What do PM’s do if they don’t make it?
If you’re a 30-35 year old who performed well, have collected a few million but not made 10s of million, and you hit a bad few years and can’t land another PM role, where are you likely to end up?
I think I’d like being on the public side but compared to PE where you can screw up and by the time it’s found out you’ve done new deals which look good, HF’s are obviously marked daily and firing is more common.
What’s the most common next career move for former PM’s? Is there anything that’s the “go-to” where you’re still earning enough to put kids through school in Manhattan or is that wishful thinking? E.g. IR, something in a bank, operations type stuff where you’re still on good money, just not millions.
Associate 1 in PE - LBOs, pure crickets, that's where I come in. Any of these useful?
More suggestions...
If those topics were completely useless, don't blame me, blame my programmers...
probably return to being an analyst, most likely sell-side research. They can be great analysts, just shitty at asset allocation.
It's quite telling that in a forum which adores MMHFs, no one has answered you on possibly the most relevant and important question you should ask yourself when considering such a decision
Yeah I am a bit surprised. Surely everyone thinks through lol?
Recruitment arms of these shops dangle you the 7 figure payout some guy made in 2018 and people on here repeat it along with the usual "PurE aLpHa" shtick. Not sure this is a place where you are gonna get your answer.
My guess? Corp dev, smaller LOs and the like
We literally discussed this topic 2 months ago and then we discussed it again. I would like to know what PE guys do to put their kids through school in Manhattan. Cause I have met many former PE guys who went the startup route or corporate job and found a comfy landing spot but far from their peak earnings before.
Plus many people who are 35 these days have no desire to live in Manhattan there is reason all those Miami offices are opening.
PE to corp dev or a startup is a logical move. PE guys do operations. I’m trying to learn what the equivalent is in HF’s.
Do you do IR at a public co? Can you still get the BD or startup jobs? It’s a genuine question if wasn’t meant to come across as rude
If you are 35 w/$4mm saved that grows to $40mm at 65 at 8% compounded returns (S&P historical). if you spend all your $ from a lower income job on kids education etc you still can retire quite well
the bigger worry is if you get fired from HF industry before you make $1mm in which case that is more difficult
I've seen a number of moves. Saw a guy move into a CIO role at a family office, nothing spectacular but pays the bills. I've even seen some guys go back into another firm and not be the lead PM anymore. Some go back to some lower tier bank sell side analyst roles.
One thing about them, esp those that get booted in their 30s, once they lose that position they come back to earth and realize they aren't AXE. Def a mindset change.
Interesting point in your second paragraph. Perhaps the fall from grace hits less hard if you don’t leave earth in the first place? Or maybe you need the Axe mentality to even try? I’m not sure since I haven’t been able to break in yet, but I appreciate the perspective and wisdom.
Damn, maybe that HSW MBA that everyone likes to shit on might be useful for the long run.
Someone once told me “jobs are like women, you know they make them literally everywhere right?”
if you’re a workhorse and you understand enough finance to get by, you can always pivot to something making a few hundred $k at a corporation. It’s not like these guys are homeless, but no, you don’t get the lifestyle if you don’t do the job, that’s not how it works
Cant beat this advice, look at the mans title. Relax and enjoy life.
Sellside is common, especially since a former PM is likely connected to prior colleagues.
Fintech/ alt data/ crypto startups, launching something, trading one’s PA/ starting a family office are also common.
Quant PMs also exit to tech/ data science.
A couple PMs I know are making $$$ on Substack and what not
care to share which substacks (assume they are worth following if they're making money from them)?
Family offices, wealth management, and prop trading are common exits for "blow ups".
You move to another pod shop with worse payout, stricter limits, and lower gaurantees. You demote yourself back to a senior analyst at another pod. You become a director in your area of expertise at an IB. You move to BD at a MMHF. You become a quant researcher at an alpha factory. Really there's plenty of exit opportunities. Do they pay the 7 figures that most MMHF PMs expect? No, but you can easily make a very good living ~400k/year somewhere else no problems.
A lot of guys come from IB/PE backgrounds and still have networks in those worlds so I would imagine that those guys could go be a mid-level to sr finance person in a portco. Potentially even come back as an associate or VP at a MM fund depending on how long they’ve been out.
