Is S&T to Macro Hedge fund still a thing?
Above question - curious because I'm reading that banks are more and more just market makers instead of taking risk, making it difficult to make those transitions difficult.
Also a little unrelated, I'm wondering what people think about the future of Macro Trading with AI. I have read that it can be a positive and a negative. Negative is obviously the models can replace humans trading and analysis but if a lot of them are similar enough that creates overcrowding in certain areas and that results in oppurtunites for people smart enough to observe that.
Based on the most helpful WSO content, transitioning from S&T to a Macro Hedge Fund is still possible, but the landscape has shifted significantly. Banks are increasingly becoming market makers with reduced risk-taking capabilities, which indeed makes such transitions more challenging. The downsizing of S&T desks and the focus on automation and e-trading have further narrowed the opportunities for traders to showcase the kind of risk-taking skills that hedge funds value.
Regarding the future of Macro Trading with AI, there are both opportunities and challenges. AI can enhance trading strategies by processing vast amounts of data and identifying patterns that humans might miss. However, as you mentioned, the widespread adoption of similar AI models could lead to overcrowding in certain trades or strategies. This creates opportunities for those who can identify and exploit inefficiencies caused by such overcrowding. The key will be understanding where the edge lies and leveraging unique insights that AI might not fully capture.
Sources: Is S&T still a good career path?, Q&A: The Future/Current State of S&T - BB VP Macro Trader, Global Macro Hedge Fund is Paradise, Q&A: The Future/Current State of S&T - BB VP Macro Trader
bump
Yes absolutely. I’ll let someone else take the 2nd question.
So to ur first question, I mean I’m a junior still and all the pings I get are from multi strat and macro funds. Actually haven’t gotten too many inbounds for other sellside roles so that should tell u a lot about buyside hiring from sell side. The buyside from a risk reward perspective is very poor for juniors because there’s only a very small chance it works out and ur pay is not that great either cus ur pm takes most of it and it’s discretionary.
On ur second question, given the state of ai now and the market structure for macro products, I would say trading or risk taking is very far removed from automation. This might sound counterintuitive but the management of liquid risk and flow in size is not a typical office job and requires a lot of intuition and relationships. By the time ai is advanced enough to automate risk taking, all other office jobs would be gone by then so not sure if it’s really worth thinking about. Cus would you rather make slides or excel models as a banker or equity analyst? Seems to me ai is already good enough to automate all that sht. But trading and running a book is an entirely different beast.
yeh basically agree with all above. ive only just started, trading rates, already had pings and a slightly more senior guy just got poached two weeks ago by a HF.
AI atm just scales productivity slightly, automation just deals with small orders and allows sales to cover more clients/products, traders just more focused on their own risk and book positioning. Potentially slightly fewer jobs but trading teams always pretty lean so not a large impact atm.
Does being in linear vs non linear rates matter in terms of of exits? Looking to get some color, thanks
Can you perhaps share your path on how you got into S&T? Im trying myself with a less than optimal CV rn and was just wondering if I am more or less moving in the right direction or diverting from it.
I think it's still a thing, just not as straightforward as it used to be.
A lot of bank desks today are more flow and client-driven, so traders may get less experience running directional risk than previous generations. That's probably why the pipeline into macro funds feels narrower.
On AI, I'm skeptical of the "macro traders get replaced" narrative. Macro is often about figuring out which variables matter before the data confirms it. AI can help process information faster, but interpreting policy shifts, politics, and changing market regimes is a different challenge.
If anything, widespread AI adoption might create more crowded trades, which is usually where new opportunities emerge. The edge may end up being human judgment plus AI, rather than one replacing the other.
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