Moving to a quant fund - Job Market Outlook?
I graduated from undergrad about a year or so and have been working as a data scientist in a financial company. Couple of my seniors have moved on to buy-side quant positions and within a year or two I would like to do the same.
I'm interested in funds that use lots of data science techniques (ie. Citadel, Two Sigma).
I'm particularly interested in learning more about the following:
1) Where would the job market for these positions will be in the next couple years?
2) What are some cooler smaller funds that I should know about? (Their strategies and culture).
3) What are some funds that I should definitely avoid? FYI, I don't mind super intensive and aggressive cultures as I actually thrive in such places. Just want to avoid sinking ships that can't be salvaged or places that are over-the-top toxic.
Research Associate in Research - Other, way too quiet in here. What about these resources:
More suggestions...
If those topics were completely useless, don't blame me, blame my programmers...
Depends on your career aspirations - if you want to go out solo 5 years from now(or have the option at least) , I would suggest you avoid places like Two Sigma, Citadel . You are much better off joining a small team(5-10 people) running their strategies within a MM platform(Millennium, Exodus etc). You will gain a holistic understanding of the business and be in a much better place to set up your own pod 5 years down the line. With Two Sigma, Citadel, it would be just another "data science" job - but then why not a tech company
In a quant fund you are either paid for your tech/data science skills or your ability to drive pnl(the two are related but not the same) but the big bucks are always in the latter. For the former you are better off joining a tech firm in most cases. So your ability should be jump in to a role that allows you to be a pnl driver asap
Thank you! How do I know which funds are more like MM and which ones are more like Citadel? I was mainly thinking about Citadel and Two Sigma like shops mostly because they seem to be the only ones who hire people with bachelor's only.
Otherwise seems to require 3~5 years of experience at least. Not sure if YOE and education is that big of a requirement?
Do you think that HF business is much like other businesses? Right now, I'm in a small team and I'm learning a lot about how the business is done by taking on more business responsibilities outside of typical data science roles. Idk if that'd help. Couple of my seniors who were taking on those roles actually moved to Milleniuk like funds so maybe that helped?
What does it mean to drive PnL exactly? Would it be more client facing? Generating alpha? Or both?
Pretty much every major quant fund has hired people with bachelors only except maybe research at Renaissance. Maybe TGS as well but I don't know anything about them.
A lot of the quant pods within MM platforms would be totally okay hiring people only with an undergrad degree provided they have strong programming skills. Unfortunately there is no good way to reach out to them(perhaps recruiters may help?)
Driving the pnl(perhaps "owning" the pnl would be a better way to put it) would mean that you are able to replicate the strategy at a different fund if the need be. Btw none of these roles are client facing so that's not where you need to focus on. Most researchers at these big funds are just another cog in the wheel. Their alphas may be super useful for the fund's strategies but they may not be able to generate a high sharpe pnl on their own .
HFT firms(Citadel Sec, Jane Street, Jump Street) are also a good option as most people there are directly responsible for their PnL . The key idea here is that after working for 3-4 years you should be in a position where you can replicate your strategy at a different fund . This gives you a lot of options and explosive growth . I have seen many senior folks(5+years) from Two Sigma moving to other funds but have barely been able to generate any PnL (In all fairness, Two Sigma name has definitely helped in getting them huge sign-on/guaranteed bonuses in year 1)- that is a situation I would definitely want to avoid
Well, being a "data scientist" at Citadel, Jane Street or HRT is much more highly paid that in tech.
Do you have some numbers to compare?
Currently very underpaid at a firm ruled by fundamentals
You're spot on with respect to Two Sigma and overall as well--my understanding is that people at 2Sig are very well paid esp at junior levels but don't get to see much of the whole picture. However, Citadel GQS is silo'd (could be wrong) and a great place to work from a comp + learning perspective. They also have quants in GE, FI, etc but I am not sure if they drive pnl. Imo pod is the way to go (exception is longer time horizon discretionary) if you want to learn about alpha and portfolio management, and especially so for quants.
I would also add that market making (Citadel Securities, HRT, Jane St) attracts a lot of quant traders who are directly responsible for pnl. That is a route that is worth looking into as well. Market making is a bit easier to get into than Quant HFs for an undergrad as well.
Interesting. How do you think that being a QR at market making shop like CitSec compares to HFs?
I mean that both in terms of exit ops and learning oppurtunities.
Be aware its kind of a dichotomy. Its nice to be able to see the whole process end to end in a true 'pod' setup at a multi manager, but that kind of setup usually comes with blow up risk- if your PM loses enough money usually the whole team gets fired including you. So pretty much the only decision you have to make is whether you think your PM can make money- literally everything depends on your PM. On the other hand, if its more of a single manager setup, its often more siloed, but more stable.
If you end up with a bad PM in a MM, is it easy to move to a different team?(internal transfer).
Would that differ depending on the fund?
I have never heard of someone transferring pods
Depending on the MM, they sometimes will try to place the analysts into different pods if the PM blows up. However with quant, the firm usually has co-ownership of the IP created during the stint, so often they would rather just have their guys try and re-monetize it vs. effectively hand the IP to a different pod.
i'm not super familiar with multi-managers, but I think as a general case its rare to move teams. If your PM gets fired you may be given the opportunity to interview for other teams, but I think its not a given you will get a new seat.
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