Hey everybody,
My brother studied physics at a top 4 university in the US that’s a semi target for finance and just recently graduated.
He’s going through grad school apps but has become increasingly disillusioned with academia in his current role (doing post grad academic research to help bolster PhD applications) and has been increasingly considering going into finance.
While I work in finance, the quant HF world couldn’t be further from what I do and I really don’t have any idea how to advise him, or how feasible it is to break in post graduation as a physics undergrad without much finance experience.
Does anyone here perhaps have some relevant experience or pertinent advice that I could relay to him?
Since he’s an undergrad, your brother’s best bet would be Quant Trader positions at elite prop firms (a good list to start with includes Jane Street, Citadel Securities, Five Rings, Optiver, SIG, DRW, IMC, etc). Compensation 225-425k out of college.
Typically Quant Researcher roles at hedge funds are looking for a PhD. Undergrads would need to be academically exceptional and likely have solid research experience, so getting these positions out of undergrad is really unlikely. Some firms (hedge funds like AQR and prop like HRT) are open to undergrad researchers, so it’s still worth a shot if your brother wants to try for QR roles.
I would add that it would probably be easier for him to apply for internships at these shops first Vs going for the grad role straight away.
Outside of elite props and hedgefunds, you can also find high paying quant roles in the trading and structured products division of the big banks- there are a lot of different roles in finance for people like your brother, so I would go about this broadly. Best of luck to him
Is it common for people to apply for internships post grad in the quant space? I know that wouldn’t typically happen in run of the mill IB or PE.
My 2 cents are that he should try to pester his friends who are currently in finance positions for internal referrals. I imagine since you mentioned top 4 physics + semi-target that your brother goes to Berkeley, and so there must be a lot of alums/friends he can contact. That would be his best bet to break in--without any finance internship experience it is going to be tough (but not impossible!) to get a gig postgrad.
Sell-side --> HF/buy-side is still a popular, well-tracked path for quants too, though obviously not to the extent of pre-Dodd-Frank/2008. I would recommend networking hard to get an interview at any major full-service bank for an S&T role, or perhaps on the Asset Management side (eg GSAM QIS).
As others have advised, prop shops are a very popular route for quanty undergrads, though again without a referral or internship experience it will be tough to break in.
Quant HFs are also an attractive option for undergrads, and as far as I know RenTech is the only major quant fund (maybe TGS as well) that categorically refuses to hire undergrads for research roles these days (though they will hire undergrads who were IOI winners for dev roles). My (cynical) hypothesis here is that RenTech places extra premium on loyalty, and quant PhDs are less money-hungry than top undergrads who gun for buy-side roles straight away.
That being said, generally all quant funds have a slight preference for PhDs, but there are very many exceptions. Notable examples include Ken Griffin (founder of Citadel), Peter Muller (founder of PDT), John Overdeck (co-founder of Two Sigma; MS in Stats), Igor Tulchinsky (founder of WorldQuant; MS in Comp Sci + MBA), and Eric Wepsic (very high up at DE Shaw).
Another good route to ultimately end up in quant is to go for FAANG-esque tech firms or top startups: a lot of quant (and fundamental) funds have been hiring laterally from those kinds of places, and I expect this to only increase over time.
Finally, if your brother is interested in non-quantitative investing, these days there is plenty of demand for quantitative skills at fundamental shops as well. This would be a good option if he has good social skills and business acumen. In the non-quant world there is often a slight bias against PhDs...
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Honestly not sure, but I would conjecture that it has something to do with the stereotype that quantitative phds don't have the greatest social skills...
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