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Firstly, congrats on landing a prop desk out of the prestigious IIT. I'm still in college, but I think I can take a hack at this question:
Your optimal trajectory would be to apply to an MBA in Finance or quantitative masters/ PhD (possibly engineering) in the U.S or U.K. The Dodd-Frank act has decimated the potential for prop traders at the bulge bracket banks, however there is some possibility given your experience that they'd take you on board, or perhaps you can apply to a place like First New York Securities which has a few former hedge fund traders along and some of their macro traders have managed to transition from FNYS to portfolio manager positions at some of the top macro funds (Moore, Soros, Citadel, Caxton etc).
As for schools, here are some great programs in the U.S that place well in trading: - University of Chicago MBA - Wharton MBA - Columbia MBA - Princeton Master of Finance - Engineering or Master of Mathematical Finance from Columbia - Master of Financial Engineering from NYU - Berkley Financial Engineering - Stanford Financial Mathematics
As for the UK: - A graduate finance degree from LSE - A graduate finance or engineering degree from Imperial
Also, do reach out to IIT alumni who work at top macro funds and prop desks- there are quite a number of them out there and I'm sure most of them would be more than happy to help.
UPenn-Wharton MBA places well in Trading? Haha, that's something you don't read everyday. Aside from that though, spot on.
OP has a good enough alumni base to reach out to. Would start from there. If you want to go down the masters route though, my personal recommendations would be Princeton MFin, UC Berkeley MFE, and Stanford M.A. in Financial Mathematics (in that order).
Many of the partners at FNYS are Wharton MBAs.
Huh? Wharton is arguably the best b-school for S&T, along with columbia.
Also, stanford's masters in financial math should be ahead of berkeley; it's much more selective and have better placement.
These are all great programs obviously. But the masters finance/financial engineering programs actually don't place that well at hedge funds. The vast majority of people go on to quant research, trading, structuring, research roles at banks and prop trading firms. Look at the career placement of princeton's finance program, for example. They send tons of people to goldman, morgan, JP Morgan, and a few to quant prop shops like getco or quant funds like citadel. But there's almost no placement at macro hedge funds, which is what the OP wants.
Macro funds draw heavily from trading desks at bulge bracket banks (especially rates/FX/commodities), some banking, and sales desks. It seems like the OP has a great track record and knows his shit, but he's not working for a well-known bank, which is hurting him a lot.
My advice would be for him to get into a top U.S. MBA program like wharton/booth/columbia, do a trading internship at a bank after his first first year, and then recruit at hedge funds during the second year. Even coming from these schools, it will be tough to get into a top fund, but I think the opportunities and network you get from those schools will help you regardless.
The commodities houses have prop trading desks doing things which are decidedly non-commodities. Call them (ask for the "equities" or "finance" desk), get the names of the senior traders, send them your track record. One of the few places these days where you can start without an expensive degree.
Websites and emails will never get replies. Calling at least gets you some immediate feedback.
Thank you for your replies. I did end up talking to a portfolio manager at Millennium a month back. I sent him my track record for the last 2 years and told him about some trades that went on to become very profitable. He told me that my track record looked decent. But when I asked him if he could give me a chance he did not reply back. I was actually very interested in FNY and applied on their website way back but to no avail. I have now sent a cover letter and CV by post to the head of macro rates at FNY. Not sure if that will work either. On top of that, I have a very bad network or lack details about who to talk to or apply to.
I have received the offer of heading a new US and European rates desk at another day trading firm but I would be willing to take it up only if I do not have another option and to boost my profile for an MBA.
I read somewhere that FNYS is currently facing some significant issues primarily due to over expansion and that probably explains why they've cut back on hiring, however they also opened an office in London (http://www.infinitycm.co.uk/index.php) and I think they're looking to hire. A lot of prop firms such as Ronin Capital and Gelber Group do have some global macro portfolio managers on board, yet they are usually quite experienced. Based on the information that you've provided I think that would be a venture worth pursuing as well.
No more comments?
I am actually not keen on quantitative finance....I am more of a macroeconomics oriented person...so MBA makes more sense for me
So you guys agree that its difficult to get a job in the USA given how I am currently placed and that I should be concentrating my energy on applying for an MBA?
No.. at least that is not what I'm going to tell you.
