Going from fresh-out-of-college, brand-spanking-new analyst to running an investment team as a portfolio manager at Steve Cohen's Point72 isn't a linear path with obvious checkpoints.
That's something Jaimi Goodfriend, the firm's head of investment professional development, stressed in a conversation with Business Insider — there's not some plug-and-play plan that magically turns analysts into portfolio managers in a set number of years.
But the firm has dedicated substantial resources to training the next generation of investment leadership at the $16.3 billion hedge fund based out of Stamford, Connecticut. In a conversation with fellow billionaire hedge fund manager Paul Tudor Jones at the Robin Hood Investment Conference in November 2019, Cohen said "it's hard to hire people, and get it right," but the firm has "always been focused on" career development.
"Any resource I can provide to my people, I will," he said.
The resources begin with the Academy, which Goodfriend runs. The 10-month program for soon-to-be analysts was set up in 2014 when they realized the best talent from universities weren't always ending up on Wall Street.
The Academy started as something only for recruits just out of undergrad, but has now expanded to more young people starting their career in the investment management space. Many will have banking backgrounds, but Goodfriend said the firm has had a recruit that used to work at the White House and currently has a Navy SEAL in the Academy.
It starts with 10 weeks of what Goodfriend calls "hard skills" — learning how to model, how to analyze companies, accounting, and certain data-science techniques. Then recruits will spend time on different teams, getting work in different industries under different portfolio managers.
If you graduate the academy and become an analyst on a team, you'll continue to get coaching from Goodfriend's unit, the investment professional development group, with coaches leading sessions to fill in the gaps on investing techniques that analysts aren't already learning from their portfolio managers and senior analysts.
"Your primary mentor as an analyst should be your portfolio manager," Goodfriend said.
But where your career heads is up to you. The firm values its senior analysts, and finds the role calls to many new recruits.
"We need senior analysts to be successful at this firm," she said, noting that people take pride in being seen as an expert in their field.
"Steve would like an analyst to be here for a long time. Being a senior analyst as a career here is rewarded and celebrated."
But for analysts that do eventually want to lead their own teams, the firm operates what it calls the Nines program — a 10 would mean a person is completely ready to be a portfolio manager — to get wanna-be PMs ready.
It's not the only way to become a portfolio manager at Point72. If a portfolio manager is brought in from outside the firm, they don't need to go through the program, which takes months on average, according to Jonathan Cain, a managing director at Point72 who helps run the Nines.
Even internal candidates can become a PM without going through the program by running their own book under a long-tenured portfolio manager and getting mentored by them along the way.
But the Nines program covers a lot more than investing techniques, Cain said. A big focus is on managing people, building the team, budgeting the group's expenses like trading, and measuring risk.
"We want it so they're not building the plane while flying," Cain said.
The firm considers it a "finishing school" for soon-to-be portfolio managers, and has even noticed how outside portfolio managers who join the firm end up wanting to spend longer in the program than they initially planned.
"The whole idea is to be careful, very thoughtful," Cain said.
"Talent is really scarce, and we want to put them in a position to succeed."
There's no set amount of time an analyst has to be in their role before they can progress to the Nines program, Cain said, but "the more experience, the better." The firm tries to impress on all the new recruits in the Academy that there isn't a checklist that will get you to the top.
"Putting a time stamp makes people focus on the next thing on the checklist," Goodfriend said.
"It's a much longer process and more involved process than just checking off a list."
Beyond being a top number-cruncher, Cohen is looking for investors that are creative, according to his conversation with Tudor Jones last year.
"I want them to be idea generators. I want them to think about businesses as businesses," he said.
"You know, running a business is very much different than trading the stock or investing the stock. And I want my people to think about it how a company CEO would think."
