DE Shaw vs Two Sigma vs Citadel Offer Advice

Junior undergraduate at top school (think HYP) studying quantitative field. I've been fortunate enough to land summer offers with DE Shaw (trading), Two Sigma (quant research), and Citadel (itap - investment and trading associate program). I'm hoping to make a decision in the next two weeks.
Could anyone give me some advice on which offers I should pick? The factors I am considering are:

  1. Advancement - with little experience in finance, I want to learn as fast as possible - which place will help me advance the fastest?
  2. Median pay growth - don't think I will be a "superstar" performer at these places, so think this would be a valuable metric for me
  3. Reputation - i know the three funds are top quant funds, but for those in the industry, I would like some more specifics. afaik, Citadel is high turnover but very high pay, DE Shaw has the prestige of generally being "the quant fund" though recently has been declining, two sigma more unknown but recently has been growing in popularity with high returns

Choosing Between Quant Firm Offers

While the OP is in a great position with offers from 3 prestigious firms, it is a difficult choice to make between these three offers. While our users feel that all offers are strong options, our users suggest taking the Citadel offer over the others due to pay and the scale of the fund which also has different strategies. Our users discuss below:

User @xqtrack, a hedge fund analyst, also commented that the OP should follow the best fit:

xqtrack - Hedge Fund Analyst:

Go where you felt the most at home with the people. they are what will matter. All 3 have stellar reps, all 3 are fairly broad and do more than just quant, and you can be successful at any of them. Since it's a summer offer, you probably could pivot to one of the other 2 if you don't like the one you pick for full time.

Citadel Careers Outlook

Our users shared that Citadel is the best known and has many strategies with the best pay.

K3:

All three pay pretty well, with Citadel being known for the highest. For Advancement, I would say: 1) Citadel 2) Two Sigma, and 3) DE Shaw -- simply because I know the first two have structured programs that help everyone while I am not THAT familiar with DE Shaw.

Citadel is your classic quant shop mega fund with many strategies being deployed simultaneously. The deal with Citadel is yes turnover is high and the exits are pretty good since everyone knows what you did or were doing there. That being said, you get some pretty amazing resources to do your work/research as well as some serious access to industry experts, or engineering programming, basically anything you can think of with little resistance. As far as reputation, these guys are known as the best.

d7aug:

Citadel is a household name and I think most people would say this is your best bet. The real selling point for me is that it has so many strategies. A lot of these places- some more than others- have prevalent internal mobility, so knowing that you can move around within Citadel's strategies until you find your fit is a huge plus. That said, you obviously have to excel in your first role, but with offers from all 3 of these firms I think you will.

Read more about Citadel on the WSO Company Database.

D.E. Shaw Careers Reputation

While our users had less to share about DE Shaw - our users disagreed with the belief that DE Shaw is falling in prestige status.

d7aug:

Finally, I haven't come across anything or anyone that suggests the prestige of DE Shaw is declining. As you alluded to, this shop has had, and still has, some of the brightest quant minds in the industry. I would hate to see you turn down DE Shaw because you felt it wasn't prestigious enough. Because it's known as the quant fund, many people might say it's the place to go to if you know for sure you want to do pure quant. As a college kid I think it might be a bit foolish to limit yourself to one HF strategy, but it's not like you're making a bad choice either way. I would personally be more attracted to the multiple platforms at Citadel.

Read more about D.E. Shaw on the WSO Company Database.

Two Sigma Internship Offer

Two Sigma remains a more unknown name in the hedge fund industry with a reputation for being highly entrepreneurial. Our users explain below.

K3:

Two Sigma. These are the "new kids on the street" taking quant science and the capital markets to the next level. While Citadel is heavily structured and focused on the markets, Two Sigma gets a bit more creative from what I understand. I heard they almost launched their own satellite to monitor parking lot volumes of Walmart and Target to determine activity/earnings... This could be fully made up, but it sounds creative compared to some of the stuff other HFs do. For reputation, Two Sigma is a bit under the radar... so not as well known. Almost everyone knows who Citadel is... No many know who Two Sigma are...

d7aug:

Two Sigma is a super interesting place to work. I've heard similar things about the uniqueness of their projects. I'd say that if you are more of the adventurous/entrepreneurial type then you should really look into this place, but if not, I think the prestige of Citadel and D.E. Shaw trumps Two Sigma. Again, I am more risk averse, and love the idea of having one of those two names on my resume over Two Sigma.

You can see how Two Sigma describes their strategy below.


Source: https://www.twosigma.com/about/approach

Read more about Two Sigma on the WSO Company Database.

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Comments (30)

Oct 25, 2015
Oct 25, 2015

Wow, congratulations. The fact that you have offers from all three is amazing.

@IlliniProgrammer will be able to give you good advice.

Best Response
Oct 25, 2015

All three pay pretty well, with Citadel being known for the highest. For Advancement, I would say: 1) Citadel 2) Two Sigma, and 3) DE Shaw -- simply because I know the first two have structured programs that help everyone while I am not THAT familiar with DE Shaw.