Pass your Level III and concentrate on your track record. You are applying when guys in the US are getting laid off right and left due to downsizing. The amount of competition your up against right now for the same position is superb. I don't know the size of your book nor what your doing month in month out return's to draw downs wise. One thing I can say is you can always do better than last month and that better be your attitude. There is no coasting in this business. Maybe you should stay at your firm, up your returns/develop another strategy, wait a 1- 2 years and reapply after the storm has blown over. Do not absorb more debt with your MBA.. education does not replace a sub par track record.
Ps - I made that last comment because you are already in the business managing your own book.
I did not read you have an offer to head a desk.....
Take it (if there is no micro managing of you involved) and blow the production you did at your last place out the water. Then apply to Macro Funds or prop firms after you've shown increased production.
Bravo, is it possible or common to transfer from being a trader at a prop firm to a portfolio manager or trader at a macro fund if one manages a large capital base ($3million+) and has a fairly consistent rate of return with low relative draw-downs trading a variety of asset classes over the course of 5-8 years? I might find myself taking that path if I fail to get into a BB and to be frank I would actually prefer prop trading to an analyst stint.
Also, since OP is presumably a non-US or UK citizen, I think prop firms would be reluctant to sponsor an international visa. Not sure if this assumption is true.
I dont think they'd mind sponsoring a visa if they're hiring him to head the desk.......
On a different note, I'm also curious about how one could move from a trading position, say, on the sellside doing market making, to a PM position eventually? From what I've seen this summer, a trader's function is even more systematic than I had originally thought... Is it perhaps a better option to pursue something else that better trains your macro thinking (since macro trading is my interest as well)?
Sorry to jack the thread but i'd really appreciate any pointers as well...
@ Macro Arb..
Is it possible to transfer to Portfolio Manager? Nope or slim to none(I've never heard of it). As a trader? Yup. To make it to portfolio manager you will need real size. I'm talking that 50mil+ $$$. Even then smaller HF's may have to be your first avenue. SAC, Tudor, Bridgewater, guys have $1B books and control over whole funds.
@Ah...
Coming from market making you will need to become a buyside trader before even thinking of PM.
On a side note...
Think of buyside trading as a sport. The athlete(trader/PM) is a business all of his own under a larger umbrella and you must sell yourself as such.
Good Luck!
My goodness, there isn't a single useful comment on this post. So off, so inapplicable.
Really helpful advice here and it's consistent with what I've gathered and observed.
Not to speculate, but I think it's safe to assume that OP has a great shot at UChicago and Columbia due to his international prop trading experience coupled with the fact that he graduated from an abnormally competitive institution.
Thanks guys. Some of the comments were really helpful. At this moment, taking up the offer of heading the rates desk at another day trading firm looks to be making sense for me simply because I am being offered both a significantly higher base salary & bonus, lower transaction costs and possibly a small share in the profits of traders under me. I can also trade any asset class that I want. Though the capital base of the firm remains in question. Hopefully another year down the line with this experience I should be able to have a shot at Columbia, Chicago Booth or Wharton.
Asian hedge fund would be optimal for bschool and career, especially if the fund itself is focused on Asian/EM equities, fx and rates.
BUMP. This is a great thread. Curious to know what decision the OP made.
I did not take up the job of running the rates desk as there were some serious issues about the capital that I would have ended up trading with. Despite, how good the managerial experience would have looked on paper, it was too much of a risk for my trading career.
If you have a real, verifiable track record absolutely do not go back to school. Three years from now people arent going to understand why you went back to business school if the numbers you show them from the old track record are good...the whole thing will look strange. You will end up losing the opportunity that your track record may be able to afford you right now. Put together a nice pitch with your track record and how you trade and then find a recruiter who can get into the hands of some macro funds. You can apply to MBA programs while you do this but I would make sure all avenues are exhausted before you go back to school as in my opinion you will be essentially throwing away your track record and there is no gaurantee you will ever find a seat that lets you build a new one.
...ok i just read the a few of the above posts that i hadnt seen when i wrote my first post above...let me emphasize that you are not in a million years going to get a job as a PM at a macro hedge fund coming out of business school. That is a pipe dream. Nobody is going to tell an investor that they are giving money to a kid who just graduated from graduate school no matter how good the school. At best you will get a job as an analyst or something and have to spend 5-10 years clawing over all the rest of the analysts to get your own book. Even those jobs are incredibly rare so that is a "best case" and certainly not a given. Right now you already have a track record which in this business (macro trading) is worth way more then a harvard MBA. Use it or lose it.
