I am looking for some colour on what a typical short-term L/S pitch might look like at a pod-shop?
What are some fictitious examples of some theses that would make sense? How do you word the pitch concisely and articulately to get the point across (either verbally or written)?
What are some common mistakes people make when pitching ideas for L/S MM funds?
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Based on the highest ranked content on WSO, here's how you might approach a short-term L/S pitch for a multi-manager (MM) fund, often referred to as a "pod-shop":
Fictitious Examples of Short-Term L/S Theses:
Long Thesis: A tech company has just announced a revolutionary product that is expected to capture significant market share within the next quarter. The company has a strong track record of successful product launches, and early sales figures are exceeding expectations. The pitch would focus on the immediate revenue impact, market sentiment, and potential for upward earnings revisions.
Short Thesis: A retail company is facing declining sales due to increased competition from e-commerce platforms. The upcoming quarter is expected to show a continuation of this trend, exacerbated by poor inventory management leading to discounting and margin compression. The pitch would highlight the expected negative earnings surprise and deteriorating fundamentals.
How to Word the Pitch:
Common Mistakes in L/S MM Fund Pitches:
Remember, the key to a successful pitch at a MM fund is to be clear, concise, and to back up your thesis with solid data and a well-thought-out risk management strategy.
Sources: Qualities of a Great Investor, MultiManager PM (Millenium, Balyasny, Schonfeld) minimum requirements, https://www.wallstreetoasis.com/forum/hedge-fund/advice-on-hf-recruiting?customgpt=1, Post-MBA Recruiting At Top Asset Managers / LOs, Stock Pitch Sample Template - Proven Examples to Help Ace Your Interview
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No one is going to spoonfeed you the answer. Pick a company, model it out as granularly as you can, and chart KPIs historically. Read earnings transcripts and figure out what actually matters for this stock. Do the work to see how its moved on previous press releases and big sector/macro shifts. For every "jump" in stock price that's happened in the last 1-2 years, do the work to investigate what caused it.
Once you know what's caused moves in the past and what matters to the market for this name you can look into what you believe the street is pricing and compare that with what you think is going to happen wrt these factors you have identified. You should be able to see where about in the model your view will cause big moves and when you think it will happen.
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