Front Office Quants (strats, AES, MSET)
Front office quants(strats) are becoming more popular and less akward than the traditional foreign PhD guys without a life. But what are the different groups called and a small description of their tasks? I have only met personally the GS Strats group but know of the following:
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Goldman Sachs - Strats - Those that would wok for Jane Street or other highly selective prop shops/HFs but slightly better rounded and not focused only on their job. A good strat cannot be distinguished from a trader. They trade and provide strategic assistance to outside clients such as power companies and internal traders by solving quant heavy problems.
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Credit Suisse - AES
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Morgan Stanley - MSET
Citi has a quant program, but do not know the name.
What about JPM, BofA, UBS etc? Any traders here interact with the groups directly at work?
We have quants and strategists all over the trading floor. I'm sort of a wierd mix of desk programmer/quant. Almost all of our quants have PhDs or several years of work experience under their belts in analytics or perhaps research. It's not something you can typically get into straight out of undergrad.
Having a combination of decent communication ability and exceptional quantitative skill is always a valuable commodity.
If you want to be a quant, either get a math or physics PhD or work in analytics at a major bank for three or four years. And develop your programming skills. Having a background in algorithms, architecture, or machine learning would be pretty darned helpful.
CS has Quant Strats for Desk Quants, AES is primarily algorithmic I think.
If you want to work on a technology product for buy-side firms, I think Bloomberg or a similar research/analytics service would be a great place on the tech side to start down the quant path. You have to be involved in pricing and/or portfolio analysis rather than execution.
But usually, people wind up as quants because they screwed up somehow. They thought they wanted to be programmers, but found finance way too interesting. They wanted to go into academia, but didn't want to play politics. They had some other idea for their careers and wound up as quants by accident. :D
Well the best discoveries are by accident (or when your grant proposal gets approved), those guys don't complain about comp. Well as long as they have access to P&L... I dont know how exactly these groups do run a P&L, the GS group does its own trading so they are just more quanty traders. So it almost seems like a step above trading and not the traders private slave like an MO IT/quant.
The GS Strats group is broken down mostly equal parts Phd MS and undergrad. I already hold an MS and BS in engineering and comp sci, working on the experience part. GS Strats recruits at my uni and they go for both the PhDs and undergrads but are advertised more heavily to the undergrads.
A FO quant job would be ideal for a quantitative background that has interpersonal and communication skills on par with non quant target majors, not the standard BO quants whos jobs are darn boring and they are quite awkward. Its also a better fit than a standard trading role.
So what are the names of some of these FO quant groups?
Not true. Model vetting is BO, and Risk Methodologies is MO.
strats is FO
mset isnt a quant group its a sales group for mset's electronic eqty trading platform gset is the same thing at goldman
good work son
MS group is Morgan Stanley Strats & Modeling (MSSM). Citi had a 2yr program (1yr quant + 1yr trading) as recently as a year ago, but my buddy there told me they were thinking of making it a pure quant program (word of mouth).
This thread has some gold nuggets of information, but also some stuff I don't agree with. A lot of these groups do hire undergrads into meaningful roles (that is, not mere model maintainance and optimization, but actual model development). The difference between a PhD Quant and an undergrad Financial Engineer is that the former does original research in these fields, while the latter's role is more to learn and implement (not invent). The difference between the former and the latter is not the quantity of the information they possess (it's perfectly possible for an undergrad to know just as much math as a PhD), but rather how comfortable they are with that math. When tasked with a valuation model for asset X, a PhD hire might read a paper and immediately go, "Oh damn! There's a better way to do the same thing" or "Shit...this is not entirely correct. I can arb this by isolating variable P", while an undergrad Financial Engineer will go, "Cool! I understand this math. I can implement it :D". 5years of doing the same math makes a world of difference to how intuitive things become.
Well, to be clear LTV, I've met quants who don't have PhDs. All of them have paid some sort of equivalent dues to a PhD, but there is a path to being a quant without getting a PhD.
Fair enough...agreed. I just want to make it clear to the OP that that path involves becoming as comfortable with the math as a PhD who did his thesis in that field. It's not a defined path in terms of time-period or seniority, but rather a function of your appetite to learn and, to some extent, intelligence.
I agree with this. And that path is:
Be an expert C++ programmer, and learn a shit load of stochastic calculus. Of course you also need to convince the interviewer that you possess these skills.
Is it possible to work on a structured products desk without having strong programming skills? Would that be more of a sales type role or would you still be involved in origination?
Sure. I know a guy with a degree in Finance from GWU who started in Structured Sales at GS.
I think you need to be a little better at listening to clients and you need to be able to think a little bit more outside the box than the average salesperson. My understanding is that clients will come to you with some risk or some problem that can't be solved by liquid products. So part of your job is to help invent the contract that will meet their needs.
Thanks "IlliniProgrammer". Do you have any idea what the division is called at GS. Is it the strats team? I've been trying to figure that out but the role descriptions are pretty cryptic!
UBS has their own quant trading group. Cash Equities Quantitative Trading for each region.
I have one correction to make; Morgan Stanley Strats are called Called Strats not MSET. MSET is an entire division that supports electronic trading through MS. That being said they also have MSET Strats within their team.
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Do not delude yourself into thinking that being a strat is "almost like being a trader". It's not. A strat in it's current form is mostly a glorified salesperson, so you have to be comfortable with that idea. Migrating into an actual sell-side trading role is unlikely (different skill set), but you do build connections on the buy-side.
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