How to break into the industry (for a non target)
Hi everyone, I am currently doing and internship in private equity secondaries but I would love to break into the hedge fund sector. The only problem is that I come from a non target background. Since I wasnt getting any interviews i created my own research team that creates quantitative trading strategies (vol event driven) thst returned 16.8% yearly and 2.45 sharpe. We use quantum mechanics (feynman path integral, fuorier series) to model exotic derivatives (barriers mostly), and we also work on IV/RV arbitrage. We even pitched some of this algos to family offices look to invest $10-15m (i know it is low but for a student that is already a big success). We did not land any funds but it was a great experience.
Despite doing all this as a student, I constantly get rejected for interviews over candidates that sometimes do not even fully understand Black-Scholes, just because of the name of the institution they come from. If anyone could share any piece of advice to break into the quant trading/HF sector I would really appreciate it.
Based on the most helpful WSO content, here are some actionable steps to break into the hedge fund sector, especially from a non-target background:
Leverage Your Unique Experience:
Networking:
Specialize in a Niche:
Educational Background:
Persistence and Resilience:
Engage with the Community:
Consider Further Education:
By following these steps and leveraging your unique experiences and skills, you can improve your chances of breaking into the hedge fund sector. Good luck!
Sources: So you want to be a Quant?, Ask Me Anything - Buy Side Systematic Quant, How to break into trading? - High quant background?, So you want to be a Quant?, Q&A: Head of Macro Strategy at Hedge Fund Taking Questions
Bumping for a brother
Are you still in school? Do you study math/comp sci/other stem subject? Can you network with analysts/PMs and show them your work? Maybe the issue is also that you have secondary internships but want a quant internship, so no relevant formal background. If I were you and you are sure that you know your stuff then speak with PMs/analysts, etc. and show them how you can add value. If you can add a lot of value then it doesn't matter whether you went to harvard or alabama. Unfortunately some funds are just sticklers for "target" schools but there will be tons of people out there who would be willing to give you a shot.
To answer a couple of your questions, yes I am still in uni, I just finished first year of university. The thing is I study business administration even though I really like quant finance. I really know the theory, otherwise I would not attempt to pitch algos to professionals being so young, but the thing is that it is incredibly hard to find people willing to give even 5 minutes to listen to some random kid that does only math based algos from a random uni in Spain(my uni is not a bad one at all, and I have good marks, it is just not top tier).
In this research team that I have created, called FX Capital Research, my partner focuses on long/short fundamental and in my internship I also learned about special situations and restructuring, something that also seems really interesting, specially because you can find a lot of good opportunities in some markets due to low analyst coverage.
I also have strong fundamental knowledge (400 IB questions, and read many books) and also intermediate knowledge of programming, so it is not like I am just interested in quant and only apply for quant roles, I try to network with basically everyone in the industry(from HFT, to fundamental long only) but I just get no answers/interviews no matter how hard I try.
Someone else can help you better with quant stuff, but I had tried recruiting for quant as a math major in college years ago before realizing it wasn't the best fit for me. From my experience, 1) most quant firms prefer stem subjects (everyone at the interviews/office visits I went to was a math/physics/comp sci major); 2) it's great that you made some algos, but is it scalable at an institutional level? Either way that shows initiative and is helpful while networking; 3) fundamental knowledge is useful but not needed; you need to understand options/option math, etc.
Just keep emailing people and asking to network. It's a numbers game. Also, it's the summer, and Europeans are notorious for going on long summer breaks, so be a bit patient with timing.
Well most of my algos are only for institutionals, because our exotic options research applying quantum mechanics cannot be executed unless you can afford to have a trading desk to negotiate OTC. All of our strategies are institutional. Our most profitable by far is the event driven IV inefficiencies (the one of the 2.45 sharpe). The thing is that sometimes we lack resources to do further research or solve some of the PDEs because we cannot extract the data, since it's not free. What type of event driven fund do you work at?
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