Think it’s more likely that people don’t switch into operational/corp fin type roles because they don’t want them. I would imagine that a talented finance professional could wind up just about anywhere if they actually understand base-level finance and investing. I mean that’s what I did after getting blown out a while back and I eventually found my way back to a HF.
Some answers here make me crack up. You think that someone who made it to PM and made a few bucks is now forced to be a no/mid level guy at some sell side firm or so? Get out of here. From what I have seen some guys make even more by investing PA and or launching businesses.
The burnout from a stop out, especially after it has happened more than once, is very real.
You may start to doubt you have it in you, that you’re capable of making money again. You lose the ability to generate your own ideas, or even act on them.
It takes time to rebuild that confidence again, if one ever does. And most traders don’t have the skills to be a builder/ operator. So going back to the sellside, corps or startups to stay busy and sane.
I've seen it first hand - I saw a guy become a SS Research Analyst at Stifel after getting smoked at a Citadel platform. Trust me - when you have to pay the bills you get humbled quick.
I know everyone thinks you make some $5-$10mil year and life is just badass from there but it doesn't necessarily work out that way.
I don't have many friends at MM, but the few data points that I do have point to a wide range of outcomes. These are all personal friends of mine:
1. He was banking --> top MM for 10+ years and eventually started his family office. He was a full-fledged PM.
2. He was 2+2-->bschool--> SM--> top MM. He got blown out but is now at top LO. He was a sub-PM type.
3. He was Bschool -> SS ER --> top MM. He was a senior analyst. He said he "retired because of crippling stress" but I heard he was blown out. He is unemployed.
4. He was 2+2-->bschool->SM--> lower-tier MM --> lower-tier MM. His team was blown out. HE is now in finance at tech startup. He was a senior analyst.
5. He was SS ER -> Bunch of different top and mid-tier MMs. He was a sub-PM type. He was blown out and been managing his own PA full-time for a long time.
6. He was banking --> SS ER --> couple of top MMs. His team was blown out. He moved over to a LO platform. He was a sub-PM type.
I'm not quite sure what to make of it. I think this is probably reflective of HF exits in general. #1 has outlier type of wealth. #2, #5, and #6 are all doing well and have tracked their other peers in HF/PE/banking. #3 and #4 are unfortunately behind the curve.
Concur with your sample that if you don’t make it to PM level generally means poorer post-HF career. Not sure how an analyst can blow out, maybe small book.
How much did #1 make during pod career if you have rough ests? And what does comp look like at a LO post MM sr analyst/pm stint? Can you still make MSD $mm?
I got blown out (late 20s) and I’m doing a cushy corporate gig now. Was still an analyst there, not a PM. If that’s worth anything.
Wait Pizz is no longer at HF? Crazy times.
Dark times indeed.
I saw your post a while back about looking at corporate roles. Did you go the FP&A route or something else in corporate? Curious if you have any thoughts on the move now after doing it.
Ended up taking a FP&A role (in a senior role) and make $150k base with 10% bonus + 15% equity. Current hours are 40-45 hours per week with no weekend work. The work is also much easier—once I turn in my deliverables I don’t have to think about it (as opposed to HF where you have to constantly think about your positions, sizing, changes to the thesis etc. ). I think at this point in my life I really needed this change because I got stressed out from the HF world.
Would also add that my current role is closer to a strategic finance role, where there’s more intense modeling, more analysis etc. as opposed to a strictly accounting, reporting type FP&A function.
Could you expand on your current job and whether you enjoy it & what you do to avoid frustration with failed HF career?
See above
we can stop raising rates now
The good exits seem to be:
- LO PM or sr analyst w/ path to PM (if anyone has intel here, how do economics / comp work in this kind of role?). If you co-run a few $3-4bn funds (let’s say you co-run like 3 books adding to $10bn), and LO charges 50bps (so $50m), do you then get like 5% of that ($2.5m)? If so who gets the rest and what title do you need to be to get that 5%?
- New launch
- Lower tier MM
- FO PM
- c-suite startup w/ equity
- Ur own FO / PA if made enough in MM career
the situation you describe with co-running 3 books - that is maybe the 0.01% of the LO world. More like 5 people co-managing $1bn fund, with supporting team. good LO comp is high 6 figures.
People leaving to manage their own PA sounds like retirement. Are these guys genuinely treating it as a job/career or just something to do?
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