Evaluating a quant hf offer
I am recruiting for new grad quant researcher roles. I recently got an offer at a decently well-known quant hedge fund that is fairly sizable (>$5B AUM) but is certainly not in the usual club of firms most frequently discussed online. I am extremely grateful to have been extended an offer. I can appreciate how competitive the industry is and how few positions there are.
The offer letter states $150k base and a bonus quoted as a range 25%-100% of base. I was also verbally offered a percentage of PnL.
I don't know how to evaluate the offer. I would greatly appreciate any advice on the following questions. Thanks very much for any insight.
- How should I evaluate the PnL cut?
- Suppose I ignore the PnL part. Base + avg bonus would be ~$250k. Is this typical for new grad QR at a firm of this size and reputation?
- Can firms which are not the extremely famous ones, but are still perhaps better reputed meaningfully beat this offer? I'm wondering particularly excluding a first year sign-on.
- I am still in the process with a few other firms, some are top-tier. One option is to gamble, pass on the offer, and try to recruit. Based on the previous question, would this strategy only be declared successful if a top offer were secured? Whatever comp bump from a firm offering only slightly better prestige may not be adequate compensation for the risk?
- What is the job market like for mid-level QRs (2-3 yoe)? New grad recruiting seems extremely driven by school prestige due to the sheer number of candidates. Is mid-level recruiting extremely driven by firm prestige, or is the labor supply low enough at that point where it gets much easier to get a job?
- How much value should I place on prestige? I used to be unhealthily prideful of my school, but I've thankfully mellowed out and don't care for prestige much anymore. However, I do understand that I got interviews likely only because of my pedigree. At a broad level, the HF industry seems extremely meritocratic where only PnL matters, but is this also true at junior levels?
- My main priority is to learn as much as possible, with a goal to understand a certain market in depth. I may not have a choice, but any advice on which products have greener pastures?
- This question is if I decide to continue recruiting. Prop trading and hedge fund strategies appear very different (I guess high-freq vs mid-freq). From an outside experience, I feel an affinity towards mid-freq. But I really don't know jack shit and am trying to keep an open mind towards both. Do people switch between these, or are they largely different tracks?
Not happening, don't count on it.
Also
Any signing/first year guarantee ? Otherwise don't bank on it, assume low end for budget & comps.
If its an exploding offer try to get it pushed a little, and expedite your processes elsewhere by raising that you have an exploding offer. Otherwise in this market, at this time of year.. yeah, you might just have to take it.
Depends, not all roles have easily measured direct PnL attribution at the junior quant level. Lot of vibes still.
Thanks for your comment. Do you think it is worth trying to push for the PnL cut to be in writing? It seems fruitless since they obviously didn't include it in the letter for a reason. Also, I have no competing offer as leverage.
No signing bonus nor first year guarantee. In the future, is it smart or too conservative to evaluate all offers based on the min of any ranges they give? I'm very green and probably put too much faith in people.
250 all in as a new grad working typical hours (50-60 per week) on the buyside is standard. If you’re working more than 60 hours or at a more prestigious firm you can definitely expect 300+ as a first year QR. And the 500/600+ numbers you’ve heard of are true. Generally the market to move is driven by the length of your noncompete and the relevance of your work (how close are you to PnL).
As far as comp you should try to see if you are protected in down years (Will you get 0 bonus). If not then you should be getting outsized comp in strong years.
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