Completely agree to your points made above. I am aware that with my prior experience, an actual trading job would add significantly more value than an MBA, more so because I am already very strong in my macro understanding. But what you are overlooking is that my stint at the day trading firm can only give me a limited exposure. Very soon my learning curve would start to get flatter- there would be a limited scope to trade with higher capital or get exposure to varied products. And, then if I end up spending a couple of years more here, then I am going to become uncompetitive as people will raise questions about my pace of progress, which might be very good given the scope I had but might be average in an international context. If there is absolutely no employer willing to give me a job right now (for whatever reason) then there is no guarantee that somebody will some time later. I have already tried almost everything that I could to find one and I agree that an MBA would not make me become a PM right away. It can at least help me move to the financial centres where I will have choices unlike my current situation.
Your best bet is to get into a top MBA program such as wharton, booth, columbia, sloan, LBS. If you can't get a job at a hedge fund right now, that's not going to change if you stick around at your current place of employment. A top MBA will give you exposure to so many different types of firms in finance, and the various on-campus recruiting events will allow you to meet and interview with these firms quite easily. Given your experience, I could totally see you coming out of b-school with a job offer at a BB sales&trading desk or a hedge fund like bridgewater. When your career is "stuck," a top MBA is pretty much the only way to get back on the right track.
Also. my track record is in the form of a daily P&L history for the last two years in MS excel so I assume that is verifiable and accepted.
Great thread. Curious to know what the OP ended up doing.
I expect to get back to you with an answer by the end of January once everything is clear and certain. Everyone should hopefully find the story interesting.
Any update?
XXXX
Edited
Given the stage that you're in, I think you should just PM bondarb as anyone else's opinion, myself included, will likely just be noise. Furthermore, I think he got his start at a credit fund before moving to macro.
I will do that but I would still be happy to know your point of view, even if its noise :-)
Always commit to the path with the hardest learning curve, where you will learn the most hard skills, vs. short term prestige or brand which you may not understand that well. For example, when I am hiring I do not value degrees (especially Masters level) beyond serving as a filter - if you did a masters in a real subject at Columbia you probably have both an IQ above 120 and an ability to work hard. Experience - especially quantifiable results, such as the clarity of your trade ideas or an audited P&L - is the single biggest predictor of success.
That being said I do not think the value style and global macro trading can combine. It may be that value concepts can help optimize your macro trading (i.e. when bullish US stocks you would not go long an index but your more concentrated selection of the best stocks from it; or you would dig in a capital structure instead of buying the most available and efficiently priced bonds). My desk did not really bother with this kind of thing; they would wait for a mispricing and dig into the right instruments to simplify the trades (i.e. going for vol on an index instead of a basket of stocks).
I also think that if you are an "incredible macro talent" (and there are truly few) your time will be wasted in Spain. If further study is something you really wish to do, get into a proper masters like MFE at Berkeley or Wharton MBA, which have a much stronger brand and students. Don't go for a third rate business school whose purpose is mostly to milk the propensity for rich foreign kids to try and get an easy degree with some modicum of brand. I've met MBAs from the Spanish schools who could not speak English...
XXXX
Not at all. I've worked with people who have a Masters in Econ from there. Based on the calibre of this small sample (those who were nevertheless good enough to get front office jobs) I would say if you are smart you can easily cover most of the material in your spare time.
Put it this way: I studied engineering at a "top 5 in the world" university according to the Shanghai ranking. The course was structured as "general engineering" for 2 years after which you chose your specialization. So we did like 8 subjects and then in third year specialized in civil, electrical, whatever engineering. I kept track of my school friends who went to "top 50 in the world" universities doing the specialized engineering discipline straight up (so starting civil engineering in first year). I realized that we had covered more material doing 8 subjects than they had doing 1 in the first 2 years. This is not because their profs were not good, it was because people at my university were happy working 20h days (we had discussions about the optimal sleep deprivation quantity so that you would only collapse at the end of term, not during) and spending their weekends catching up on work (to the extent it was common to fall ill from exhaustion at the end of term) thus learning much faster and thinking much harder (see: http://www.paulgraham.com/hamming.html - look for the compounding effect of knowledge), whereas the guy in the top 50 place wanted to work 20-30 hours a week and party in the evenings and spend his weekends going hiking or whatever. That culture to an extent carried over to the masters programmes, although the calibre of the entrance students was lower (but still selective thanks to a strong brand). I thought we were hardcore until I met EECS kids from MIT and UC Berkeley who blew my mind with their knowledge, drive and ability to get things done.
