Places to start out as quant PM
Hi,
I'm thinking about which MMs might be suitable for the first position as a standalone quant PM. This is after having worked as a researcher/sub-pm for about 7 years, with experience in researching and running a successful strategy. It seems that some funds have very high requirements on track record and capital managed in the past. From what I heard, Balyasny and Citadel need you to have generated 50 mio per year to consider you for a PM position. So I guess at these places I would only have a shot as sub PM, though at least for Citadel I have the impression that Sub PMs can get large allocations. To add some data points myself, I have two connections with similar backgrounds as myself, who got PM jobs at Cubist/Point72. They are quite happy in general - maybe some complaints about infrastructure, but I guess that's common. I have also heard of someone who got a standalone quant position at Millennium recently after 5 years experience as a quant researcher in a collaborative fund. I found that surprising as I had the impression that Millennium would only consider experienced traders for such a position. I also had some more casual discussions with a business development guy from Exoduspoint, and it seems they would at least consider me for a PM job, but I haven't taken this further. I know some discretionary fixed income people at the firm who seemed to be disappointed with infrastructure and extremely tight risk limits - stricter than other places. Would appreciate any comments on which places might be good to start out as a quant PM. Thanks
I have some experience with a senior guy at Exodus Point, and they seem to be a very strong shop. I would also look at Brevan Howard.
Have you considered BH's new systematic group or Graham?
Is going the Quant PM role at these types of hedge funds common for people who were Quant Traders at market makers? I haven’t heard of a lot of people exiting in this manner but unsure.
When OP says MM, he's referring to multi-manager, not market market. That said to answer your question, I have seen people move across time horizon from high freq to low, but more frequently the other way around. And I haven't personally seen examples at the senior/PM level
Besides Citadel (the hedge fund not market making operation), all large MM HFs are pretty much the same on quant infrastructure (it's ok but not very impressive). Their bread and butter is a fundamental L/S PM in FI or Equities. All their (legacy) back office, operations, and IT services were built around this archetypical PM. Citadel is ahead because they've continuously invested massive quantities of money into improving their back-office technology and IT infrastructure. If you're a quant PM, you're going to have to make compromises to your process in order to shape your square peg to their round hole. Some examples from myself and colleagues in other pods when I was employed as a quant at a MM HF in 2019:
1. not being able to trade last day swaps during a CFTC spot limit window because the risk system can't aggregate all the PMs positions into a single real time tracking system
2. not being able to send/modify orders on an entire universe of futures at a frequency greater than once every 60s because it would overwhelm the middle-office operations system.
3. The AWS bills are astronomically high because the only supported configuration is spinning up a single powerful instance that runs 24/7.
If you really care about quant infrastructure you can try for a job at certain prop trading shops. While their bread/butter is market making, many prop trading shops have set up medium freq quant trading pods that are allowed to hold overnight risk. The disadvantage is that the drawdown limits are much much tighter than HFs especially on overnight risk, but the payout ratios are also much higher (think 30-60% rather than 10-20%). Examples are DRW, DV trading, Jump etc. They are basically versions of MMHFs except they have no external capital, much higher quality IT infrastructure dedicated towards quants, higher payouts and tighter drawdown limits.
Great answer, many thanks. I have the impression that some MMs have very high requirements for past track record. For me, this would be the first standalone PM position. I have successfully worked as a quant researcher for several years and now my role is basically that of a sub PM. I don't think this would be anough to get a PM gig at Citadel for example, but since you worked at an MM maybe you have some Intel on which MMs might be suitable for the first PM role?
My infra requirements are not too crazy - this should be manageable for all of the big MMs
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