Small Prop shop vs BB middle office quant intern
I've received two internship offers, each with its own set of pros and cons, and I'm not sure which one would better prepare me for a full-time role at a better buy-side firm after the internship.
Offer 1: Quant Intern at a Small Prop Trading Shop(AUM ~500million)
- Pros:
- The project sounds quite interesting to me, focusing on equity.
- The mentor comes from a first-tier hedge fund with more than 10 years of experience.
- Cons：
- No Brand Name
- Uncertainty about the company.
Offer 2: BB Quant Intern (Quant Researcher - risk team)
- Pros
- Big Name on the sell-side, good for building up the resume?
- The return offer rate in this group is high
- Cons
- The project is less exciting
- It is a risk quant intern.
I'm leaning towards opportunities that would better prepare me for a full-time role at a buy-side firm after the internship. Any advice would be much appreciated.
What’s your personal beta? That answers this question.
Prop = more desired | higher career risk
SS = less desired | lower career risk
Assuming all else is equal, the upside is your estimated level of job satisfaction. There’s no right answer.
Something to note. Recruiting for buyside is going to be absolutely brutal. There are almost no seats. Your internship experience will not be your differentiating factor.
what? recruiting is as aggressive as it’s every been
The quality of small prop shops is widely variable so that is an important factor although likely hard for you assess. Is the prop shop 500MM AUM all internal money (typically the case for prop firms) or including outside money like a hedge fund? Unlike hedge funds 500MM is small to medium for a prop shop and enough capital to support a lot of high frequency futures/equity trading even if it wouldn't be enough to support some of the more bank like trading some of the bigger prop trading firms have expanded into. As they don't invest outside capital most prop firms start with fairly limited capital from the founders or occasionally outside equity investors so getting to 500MM capital would likely indicate at least a few years of success for a prop firm while a hedge fund might initially raise 500MM. If the money is all internal I'm somewhat surprised they were willing to tell you AUM as most prop firms unlike hedge funds don't disclose that unless necessary for regulatory reasons or to issue debt which I have only heard large prop firms do. Annual pnl (also called net trading income) is perhaps a more relevant metric for prop trading firms although not something most firms would disclose to an intern candidate either.
Super helpful! Thanks for your comments. The estimate of 500 is very rough and just for reference. But They should be at hundreds of millions level with all internal capital.
Then the prop offer seems reasonably promising assuming firm performance and culture are decent. Ideally the firm would be reasonably quantitative with quants consider a profit center instead of a cost center to support traders but even otherwise it's probably more attractive than being a risk quant. Of course everyone has different preferences and some people will be content with the risk quant compensation and happy to have less stress but I think i would get too bored being a risk quant and struggle with the bureaucracy of being in a supporting role in a BB.
Offer 1 and it's not at all close
Take the prop and focus on learning as much as possible. You'll be set up well for FT quant research/ trading roles.
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