Is the best career move SM then MM?
SM is lower volatility of earnings, while MM is more upside but easier to get cut or fired if PM loses money. Wouldn't the best career option be go to a SM, get paid in-line with IBD/PE for a few years, save up a some fallback money ($5 million?), then move to an MM as a snr analyst or PM? That way, if things don't work out you still have some savings, and if things do, then you capture the upside. The downside is your PM progression is later than someone who joins P72 academy out of undergrad, but you preserve a little more optionality and hedge your career to an extent.
Look at the large platforms, junior people with talent won’t get fired if their PM blows up, so I’d say there’s less risk than what’s perceived. Sure maybe the junior at Exodus or something is in for rough ride
I wouldn’t say there’s real comp upside vs being at a SM at the junior level at a pod (roughly similar in all circumstances), nor would I say there’s real stability upside at the junior level at a SM vs being at a pod (roughly similar in all circumstances). There’s a ceiling on every junior person’s bonus: at every fund. Everyone overstates the stability point. What you’re missing is after 4-6 years of being at a pod, you’re ready to be senior analyst and start managing a carve out, which if you’ve been in the model for the previous 4 years and are good, you can scale pretty rapidly ($0 sleeve to several hundred $MM of exposure in less than a year kind of ramp). I compare that to someone who did maybe 4-6 years at a single manager, doesn’t understand the risk model, had a longer term style and now needs to adjust, so it’s just harder to ramp up/hit the ground running/make your way to PM
Definitely doable, in fact my PM came from a single manager a while ago, but many of these thoughts come from him. Obviously there are pros and cons of both, you can’t really go wrong, but I would just rather live and breath the model so I can hit the ground running when I get a carve out
In modern times these previously accepted axioms that SMs are more stable and MMs have more upside are so incredibly PM dependent it is generally useless to try and paint broad strokes.
What’s changed is there’s fewer SM seats with a real partnership path and genuine AUM/biz momentum compared to pre 2020 (but that doesn’t mean there are none). Also - whereas a podshop brand in the background was historically seen as ‘lesser’, its now neutral to positive (being on a team that blew up at T4 MM is still seem as good brand - likely because it’s more clear/consistent that juniors get reps there and their success nabbing post-IB people which looks a lot different than 10 years ago)
There are many a pod PM that churns juniors - if your PM blows out before you get to a sleeve but after you’ve sector-specialized it’s not gauranteed you get to stay.
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