Moving from Quant researcher to Quant PM

Hi.

I have been working at a large Quant hedge fund as a researcher for about 5 years. My next big target is to move into a Quant PM role. At my current shop this is basically impossible, since this is large fund with only a few PMs, who all have more than 15 years experience in the industry. Career growth for a researcher stalls after 4-5 years.

I wonder what's the best way for me to proceed. Over the last years I worked very closely with one of our PMs and could learn a lot about what this job entails. I got exposure to the full research cycle and would be able to set a strategy pod up myself at a new firm. However, I do not have a PnL stream which can be attributed directly to me and if I read job ads most roles require someone to already have several years experience trading a strategy with a certain realised sharpe.

What is the best way for me to move forward? Have some of you made the move from Quant to PM and could you tell me about your experience?
What is the interview process like for Quant PMs? Is it similar to Quant researchers, i.e. lot of technical questions and brainteasers plus question the strategies to intend yo run?

Thanks for your suggestions!

Comments (6)

Most Helpful
Feb 24, 2019
CambridgeGuy1986:

What is the best way for me to move forward? Have some of you made the move from Quant to PM and could you tell me about your experience?

I myself came over from the sell-side, so this is 2nd hand experience but I do know plenty of people that have gone through the transition.

First of all, you want to decide if it's worth it. Being a PM is a very high risk proposition and the probability of failure is significant. I'd say that half-life for an average quant PM is 2.5 years, with 5 years being the point when you more or less reach a cruising altitude. For example, the strategies that you have - what do you think are the half-lifes of your alphas? What are the correlations and how mainstream is the stuff that you do? In short, what would you do if none of it works next year?

If you do decide that it's worth your time, the next step is to network aggressively. Don't look at the job ads, as most of these are posted by HHs who will be of no help (they, invariably, will want to place your into another research seat). Sooner or later you will find a few shops to talk to, especially if what you are offering is relatively uncommon.

CambridgeGuy1986:

What is the interview process like for Quant PMs? Is it similar to Quant researchers, i.e. lot of technical questions and brainteasers plus question the strategies to intend yo run?

Most of the interview is going to strategy-level discussions or discussing risk/infrastructure/process. Have a good development plan in mind, have a list of strategies with infrastructure requirements and deployment order, have ideas when stuff will work and when it will not etc. In short, have a battle plan and be ready to discuss it.

As you get more senior, you should get fewer and fewer brain teasers or programming questions. My prior would be that if someone does ask you a programming question at a PM interview, avoid that shop.

    • 7
Feb 24, 2019

Great advice, thanks a lot.
May I ask how many years experience you had before moving from the sell side into a PM position?
I assume you already had some strategies, with low correlation to traditional stuff from your sell side position?
Good point about the networking. Really need to get up to speed here as I don't know enough people yet. Would you suggest to directly contact people in PM recruitment and see if they might want to grab a coffee?

Feb 24, 2019
CambridgeGuy1986:

Great advice, thanks a lot.
(1) May I ask how many years experience you had before moving from the sell side into a PM position?
(2) I assume you already had some strategies, with low correlation to traditional stuff from your sell side position?
(3) Good point about the networking. Really need to get up to speed here as I don't know enough people yet. Would you suggest to directly contact people in PM recruitment and see if they might want to grab a coffee?

1. 15 years give or take. In retrospect, it would have probably been better working for another PM at first to learn that side of the business.

  1. Yes and no. A lot of stuff I used to do had to be tweaked to be more appropriate for the buy side.
  2. Yes, it never hurts. This said, conditions for PM roles vary a lot (anything from base salaries to risk parameters) so be ready to kiss a lot of frogs before you find that once price.
    • 2
Feb 24, 2019

From my (rather limited) understanding, you can also make the move if you have just a backtest. Although this obviously isn't as good as a real track record.

Feb 24, 2019
junior2012:

From my (rather limited) understanding, you can also make the move if you have just a backtest. Although this obviously isn't as good as a real track record.

If you have a back-test and experience, you can probably do it. If you just have a back test - "good luck!" :D

Mar 1, 2019