Quant hedgefund vs. consulting firm after PhD?
Hi all,
I am a PhD student graduating this year from a Quantitative background. I have taken financial engineering classes and statistics classes. And since I have done a master somewhere else, so I am relatively older than other PhD graduates.
The natural places to go are the Quant hedgefunds or Quant prop shops. They hire a lot of high frequency quant analysts these days. I could also potentially land a job as sell-side Quant in a bank, since I had internship experiences. But those jobs are boring.
However, I feel in these jobs I face only cold computer screen programming everyday which will make me more and more nerdy. The reason is that in order to be successful in this field, you have to spend after-work hours thinking of your trading strategies and programs, which is still facing the computer. I desire to have a job that has more flavor of interacting with people. Interacting with people and making friends generally make life happier.
Ultimately I strongly desire to be an investment guru and fund manager. It looks like PE shops are a comparable career destination. However, PE requires the smart MBAs, not the dumb PHDs. It's impossible for me to step into PE at this moment. The only possible way of getting a job that has more human interaction is to get a consultant job. There are consultant firms that at least hire some PhDs. Hopefully the consultant job could potentially lead me into the PE world. I am also pursuing a CFA, and hopefully I could avoid doing an MBA, because including the preparation and application time, etc. getting an MBA at mid-30s is no fun! :=(
So my questions for the experts on this board are:
- Is the consultant route the best way for a PhD to go to PE?
- Will the consultant + CFA allow me to avoid the mid-step of MBA?
- What type of consultant role will be the closest to PE?
Please kindly shed some lights on me. Thanks so much in advance for your enlightening opinions and suggestions.
wow you have the perfect background to get into derivatives trading or structuring (when the dust settles)- also, quants in exotics who build the pricing models work on the trading floor so there's alot more interaction with other people than you think (plus the pay for quants is stratospheric at senior levels, on par with MDs in trading)... basically everyone on Wall Street stares at a computer screen the better part of the day, so programming will not make you antisocial- even though debugging is incredibly annoying, my sense is that writing code is one of the most creative and challenging jobs there is (in addition to graphic designers, musicians, etc.)...
Consulting is a broad field and I'm not sure if you're thinking management consulting (e.g. McKinsey, Bain, BCG) or economic consulting (e.g. NERA, Brattle, Cornerstone, etc.) Economic consulting has a lot more PhDs and the work is probably more challenging (a lot of econometric modeling). But working in litigation, on behalf of lawyers, is boring. I know McKinsey hires a bunch of PhDs for their New Jersey office, but I don't really know what PhDs do over there or why one would need advanced scientific training to put together power point presentations and do telephone surveys.
The quant field is undoubtedly the future of finance and you already have the premier designation to work in the field- I would think the barriers to entry are high for others and if you can pair that with strong business skills (like the CFA), you'll be on your way to an interesting, high paying career.
Thanks a lot MichaelHutchens for your warm encouragement. I agree that an exotic derivative trader or a structurer could be a possible route. But first of all, I doubt exotic will come back again in the next 5 years and I don't have 5 years to wait. Secondly, the job doesn't really make social impact and is far from business. It's more interesting to help a weak company turn into a strong company, and to turn a good company into a great company, which "supposedly", could be done thru Private Equity. This is the social return side. From the personal return side, you also have carry interest, which could be more cash than being a sell-side guy, as well as meeting with more people, which generally makes life happier. In the far future, with the business skill we've accumulated, we could open our own business and explore many fun ideas.
I am not sure how to acquire these types of skills thru being a derivative trader or structurer.
Are you saying that a sell-side derivative trader or structurer role could also eventually lead to a buy-side PE role?
have you considered being a quant trader?
Yeah, there are quant trader positions in a bunch of quant hedgefunds, banks, and prop shops. The high frequency trading recently became the buzzwords. However, this is really the programming work. I admit that I equally love programming&math, exploring trading strategies, as well as interacting with people. However, to really succeed in this trading strategy arm race, we will have to spend 14 hours a day staring at computer screen, and thinking hard about improving trading strategies. I think these types positions have even smaller human interaction than the sell-side trader and structurer.
Why did you get a PhD if you have no interest in the field?
I enjoyed my PHD and enjoyed the time spent in front of computer and doing math. But now looking back, I wanted to get more human interaction and more business side, nothing wrong with that, right?
yea, nothing wrong with your wanting to, but what matters is your being able to. who's gonna hire an engineering Ph.D. for interacting with people?
I think if you want to go into the business side, working in S&T in banks or HF is not the way to go. They are completely different jobs and require different kinds of skillset
I'd say the best option now is to try to get into strategy consulting as part of their PhD intake. Going to PE after consulting should be a natural route.
where are there good quant phd programs?
Getting a PhD in math or comp sci is brutal. Unlike law or business schools, or masters degrees, getting PhD in these fields require a strong background, good recommendations from professors, and possibly some research experience or publications. One can graduate from college, work a year and then decide to go to business/ law school. There is no such luxury for getting a math PhD from Princeton. You'll prob have to decide that's what you want to do by junior year and work towards getting admitted.
The good programs are at the top schools in the country. For math, Harvard, Princeton, Chicago, MIT, Stanford, Berkeley etc. Largely similar list for comp sci, you can add CMU, Caltech. I've probably left out a few really good schools. But it's hard.
Your best bet would be to work for a Growth Equity fund in tech or biotech. The people-facing, business-improving work the OP was seeking will at least match the level you would find in PE. Also, PhD's of all technical varieties are generally prized in VC/Growth funds.
did you decide are you still deciding? i think your expectations are pretty off ... quant HF do not spend 14 hrs a day grinding like IB. whereas most PE types probably do spend 14 hrs a day grinding away on excel spreadsheets not the wheelin and dealin u might imagine. likewise consultants probably spend a lot of time front of the computer too. also your job probably won't solve your social life. hope you did some more DD.
Why did you get the PhD if it sounds like you want to do consulting....?? I recommend going into the quant groups at management consulting firms, BCG and Bain have them.... they do statistical modeling for clients
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