it and see how it goes. Hopefully your boss/colleagues are helpful (most aren't), understanding (maybe) and/or patient (probably not). There is an incredible amount of luck involved in this game.

I will close by saying that (depending on strategy and asset class), that being an analyst and a PM require very different skill sets. PMs often have to watch an entire book, monitor it, think about correlations, greeks, factors etc and put things together, all while analysts are bugging them with ideas/thoughts (a good thing). That's in addition to maybe doing some research, staying on top of news, filtering ideas etc. But there are significant elements of risk management, technical, sometimes ops issues and analysis, studying, reading involved. It's not just getting deep on a few companies/sectors and pitching ideas. Sometimes, analysts are given a cut of their positions PnL, or a small pot of money to manage some of their ideas and if that does well, then the pot of money gets bigger and so on, so forth.

Neither skillset is better than the other. Just different. I have seen plenty of PMs who would not be great analysts (plenty that are/were) but are good at all the other stuff, and likewise analysts who never seem to get a hold of the other skills (or luck) but are very good at what they do.

I hope this helps.

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
Sep 25, 2020 - 12:02am

In my fund, we define PM is the person who equips the following three skill sets:
1. Research and Investment: the ability to generate a sustainable quality return.

2. Team building: the ability to recruit and retain talents.

3. Fund Raising: the ability to communicate with the LPs and the ability to construct a high-quality investor base.

Basically a well-rounded person...

Sep 25, 2020 - 12:53am

Like all things, the "hard" skills of being a PM can be learned and mastered. But I think the thing that determines whether you can be a PM or not is something that can't be changed -- your tolerance for risk. 

Not everyone is built to be a PM. In fact, most people are not. I know many people who were fantastic analysts but floundered as PMs because they were inherently uncomfortable putting large amounts of capital at risk. They were scared of big losses. So while these PMs will never put your fund in jeopardy with huge losses, they will never make enough money to move the needle for your fund either. 

Start Discussion

Popular Content See all

I can SB myself?
+58OFFby Intern in Investment Banking - Generalist">Intern in IB - Gen
Biggest Regret in Undergrad
+48IBby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A
The lighter side of IB! (Hopefully)
+23IBby 1st Year Analyst in Investment Banking - Mergers and Acquisitions">Analyst 1 in IB-M&A
Virtual Summer Interns - which banks sent you WFH gear?
+17IBby Intern in Investment Banking - Industry/Coverage">Intern in IB - Ind
What is 1st year all-in comp for MMs?
+12IBby Intern in Investment Banking - Mergers and Acquisitions">Intern in IB-M&A
Making the first move as a woman?
+11OFFby Intern in Investment Banking - Generalist">Intern in IB - Gen

Total Avg Compensation

October 2020 Hedge Fund

  • Vice President (18) $520
  • Director/MD (10) $359
  • Portfolio Manager (7) $297
  • Manager (4) $282
  • 3rd+ Year Associate (18) $269
  • 2nd Year Associate (25) $242
  • Engineer/Quant (47) $236
  • 1st Year Associate (59) $189
  • Analysts (175) $167
  • Intern/Summer Associate (13) $133
  • Junior Trader (5) $102
  • Intern/Summer Analyst (189) $81

Leaderboard See all

LonLonMilk's picture
Jamoldo's picture
Secyh62's picture
CompBanker's picture
redever's picture
Addinator's picture
frgna's picture
NuckFuts's picture
bolo up's picture
bolo up
Edifice's picture