Why is everyone obsessed with equity L/S
I work at a multi-manager and I genuinely wonder why students or IB associates who want to go the HF way are obsessed with equity L/S whereas credit is much better, on almost every metric.
I've been working at a MM for a few years and to be honnest equity L/S is clearly one of the worst strategy one could want to learn. Equity is overcrowded so you have to work like crazy to deliver consistent pnl. You have kids coming from IB or PE who have been used to have no life out of work, with IQ > 130 and you're supposed to compete with these guys. In my fund people in credit leave between 30 min (for PMs) and 1 hour (for analysts) after market closure. I've never seen people from equity leave as I leave much before them..
Sharpe ratio for equity L/S is low unless you're a genius so personally I would not be able to cope with the pressure. I see people on various credit strategies including myself with sharpe consistently >4 and it's much much easier to sleep at night.
Credit is less liquid, has a bid ask so you're not seriously competting against algos yet. The market is much bigger so there are more opportunities and you're able to put bigger sizes on your bets.
Some might argue that credit is boring. That's true, but after a few years working in an HF, you don't care how fascinating valuing a financial product or a business is, you just want to find good opportunities quickly, and make money. Pricing a fixed income product is much easier and quicker than equity. Also most equity people in MMs are just guessing quarters, don't tell me this is interesting...
In the end you got 2 products and one has more mispricing opportunities, is easier and quicker to price, you need to work less as you don't compete with work freaks and algos and if you're good you have a better sharpe so you sleep at night. SO WHY WOULD YOU GO INTO EQUITY L/S?
FYI I was doing equities and moved to credit: less hours, less stress, easier job, easier money.