Smaller quant hedge funds in NYC/CT
Excluding the top 15 quant HFs, how can I find smaller shops in NYC/CT?
My background - engineering degree, started in tech for 6 years, landed a developer/research role at a quant hedge fund for 4 years, switched to research at an AM for 5 years, now looking to go back to a HF for a QR role.
The top tier quant shops are unreachable and I'm not keen on taking an engineering/dev role to have a chance at an offer.
So my question - how can I find mid and low tier quant HFs in NYC/CT that might be hiring?
Depends on your definition of "quant" of course, but really, once you get out of the top 15ish quant funds, most of the others aren't worth pursuing. They're too small to have enough assets to pay you well, and they're too small to have enough resources to build/buy the best data/tools/talent/infrastructure so it's hard for them to ever do as well as the big names so it's hard to escape that stage.
Do you really need to work at a HF though? You mention you're in a research role at a asset manager; plus you surely know that most banks have quant roles too. Arguably those bank roles are "lower tier" and might fit your profile.
You mention the top quant shops are unreachable -- but with your background I think you'd get a ton of interest from those funds for quant dev roles. Most of them wouldn't hire you as a pure quant unless you have a PhD, but does that really matter to you? You'd be working closely enough together that the distinction between those two roles is often not that great.
A bit of nuance from my small experience : I think smaller HFs are worth pursuing.
I have been at tier 3/tier 2 quant HFs (I had never heard of them before joining) and still very interesting job.
Ofc earning way less than at the top funds, but still earning more than quants or sales/trader at banks. And if you love investing it is a no brainer vs a bank, also less politic
How to find them: I would try headhunters qnd network.
Good luck
There's probably more chance to be tied to the pnl of the strategy at smaller funds than at the 'top' funds and hence paid more assuming you do well. And many roles at 'top' funds are siloed so you don't get to see the whole picture.
Maybe, but the problem with small funds is how can they do well when they have fewer resources that the top names? What's their edge? Citadel can outbid you for top talent, faster computers, better IT tools, more datasets, etc so how can you find better trade ideas than they can?
And "you get to see the whole picture" at a small fund sounds nice, but the flip side is it means there's little or no support staff, so the PM spends 50% of his time on stuff that isn't related to trading (compliance audits, dealing with the prime broker to get better leverage, reconciling trade discrepancies, tracking down why your PNL statement doesn't include the dividend you thought you were going to get, dealing with the IT guy to ask why your data isn't getting updated, etc) but the guy at Citadel has a support staff to handle all that so he's devoting 100% of his time towards coming up with new trading strategies, and how are you going to compete with him when you only have 50% time?
Finally -- even if you do come up with an amazing trade idea, citadel has more capital to invest in it than your small fund, so you might not get paid as well at the small fund. A 40% return on Citadel's multi billion dollars is a lot better than the same 40% return on your startup fund's $100 million dollars.
A lot of smaller funds are simply spin outs or seeded by multi-managers so while they have their own legal entity, practically speaking they are just another pod within a MM. Since we are talking strictly quant, Citadel GQS is siloed structure, so you won't see the whole picture. You might be right for their pod teams but those are non-quant.
It's true that the biggest firms have structural advantages at this point that allow them to dominate most of the smaller players. Any mature industry will be like that. However, the firm's profitability is irrelevant for most employees there (anyone not a PM or senior management), who get paid their replacement cost. I think it's correct that a small firm is more likely to give you access to all the code and a share of the total pnl, but the firms like this that are successful hardly ever hire anyone.
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