Path to Quantitative Trader at Hedge Fund

I am currently a high school junior, and I know this is an extremely competitive field, but I want to be a quantitative trader at a firm like Renaissance Technologies, Two Sigma, Citadel, DE Shaw, etc. 

  1. An article titled "Getting a Job in a Top Tier Quant Hedge Fund" on QuantStart mentioned that it's better to get a PhD in a pure research field like Maths/Physics/CS/Engineering instead of getting a MFE, but other sites such as Mergers and Inquisitions have said the exact opposite, claiming that it's better to:
  • Complete a "mixed" technical degree, such as something that combines elements of math, stats, and computer science. A pure math or physics degree will be much more difficult and won't necessarily provide a big benefit.

What is the community consensus on this? (sorry I am new here, and cannot post any links)

2. For undergrad, should I be applying to a pure maths course or a maths with finance/statistics course? For example Imperial College London has these undergraduate courses for maths:

  • BSc Mathematics with Statistics for Finance
  • BSc Mathematics with Statistics
  • BSc Mathematics with Applied Mathematics/Mathematical Physics
  • BSc Mathematics with Mathematical Computation
  • BSc Mathematics
  • BSc Mathematics (Pure Mathematics)
  • BEng Mathematics and Computer Science  

Could anyone advice me as to which courses I should be applying to?

3.  What are the various career paths to a quantitative hedge fund? I'm thinking of paths like investment banking, equity research, etc etc...

An article on 80000hours said that

  • To enter the industry, initially you'll spend 4-8 years working as an analyst. The ideal path is usually said to be 2-3 years at a top investment bank, then 2-5 years working at a hedge fund as an analyst. In these stages, you'll be paid typical investment banking salaries (perhaps $100-$300k). An alternative but slower route is to continue in investment banking until you're known as the best analyst in your sector, then switch.

 but this is for a traditional non-quant hedge fund, so I was wondering how the career progression for a quant fund compares.

4. Lastly, if anyone knows any quantitative finance jobs (maths/stats/cs) that involve some degree of (preferably international) travel, please let me know!

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Comments (58)

  • Analyst 1 in AM - Other
Mar 21, 2021 - 12:43am

The only thing you should focus on is getting into a top target: near-perfect SAT/ACT, superb EC's, captivating story. Maybe in your free-time learn to code. But, seriously, focus on ensuring that your standardized test scores place you in the top 1-2% of all applicants. Since it is substantially easier placing into any of those firms from Harvard, Wharton than it is SUNY Albany

Mar 21, 2021 - 5:46am

It's good that you have an idea of what you want to do but your main focus should be developing yourself intellectually and socially. This also includes finding out what you actually like doing. Life is a marathon and those who wake up every day enjoying what they do will get much further. Plenty of extremely talented people have had this fixed route inside their heads and ended up with a burnout after one year on the job. Many are so insecure they only care about what other people think and never consider that it is important to ask themselves the very fundamental question whether they actually enjoy what they're doing.

As per your questions;

1) Don't take advice for L/S "traditional" hedge funds (second quote) if you want to end up in a quantitative hedge funds
2) I agree that a "mixed" education, where you get strong mathematics and plenty of programming practice, is better since it probably gives you a better basis, but I'm an applied math guy myself. This would include applied math and the BEng one.

Good luck

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Mar 23, 2021 - 12:22pm

Disagree on 2, MFE is really common and not views as positively by Quant shops vs maths physics or cs 

Offshore liffe
Mar 21, 2021 - 10:15am

As mentions above, firms appreciate great SAT scores (99% percentile), a top university, coding, and math skills. Many people achieve your desired role directly from university. I wouldn't worry about $100 or even the cost of a top school, given the high salaries in your desired field. 

Mar 21, 2021 - 7:27pm

I agree that it is by no means necessary to do quant, but for what it's worth both paths can lead to great success. There isn't a huge difference in comp between quant PMs and fundamental PMs. 

Gun to my head I would say fundamental makes slightly more money on average but within group heterogeneity is so high that one should just pick whichever strategy he/she thinks they'll be the best at. 

