Good places to begin career as a quant
I'm tired of being poor (academia lol) and I've always been pretty into markets, so I'm leaving to go work as a quant. Got a few offers from some of the bigger / well known funds and prop shops (think along lines of DE Shaw, Jane Street etc) and after negotiation first year comp looks very strong. From what I've read around here though it sounds like most quants cap out fairly soon after, so I've got a few questions for anyone in the HF space.
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Which of the big single managers are good for career progression within the fund?
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Which of the big single managers (if any) are good for learning about the full signal generation, portfolio construction and execution process?
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How hard is it to get a PM seat at a multi manager from a quant background?
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Of the quants who do get a PM seat, how many survive? I've heard numbers tossed around that 75-80% of those who get a gig don't last, and I'm wondering if quants are better or worse than fundamental guys in that aspect.
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(Bonus Q) - Long shot, but does anybody know much about Renaissance now? No offer or anything, but a professor I know found out I was leaving for finance and said he could get me in touch with some people over there. I know they and TGS are the best and all, but I saw somewhere here (or reddit / hackernews) saying that people who joined in the past decade or so don't see much upside. It makes sense given their brutal nondisclosure and noncompete - what incentive do the higher ups have to pay someone new more than 300-500k? And people go on about the chance to invest in Medallion, but they have enough money to fill Medallion many times over, so I can't imagine why the cap for a new guy would be any higher than 0.5-1M. I asked the professor, but he wouldn't give me any numbers, wondering if anybody here has any clue.
An answer to any of the questions would be fantastic, thanks!
1. Any of the large single manager quant funds will be incredibly corporate. You will get a title, and there will be 5 layers of management above you. You will get promoted every couple of years assuming you hit some predefined measures and don't suck. And you're pay will cap out probably in the high 6 digits.
2. None. These funds are intentionally siloed so no one team knows how the entire secret sauce is made. You will either focus on signals, portfolio construction, execution etc. Unfortunately the secret sauce is in none of those individual areas, it is in how everything fits together. No one will teach you this, even at a pod shop. You have to have enough curiosity to figure it out.
3. Depends. If you are eloquent, worked at a couple big name shops, went to a good school it's not that hard. It's much harder actually being successful once you have the seat.
4. Very few, probably even fewer than the 20-25% you quoted. At each of the MM, the majority of returns are driven by a few teams (e.g. Worldquant at MLP). Every other team is just noise. Management functionally takes flyers on each of the teams, there is a very low, long tail probability that a team will become successful, but the vast majority blow up after 1-2 years.
5. No idea, but I would guess Rentec is probably the highest Sharpe trade you could make for a career in quant. It probably doesn't have the highest expected returns, but it is stable, pleasant, and pays extremely well still.
Thanks for your detailed answer.
Just gonna try get this straight, here's my interpretation of the MM business model:
You're basically running your own fund, whose client universe consists of the management. They take a cut since they're taking care of raising the real capital, legal and some infrastructure. They give a lot of people a shot with a small book, expecting that some portion of these people will be good enough to eventually go on to run a bigger book whose profits offset the losses of the 80+% of guys they fire.
Is that roughly what goes on? If so the failure rate would make sense, since you'd then expect it to be only a little lower than the failure rate of new funds.
interview at Renaissance and ask them those questions yourself...and then report back here
I'll try and get the prof to arrange a meet, will report back with whatever I can.
They've both been at max capacity for a long time now so they don't really hire. Not sure what your field is but they generally hire people with very specific backgrounds, albeit from different fields of science. In any case, see if your professor can reach out to them. If you apply and end up getting an interview, they'll contact your references anyways.
I'm in mathematical physics, the professor is fairly well respected in the field, and Renaissance may have possibly tried to poach him some time ago. The work we do certainly has no application in either place. Do you know what fields of science each of them are keen to recruit from these days? I hear Renaissance at least used to be big on math, but looking around it seems they care a lot more about domain knowledge and are into their big data astronomy and signal processing/information theory.
I work in the latter area and they were interested in some of my work several years ago. In general, they seem to be open to different fields but want somewhat established people who have a record of achievements in their field. The tech world also has similar pay for this background today.
Gave up on getting that millennium prize huh?
Most of rentech's recruits need a couple years of post-doc/outputting good research to be approached. Not impossible straight out of school, but extremely hard.
There's PDT, TGS, CFM to round out the big 4. Try talking to them as well.
Do NOT join worldquant, that's just a signal factory. Unless you're an experienced PM, it's a horrible place to start your career.
Despite the username I wasn’t working on that problem - many better minds than mine have had a crack 😂. Thanks, I’d never heard of CFM, I’ll check that out.
I’m in a postdoc at a strong place for my field right now with a couple decent papers. Are you familiar with Renaissance?
as much as a math guy who doesn't have a phd -> bit more than most people
CFM is the closest thing Europe has to rentech (most jobs are in Europe though). JP is a legend in the math community
There are smaller firms you never hear about who have done very well too.
Lol, CFM?
They don't belong in there.
Rentec, TGS
then PDT and a few others in second tier; I would include certain core groups of 2sig and citadel here but quite different model though performance wise on par.
I'm not sure if CFM was a joke or not but it is no where close to where the others are.
really? did their performance suffer recently or something?
not meant as a joke, they have hired a lot of math talent and they have done pretty well AFAIK. JP is very respected in the European quant finance community
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