I’ve gotten asked this question a lot: How to get more assets if you are running a book at one of the multi managers?

There are 3 keys
1) performance – most multi managers are running a heavily levered strategy and as a result want you as a PM to have low volatility. Therefore targeted returns are around 10% in a market neutral, low vol strategy. That sounds much easier to hit than it actually is. It is so difficult because you can’t have any large drawdowns in between.

2) Team – you need to build your team. Citadel and I’m sure the others are the same won’t let you grow your assets unless you have analysts. There isn’t a rule of thumb on how many you need, but you have to have more than 1 to get significantly over $200mm in assets.

3) Follow the rules – as a PM at a multi manager you will be given a strict set of rules. You need to follow these rules and not test out the risk department. Rules will include net levels, gross and net levels within sectors and subsectors, draw down periods (ie you can’t lose more than 2% without cutting your gross exposure). You also need to make sure your hit rate (% of time you make money) stays above 50%, and cut your losers fast (slugging rate).