How to get a job at Balyasny, the hedge fund hiring quants
If you want to work for Balyasny Asset Management (BAM), the multistrategy hedge fund founded over 20 years ago by ex-Schonfeld portfolio manager Dmitry Balyasny, there are plenty of people you can approach. Speaking on a podcast released this week, Balyasny said that as the firm expands, it's beefed-up its hiring capacity.
BAM now has "over 50 people" hiring, onboarding and nuturing its portfolio managers, technologists, data scientists and others, said Balyasny. The recruitment function is run by Jennifer Blake, BAM's global head of business development, who joined from Morgan Stanley in 2008. Blake has helped build BAM into a firm that employs 2,000 people in 15 offices globally, up from the 21 or so people that worked there when it spun out of Schonfeld back in 2001.
"We’re a multi strategy multi portfolio manager trading and investment firm," said Balyasny, for anyone unfamiliar with the set-up. Originally focused on fundamental equity long short strategies, the firm has diversified. These days, fundamental long short only accounts for 45% of the risk (the equities boss just left amidst languishing returns) and businesses have also been built across macro, commodities, and equity arbitrage. The current focus is quants: "We're in the process of building out lots of quantitative strategies," he adds. The commodities team is expanding too.
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Hiring portfolio managers isn't easy, but Balyasny says hiring quant portfolio managers can particularly hard: many quant PMs have two year non-competes, and then it takes another year for them to settle and build their team.
On the flipside, if you're a quant it's easier to join BAM than a smaller fund without the right technology of infrastructure. Balyasny said many traders - quant or otherwise - who would previously have struck out on their own are choosing BAM instead. Building your own fund, "doesn’t really make sense 99% of the time.”
Graduate jobs at Balyasny Asset Management
Like other big hedge funds, BAM is growing its own talent. This year, it hired 120 interns across all departments; around a third of them typically become employees. Training-up recent graduates makes sense: "The teams have had time to battle test them before they hired," said Balyasny.
If you're too long in the tooth for a graduate job, BAM also runs an analyst development program for young analysts from banks with "a couple of years on the sell-side." They go through a six-month development program where they're taught "all hedge fund equity investing skills" and matched up with appropriate teams by sector.
Portfolio manager jobs at BAM
Blake's team are also continuously looking for suitable new portfolio managers, particularly talented portfolio managers unhappy at rival firms.
Balyasny says they hire "talent" but not necessarily the finished product. - The firm runs a two-year portfolio manager development program through which it nurtures people into becoming a full PM. Often they will take a number two from a top performing team who's ready to become a number one, says Balyasny. "Typically, they'll know stock picking, but they won't know portfolio construction. They might've not had a lot of experience to trading. They probably wouldn't have managed a lot of people before. So, we coach them on all those aspects."
Nurturing not churning
While some hedge funds have a reputation for churning through portfolio managers and applying seemingly arbitrary loss limits, Balyasny says BAM is about the long term.
Many of BAM's portfolio managers have worked there for decades. When the firm hires, Baylasny says it usually has a two to three-year plan for how the business will evolve. “We try to be a really good partner for people in the best sense of the term," he explains. Collaboration is emphasized, but so is autonomy: PMs are helped to build their businesses; knowledge is shared to avoid constantly reinventing the wheel.
Assets are allocated to individual PMs on the basis of both their performance and the longer term opportunity set, meaning a short term setback might be more tolerated than elsewhere. Balaynasy says PMs are given clear feedback on what's not working and where they need to make a change. But if the "opportunity set" in a strategy has been good and performance has been poor, then individuals might be encouraged to make a change themselves: "Generally we want people focused on the top performers and how to scale them instead of fixing the underperformer," he observes.
Ultimately, what makes a good portfolio manager is the ability to build a good team. This is the number one "gating factor" that limits someone's success, says Balyasny.
He's built teams since the start of his career. This is what multistrategy hedge funds are about. You need to: "Find the larger profit pools, and then you try to plug in the talent."
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