Citadel is your classic quant shop mega fund with many strategies being deployed simultaneously. The deal with Citadel is yes turnover is high and the exits are pretty good since everyone knows what you did or were doing there. That being said, you get some pretty amazing resources to do you work/research as well as some serious access to industry experts, or engineering programming, basically anything you can think of with little resistance. As far as reputation, these guys are known as the best.

Two Sigma. These are the "new kids on the street" taking quant science and the capital markets to the next level. While Citadel is heavily structured and focused on the markets, Two Sigma gets a bit more creative from what I understand. I heard they almost launched their own satellite to monitor parking lot volumes of Walmart and Target to determine activity/earnings... This could be fully made up, but it sounds creative compared to some of the stuff other HFs do. For reputation, Two Sigma is a bit under the radar... so not as well known. Almost everyone knows who Citadel is... No many know who Two Sigma are...

DE Shaw. Of the three you mentioned, I know least about these guys. I have heard it is "prestige" driven place, but Citadel and Two Sigma are known as the "super-elite" shops from what i know. I am assuming there is some type of culture there that keeps people past the two year mark, but who knows.

.

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Apr 7, 2018

DE Shaw is not the best in quant. I would definitely prefer Two sigma if you are going that route

Oct 25, 2015

thanks all for your input thus far. The consensus seems to be aligned with what I am generally thinking.
And @"QGKZ" - I actually think the process was much easier once I got the first one - my belief is that these firms greatly increase their Bayesian priors of you succeeding once they realize you have an offer from another one.

My major caveat for choosing Citadel is 1) it is in ITAP and not quant research and 2) high turnover. I'll elaborate my thoughts on the first point:

Citadel appears to be the most "global" in a sense that they have multiple funds in multiple strategies. When looking at their different groups, global macro, global equities etc, there is a general sense of where "discretionary traders" reign king, whereas other groups where quants are their front office. I generally want to be in a role that's front office given a group, which I think ITAP rotation won't necessarily place me in. More importantly, since Citadel is a quant fund, I think that, overall, the quants are more respected and paid better. This is just a hypothesis with few sample points so please someone in the industry please correct me if I am wrong.

@"K3" - do you have any thoughts given the above input?

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Oct 25, 2015

I think your impression that DE Shaw is "declining" is incorrect...all three of those firms have been doing quite well for the past several years.

Oct 25, 2015

hi xqtrack, thanks for your input. it was based off hearsay from a few summer interns / starting FTers so they probably don't have as much perspective. i've perused your posts and you seem very knowledgable about the industry. care to offer any other insights? much appreciated.

Oct 25, 2015

I work at one of these firms/one of these types of firms so I thought I'd chime in (although I am fairly new to the industry). All the info you are getting here is accurate and you should definitely consider it. The one thing I wanted to add- before I dive in- is that you should definitely be considering the actual people with whom you'll be working. After all, you do have to go to work everyday, and since the firms are so similar, how you feel about the working environment should be a major factor.

Citadel is a household name and I think most people would say this is your best bet. The real selling point for me is that it has so many strategies. A lot of these places- some more than others- have prevalent internal mobility, so knowing that you can move around within Citadel's strategies until you find your fit is a huge plus. That said, you obviously have to excel in your first role, but with offers from all 3 of these firms I think you will.

Two Sigma is a super interesting place to work. I've heard similar things about the uniqueness of their projects. I'd say that if you are more of the adventurous/entrepreneurial type then you should really look into this place, but if not, I think the prestige of Citadel and D.E. Shaw trumps Two Sigma. Again, I am more risk averse, and love the idea of having one of those two names on my resume over Two Sigma.

Finally, I haven't come across anything or anyone that suggests the prestige of DE Shaw is declining. As you alluded to, this shop has had, and still has, some of the brightest quant minds in the industry. I would hate to see you turn down DE Shaw because you felt it wasn't prestigious enough. Because it's known as the quant fund, many people might say it's the place to go to if you know for sure you want to do pure quant. As a college kid I think it might be a bit foolish to limit yourself to one HF strategy, but it's not like you're making a bad choice either way. I would personally be more attracted to the multiple platforms at Citadel.

Good luck with this. There isn't a wrong choice.

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Apr 7, 2018

I wouldnt say declining...

Oct 26, 2015

I don't really have that much info on the firms as they're pretty secretive places. I'd agree with @d7aug -- go where you felt the most at home with the people. they are what will matter. all 3 have stellar reps, all 3 are fairly broad and do more than just quant, and you can be successful at any of them. and since it's a summer offer, you probably could pivot to one of the other 2 if you don't like the one you pick for full time.

    • 1
Oct 26, 2015

How different the HF forums are from the IB ones....again, thanks for all the valuable insight. I am leaning with the firm I think will be most comfortable for me long term.