Another anecdote: I went to the open day for HEC's masters in finance back when I was unemployed (pre-crisis) and trying to break into the industry. The head of the course (look up the ranking: not bad!) was proudly telling us about all the kids he had placed into London banks' derivatives desks. So, since I've always wanted to work in the States, I asked him "how many of your graduates have you placed in New York?" - he got super flustered, got a little angry and finally admitted in the last 3 years not a single student from his masters programme managed to break into Wall Street. Not one! Because courses like MFE at Berkeley are so much more hardcore, so much more competitive that next to that even the "elite" HEC course could not provide enough value to justify a US bank getting an H-1B. The most mind blowing thing for me was how many of the current students considered Soc Gen Paris office to be the top place they could hope to work at. Because the GS Paris office kinda sucked vs JP or SG, people didn't think much of Goldman! Whereas in London and New York, everybody would have killed for even a spring internship, let alone a full time job, even I applied 3 times, as the place was rightfully known as the top place to work no matter your area.
It really depends on how good you are. In my experience very few people can profitably trade macro. If you can, you are truly exceptional and you should gun for a really good masters, or for 2 years of great P&L you can use to leverage an H-1B or green card into a top Connecticut hedge fund.
Thanks a lot. I got your point.
I'm sorry to sound like a dick, but there is a huge disconnect here. You call yourself an "incredible macro talent," but you are unable to get job offers at macro hedge funds, and you are unable to get into a top mba or finance masters program and instead am considering attending a third-tier program at some school in Spain. Huh?
Before I even think of answering back to you, I am very curious to know if you are aware of the state of the financial services industry in India? Also, are you based in the US, UK or Hong Kong?
I suppose I have made my choice.
I'll take the opportunity to side track this into the great point the OP is making. There is enormous talent abroad and if you are hiring for your own company, you should absolutely hit it. It takes effort but is very worth it.
I recently had to hire exceptional programmers to do some harder than usual work (involving more advanced machine learning concepts, but also technical challenges from data size and multiple sources that required a solid IT background). I posted my ads globally and got a lot of great CVs back. There was a correlation between the number of great CVs and both the size of the population of a country, and its economic state. India and China were obviously very well represented. I thought I would be hiring Americans; to be honest I did not think the skillset I needed - including a specific tech stack which is not popular in corporate-feeder non-US schools - would be found elsewhere. Maybe Nordics or Swedes.
I ended up hiring a guy from a third world country who had a masters and BA from a world top 5 university. Because of his passport, he could not get a visa in the first world and had to seek jobs elsewhere, Singapore was growing so was a little more lenient. I got him for approx 1/5th of what I thought I would need to pay (an amount Americans would have laughed me out of the door for). He was incredibly keen, and his code blew our mind with its simplicity, elegance and ability to get the job done. I set a high bar with substantial coding challenges to be completed (testing both intelligence and motivation) and the American candidates basically sent me back 1/10th of the answers with "yeah, I'll do the rest this weekend, but can you interview me anyway" hoping to surf their Ivy credentials, whilst the good third world guys answered everything and asked me for detailed feedback (one answered in both functional and OO style to show how well he understood both ways).
Through the job ads I ended up in discussion with a number of already employed folks inside China and India who were interested in what we were doing that required such a hardcore skillset; I realized that a lot of these guys knew far more than their equivalent in the US, I'm thinking particularly about the undergrads hired from Stanford for 150k who never even complete a project as they are hired on the next one already. IIT guys were few but they were always super smart.
Don't get me wrong, I'm not saying on average they are better than US grads, just that the law of numbers and a gradual improvement in local education is bearing fruits.
This got me thinking pretty hard about the future of the job market, and immigration rules in the West.
Macro Arbitrage
I am not seeking an interview on this forum but just a piece of advice on the two paths that I am thinking about. And, I have absolutely nothing to do with his unsolicited commentary on me, a comment which was nevertheless completely unrelated to the advice I was seeking.
I am, hence, completely indifferent to his elitism.
An MBA might help, but you'll be taking a lot of risk with this option. As long as you're aware of this, it's fine. I would suggest that you try MBA, but then broaden your scope to include banks, rather than just macro hedge funds. This might make things easier, but, obviously, everything depends on your circumstances.
One thing I'd say is that, unfortunately, your record of intraday punting of STIR/bond futures isn't of great interest, as a qualification for global macro.
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