Do quant PMs at MM HFs start out as traders or researchers?
I'm an incoming first-year computer science student at the University of Waterloo in Canada.
My eventual goal is to found a tech startup, but until I get there, I want to get myself on a quant PM track at a pod shop specifically.
To reach this endpoint, should I start off as a quant trader in these shops, or as a quant researcher?
Based on the most helpful WSO content, quant PMs at multi-manager hedge funds (MM HFs) typically start out as quant researchers rather than traders. The progression often involves moving from a research role, where you develop and test strategies, to eventually managing your own book as a PM.
Here’s why starting as a quant researcher is generally the better path for aspiring quant PMs:
Research Focus: The role of a quant PM is heavily strategy-driven, requiring a deep understanding of research, risk management, and infrastructure. Starting as a researcher allows you to build the necessary expertise in these areas.
Linear Progression: Many MM HFs have a structured path where researchers can transition to managing their own strategies. This progression is often more straightforward than moving from a trading role.
Skill Development: As a researcher, you’ll gain experience in developing alpha-generating strategies, understanding infrastructure requirements, and deploying strategies—skills that are critical for a PM role.
Traders vs. Researchers: Traders at MM HFs often focus on execution and market-making, which may not align as closely with the responsibilities of a quant PM. Researchers, on the other hand, are more involved in the full research cycle, which is directly relevant to the PM track.
To position yourself for this path: - Focus on building strong quantitative and programming skills during your studies. - Seek internships or co-op opportunities in quant research roles at hedge funds or proprietary trading firms. - Network aggressively and aim to join a firm with a clear progression from researcher to PM.
Good luck with your journey at the University of Waterloo—it’s a great starting point for a career in quantitative finance!
Sources: Moving from Quant researcher to Quant PM, So you want to be a Quant?, So you want to be a Quant?, How do you become a Quant Trader?, How to be a Millionaire Trader
MM HF QR here.
Typically, you can go from QR to sub-PM within the same pod. This can be a progression from making individual signals to managing them as a portfolio depending on your team composition and structure.
Very rarely have I seen someone branch out to start their own pod under the same platform - typically you will go to another platform to be PM proper. We don't have a strict "quant trader" role so I have no opinion on that. Nevertheless a handy rule of thumb is the closer you are to strategy development and live management the easier it is to be a PM.
An aside: if your end goal is to found a tech startup, why do you want to be a quant? I believe the connections and nature of work in big tech would be far more suited.
Quant pays much better compared to big tech, especially if you're a PM, so I want to accumulate as much money as possible before quitting my job to found a tech startup. This is especially important, as I will only pursue it if I deem the idea to have the potential to reach a trillion-dollar valuation. Therefore, it might take several years for me to find a viable idea to execute on.
Well good thing the quant PM role is basically almost immediately accessible. Definitely don't need a decade+ of experience. It's more of a 'part-time' thing mentally too, you certainly don't need to have your head fully in the game so will leave lots of mental availability for start-up idea brainstorming
I have thought about your points before, and they seem valid setbacks. A counterargument I proposed to myself was that Jeff Bezos was also working in a quant capacity as he developed the idea for Amazon, so creating a trillion-dollar startup idea in the meantime would be feasible, as evidenced by history.
What are your thoughts on this objection?
It was a different industry 30 years ago, it wasn't as desirable / had a lot more misfits, there weren't degree programs targeting the specific jobs in the industry, there weren't hardos like you lined up in their teens asking which boxes to tick to get a seat, etc.. I can go on and on.
Live your life, but if your base case is "I'd simply do a Jeff Bezos", which has an N of basically 1, best of luck in your future endeavors.
Using Jeff Bezos as your reference point is a really good good idea.
Can't say you don't have an ambitious vision: using an extremely competitive career track, that many people struggle to break into and succeed in, as your "day job," until you have a a trillion dollar start up idea.
What is important is that you are reasonable, in that it may take a couple of years to brainstorm a trillion dollar idea.
Have you considered just launching an idea now though? Mark Zuckerberg was able to start Facebook from his dorm - might save you some time here.
I haven't come up with an idea with the same potential as Facebook yet. But if I do, I'll definitely start working on it regardless of whether I'm still in college or not.
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