GS quant Vs QR/QT in HF
Trying to weight the options if being a GS front office quant vs trying the cowboy life in HFs. We are bombarded with stories of crazy pay in MM/prop shops, etc.. and certainly some shops do pay graduates a 2-3x multiplier with respect to pay at GS. But I’m wondering: what about the long game?
The quant mania at funds started after 2008, before which GS had prop groups that made more than enough.
But now it really seems like a strictly dominant strategy to go to the buy side.
Still I suspect that behind the glamour there are a lot of people having high uncertainty in their jobs, famine one year and feast the other and lots that don’t end up earning substantially more than a top performing quant on the buy side.
Does anyone have insights on what happens longer term? What is the average total comp 7-10 years in? What are your thought?
Smoothing your consumption across all states of the world leads to higher total utility
You have to be more specific than GS vs HF quant. The fund matters, MM funds will be pretty different than SM or more “traditional” quant places (I.e., DE Shaw). Yes comp is pretty variable at HFs but you also have to realize that larger/stable funds make a lot off of fixed fees and they aren’t as much “eat what you kill” as a MM at the senior levels. The variability is still there, but the floor is pretty high.
There is also a difference between being an individual contributor at a fund vs becoming senior through managing/running teams (and in those cases being more tied to the overall profits of the fund). Even if you think about citadel, there is a big difference between being on a “pod” and getting paid off of the performance of their flagship. As a “quant” you can have impact through creating alpha, but usually the bigger value is finding ways to impact the overall firm.
So, 7-10 years down the road, it’s way too variable in the HF world to say. I have friends who are at $400-500k after 10 years and others at $5mm.
I would say at 7-10 year you can def be at 400-500k at GS. With very good non manager VPs and regular MDs on 1-2 mil. If you’re hardcore you make it to partner in 12-14 years and you can easily reach 5-10 mil a year. Seems low wrt hedge funds all in all, but the job is way more cushy, especially in terms of job stability.
Bonuses in the best of cases go to 2-3x base below MD. But then bases are good, with MDs reportedly starting on $400k base and PMDs on $950k base.
The point I was making is that you can’t lump all HFs together. As an example, 10 years in my base was $600k at a hedge fund, my friends who were at pod shops were $200k. The total comp for them could be $500k or $5mm depending on performance and the team they were on. For me it was less vol, but higher floor.
The only point I was making, which is why I said you need to provide more info, is that it isn’t HF vs GS, the actual fund (at a minimum type of fund) really matters for this discussion.
Thanks for the perspective!
Less vol higher floor surely sounds more similar to GS. Not sure if you could get a $600k base 10 years in at the bank.
So is it fair to conclude that a non pod shop is similar in style to a big bank, but possibly higher overall?
What differentiation would you think is the most sensible?
Apart from tier ofc which impacts pay quite a lot.
Just pod/MM vs SM or are there other differentiations you’d consider?
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