However, one point I mentioned earlier that I would love for an opinion on - since these are all quant funds, wouldn't it be best to go for a quant research role at these firms? More broadly, how would choosing quant research / trading at these places differ? A notable exception being that Two Sigma doesn't have "traders" in the traditional sense out of undergrad so their quant research essentially does the vast majority of the revenue generation. This isn't as transparent for Citadel and DE Shaw, so any clarity on this would be much appreciated.
(Follow up: if it is suggested to take QR > trading, should I ask for Citadel and Shaw for QR interviews?)

I know this is only for a summer, but I hope I can make the best choice given my constraints. Hopefully, if I end up wanting to pivot FT, I can still do so with open doors (in hindsight, leveraging the offers to get the other offers might have screwed me in the sense that, if I reject a firm they would know I didn't choose them for one of the other two. Not sure the repercussions of this.)

Oct 26, 2015

This is what I have heard about DE Shaw by keeping up to date with quant gossip and information from insiders at DE Shaw...

Apparently, and take this with a grain of salt, the firm has been declining with regards to performance for some years now. This is specifically because DE Shaw himself has little to no interest in investment management/finance/economics, ect.

Before opening a hedge fund, Shaw started out as a researcher with a PhD in computer science. Since making good returns initially, he turned his interests back to research. Apparently, most of the focus and resources of the firm are put into DE Shaw Research, rather than the hedge fund component. What goes on in DE Shaw Research? I'm not entirely sure, except for the fact that it is not markets related. From what others have said, there is a huge focus by DE Shaw Research and Shaw himself in cutting-edge, ultra-high performance computing and its applications in protein folding simulations. Protein folding is an EXTREMELY important field of research. I won't get into what this is, but anyone who has taken biochemistry and molecular biology classes in college will be familiar with this and its importance. Any breakthrough in this field will be far more significant and renown than anything Shaw will achieve in the world of finance/economics.

Based on what I've heard, I suspect that after becoming extremely wealthy, Shaw decided to devote his extraordinary resources to more significant human endeavours. This eventually led to the development of DE Shaw Research and the allocation of resources away from the hedge fund component and to research. This then led to a decrease in performance for the hedge fund component and so the cycle continues.

As I said, this is all unconfirmed gossip from various sources over the years - many of whom claim(ed) to be past/present DE Shaw employees. I honestly have no idea if it is true or not. Either way, I think it is smarter to go with Citadel or Two Sigma. If I had the choice, I would personally choose Two Sigma over Citadel. However, you can't really go wrong with either.

Oct 29, 2015

Shaw is basically living the dream imo. Makes a ton of money in finance then turns to building a legacy that will remain for centuries.

Oct 31, 2015
gunners14n:

Shaw is basically living the dream imo. Makes a ton of money in finance then turns to building a legacy that will remain for centuries.

I agree. However, I think it's worth considering if he ever truly had a passion for finance/investing? Perhaps he loathed it and just saw an inefficiency that he could exploit. On the other hand, maybe he did enjoy it and simply lost interest ? Who knows.

There's no doubt that he has the potential to do amazing things now. He is living every academics dream - essentially unlimited resources to pursue research that can significantly change the world for the better. I wish him the best.

Oct 29, 2015

Thanks all. I'm going to go with the the one I think is the best culture fit. Appreciate all the input :)

Nov 1, 2015

Just curious what you mean when you say very high pay? Higher than investment banking?

Nov 2, 2015

I would say it's significantly higher than anything in investment banking, but I'm speaking from the perspective of internships.

Nov 2, 2015

It's the typical quant fund, and for people in the industry, it's very well known. AQR, BGI, GMO, GS QIS, and many others do similar things. AQR is in Stamford, GMO is in Boston, not sure about BGI, QIS is in NYC. Sorry they're not all in NYC, I couldn't think of many quant funds in the city.

Nov 2, 2015
Notepad:

It's the typical quant fund, and for people in the industry, it's very well known. AQR, BGI, GMO, GS QIS, and many others do similar things. AQR is in Stamford, GMO is in Boston, not sure about BGI, QIS is in NYC. Sorry they're not all in NYC, I couldn't think of many quant funds in the city.

I thought GMO was a traditional investment management firm like wellington or fidelity? No idea they dabbled in quant strategies.

Nov 2, 2015

Spark is another fund like this--it's more under the radar than Two Sigma. The multi-manager platforms like SAC, Milliennium, and Caxton have a lot of quant managers.

Nov 2, 2015

They have a quant equity group. That's about the limit of my knowledge on this, but yeah, I think they do a lot of other things as well.

Nov 2, 2015

you'll get to wear flip flops and t shirts to work at DE Shaw...that's enough for me.

Here's the thing. If you can't spot the sucker in the first half hour at the table, you are the sucker.

Nov 2, 2015

^ditto with TS

Nov 2, 2015
cluoren:

are posting positive returns even during crisis

hahahahahaha, no.

Nov 2, 2015
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  •  Nov 2, 2015