BB Quant Research versus Quant Hedge Fund Career Path

imaginedat's picture
Rank: Monkey | 58

Recently, I've been thinking about career paths and I am curious as to what the pros and cons of starting as a quant within a BB would be versus starting at a hedge fund like Citadel, Two Sigma, etc.

Salary seems to be better on the hedge fund side (200k-300k starting vs 100k-150k at BB), but is there embedded career risk when starting out in a HF as opposed to within a BB and then moving laterally later on (i.e. the expected value of future salary when beginning at a quant fund is lower due to decreased future mobility)? Or are my salary numbers off to start with?

Another area of differentiation is the style of research being conducted, as within a BB research is distributed to clients as opposed to used for the purpose of alpha generation.

These are just two topics off the top of my head, but I'm curious to read everyone's input.
Thanks monkeys.

Comments (14)

Apr 12, 2019

imaginedat, sorry there are no responses yet. Maybe one of these topics can point you in the right direction:

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  • ANALYST WITH THREE YEARS OF EXPERIENCE FROM NON-TARGET- SEEKING ENTRY INTO BULGE BRACKET IB / HEDGE FUND Miami. Bottom line- what are may chances for breaking into BB in NY? or a small hedge fund? Here is my ... a $500,000 student investment fund, and sold real estate. Post graduate experience includes 1 year M&A ... from a no name school and two no name firms- when it comes to the Street.... I cannot break into NY ...
  • Bulge Brackets and Hedge Funds Hi everyone, I just started working as a trader in the S&T deparment of a BB. What I really ... before trying to get a job at a HF? Please share opinions ...
  • Hedge Fund or Trading for Bulge Bracket? I'm 22 and trying to start my career in finance. I just got an offer today for an Investment ... hours. My question is, what factors should I consider in deciding which offer to take, assuming I get the ... MS offer? Is one clearly >> the other, or will it depend on my interests/career objectives? ...
  • Networking into a Hedge Fund? It's Unstructured. the IBD to HF article mostly inquired about how to go about networking your way to a hedge fund ... funds (from here, "hedge funds") and quant-shops (with apologies to Ray Dalio), feedback from ... path be prepared. It should be noted that unlike the mega-PE funds, hedge fund recrui
  • More suggestions...

Hope that helps.

Most Helpful
Apr 16, 2019

I'm at a BB, what I can tell you is that we have tremendous difficulty hiring good junior people mainly because the pay is so low.

If you can get into an established hedge fund with good pay, do it. You are not losing anything, because worst case you can just go to a BB. Everyone here is trying to get out into prop shops/HFs, that should tell you which side has the higher bar for hiring.

    • 3
Apr 16, 2019

Appreciate the input.

Apr 19, 2019

are you a quant/strat?

Apr 20, 2019

[deleted]

Jan 21, 2020

125k is "so low"... ?

Apr 19, 2019

At quant firms, quants are the rainmakers and generating the bottom line for the firm. They get treated the best come bonus time, and with regards to growth within the firm. At a BB, quant trading gets little attention- especially from senior folk- as it is such a small/insignificant portion of their total business.

Only upside of a BB I can think of is there may be less risk because if you're not doing alpha research to be traded live, it is hard to get a true gauge of your performance.

Apr 28, 2019

Not only are BB salaries lower, but bonuses are as well. Sell-side quant is a decent career gig if you are extremely risk-averse. But if that's the case, why not just work for FB/Google? BB quants receive promotions based on burecreatic HR timelines (good or bad depending on your risk aversion).

Most BB quants don't manage any risk (PnL), although it's desk and product dependent to an extent - e.g. equity derivatives quants maintain the pricing models which the traders use, but aren't involved in managing the book and not seen as revenue generators. BB equity algo traders (e.g. central risk book) do manage risk, however their objective is not alpha generation, so that skill is not necessarily useful at an HF.

The HF space doesn't view sell-side experience as too valuable. The incentives are entirely different, which makes it a hard transition from BB to HF. It gets harder the more one spends on the sell-side. I made the switch very early in my career, and couldn't be more pleased with my decision.

HF career path is much more rewarding, both intellectually, and monetarily. However, if you are extremely risk averse, it will not be the best fit.

    • 2
Apr 29, 2019

Thanks for the response. How many years did you spend at your BB before moving over? Would you say that experience was beneficial to your development?

Apr 30, 2019
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