How is AQR Doing? What are the long-term career prospects?
Heard a lot of things about AQR in the past few years - does anyone have insights on how they are doing and if its worth taking an offer from them?
Trending Content - Hedge Fund Forum
| +19 | Buy Side Credit - Seats / Guide | 4 | 6h |
| +18 | How much modeling do experienced HF analysts/PMs actually do? | 1 | 7h |
| +17 | L/S Equity Career London | 11 | 4d |
| +13 | Hedge Fund Pivot | 3 | 1d |
| +11 | Mid-career shift to buy side with niche background | 3 | 1d |
| +9 | Wfh / work remotely at MMs or SMs? | 5 | 1d |
| 0 | Hedge funds | 1 | 1d |
Career Resources
I will get a lot of MS for this but whatever - AQR's business model is essentially reputation/labor arbitrage. They hire a lot of kids out of top tier universities with PhDs or Ivy League bachelor degrees and then advertise their root in academia etc to gullible allocators. In reality, like the poster above said, they do the same smart beta stuff that DFA or JPMAM can do for 1/10th of the price. Sure, they have a sweet gig that pays well with strong name brand for someone out of undergrad, but don't fool yourself and think you are working for a elite quant firm adding much value for your clients.
I would generally echo this but with less negativity. I know a lot of people at AQR. I don't think they're trying to "fool" anyone. They do really believe in their academically minded approach. The fees for most of their products are quite low. AQR also has dozens of strategies. Their bread and butter is and was factor based equity investing (much of that aum is in long only strategies and so will be lower fee).
They hire lots of smart people to do research but are generally quite conservative in making any big changes to their strategies. This is something they pride themselves in as they don't believe they are in the business of creating black box strategies. The point of the researchers is honestly more to continually test their hypothesis for whether the strategies will deliver outperformance in the long term.
I would say it's a great place to learn and everyone in the industry would respect your experience there. You would likely not have any trouble getting interviews at citadel, two sigma, etc. but it is probably not a place where you'd want to spend your entire career if you're looking to become a PM to make 7 figures or whatever. My friends who are VPs there really like it, they get to do interesting work, pretty relaxed hours, etc. It depends what you're looking for.
The fact that AQR strategies are "low sharpe" aren't really telling a secret. They're supposed to be somewhat commoditized straight forward strategies
Second what DeepLearning said. I am continually surprised at how even experienced people in this industry tend to lack breadth and knowledge on the broad industry.
First of all, AQR is not just a single fund. It is firm that has somewhere between 30 - 40 different funds, each specializing in its own set of strategies. Many of these are essentially running some form of risk premia strategies, which are designed to have low costs and high capacity, and provide betas and not alphas. These are the ones which have really suffered in recent years.
This is the reason why funds like these charge only 1% management fees and no performance fees. They do not aim to "outperform", instead they track premia like value, momentum and quality which are well known, and backed by much academic research. Naturally when these factors underperform, the funds tracking them will suffer as well if they are actually doing their job.
This is in contrast to those sub 10B funds that seek to provide alphas, i.e uncorrelated returns, but have much more limited capacity. They also charge investors a performance fee and often higher management fees than the above. Those are the ones who are worth roasting when they underperform through an entire market cycle and suffer massive drawdowns during quant crashes.