Mar 21, 2021 - 12:14pm

Couple notes from my experience (by no means representative for the whole space):

  • Getting into a top TECHNICAL target is by far the best thing you can do right now. It will make getting looks for these seats out of undergrad much easier, and in the event that you decide you want to pursue a different path (never met someone who's pre-college plans survived first contact), you still will have a world of opportunities
  • A PhD isn't necessary - there are many good seats (even on the research end) that open up every year for fresh grads - you just have to be hungry enough to land one
  • Focus on developing a broad set of interests and hobbies outside of technical spaces / finance. Contrary to popular believe, getting in and surviving in this field isn't all technical skills - being generally likeable and interesting is a huge leg up in any walk of life. This is something that will pay more dividends than any technical skillset - be someone people want to be around

As far as quant jobs themselves (or really any job), try to be in the role that is seen as driving revenue / PnL. You'll almost always get higher pay, more amenities, more respect, greater optionality, and faster career growth. Research at  T2/T3 HF is almost always better than risk at GS.

"one for the money two for the better green 3 4-methylenedioxymethamphetamine" - M.F. Doom

Mar 21, 2021 - 10:46pm

I will try to get into a top technical target as you say, but of the undergraduate courses at Imperial I listed above, which one do you think is best for quantitative finance? Is it a more general maths degree like "BSc Mathematics"/Pure mathematics, is it a stats/finance course like "BSc Mathematics with Statistics/Statistics for Finance", or is it a CS course like "BEng Mathematics and Computer Science" or "BSc Mathematics with Mathematical Computation"? 

 
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Mar 22, 2021 - 11:03pm

I'll flag my answer for some personal bias off the bat.

If you want to be a quant, I'd avoid any major that has "finance" in the title. The best quants are usually a mix of top-tier CS and very solid math. If you have to prioritize one or the other, CS is more important. Of the items you listed, BEng Mathematics and Computer Science sounds good. That being said do what you are interested in, that's the only thing you'll ever have a shot at being really good at.

"one for the money two for the better green 3 4-methylenedioxymethamphetamine" - M.F. Doom

  • Intern in IB-M&A
Mar 21, 2021 - 10:55pm

Agree with the "don't survive the first contact". For OP, as an example, I wanted to do engineering in high school, spent 1.5 years in university thinking I want to do ER, and here I am interning with in IB this summer. 

May 10, 2021 - 8:07pm

Getting into a top technical isn't that hard if you can stomach grad school.  It's easier to get into competitive masters programs, but then again I almost had a 4.0.  IMO it's hard to do anything as a high schooler that sets you apart so it's mostly luck

Mar 21, 2021 - 10:51pm

Coming from an L/S guy (I've talked with some quants about this)

Edit:   When I said that "you don't necessarily need to go to a formalized class" it doesn't mean a class won't help.  Especially for the advanced programming part it'll be much better with a mentor/support group.

You should definitely try to focus in math and programming.  Programming is one of those things where you don't necessarily need to go to a formalized class and u can teach yourself the basics and there are many resources for this.  Like the poster said above, getting into a top school (preferably those known for tech like Stanford or MIT) is very important.  While you're in high school also maybe try to experiment and make an algo? 

Also remember to be social, quants are usually thought of as shy and introverted.  Even for quants being good at presenting yourself can go long ways.

About your degree, imo finance concepts like options and futures aren't too hard to learn especially if you're able to digest quant-level math/programming so I would say you don't really need to do a degree in finance, still take some classes in finance tho, could be helpful later on.

Mar 24, 2021 - 12:44pm

Pure systematic funds like Rentec don't have 'quant traders'. Their traders are basically ops guys who monitor the screens tweaking parameters and interfacing with banks/brokers.

Mar 24, 2021 - 2:30pm

Realize that you could do everything correctly and still not break in. These places are tough, but there's nothing wrong with developing yourself, learning something everyday, and challenging yourself. I got a perfect SAT score and come from a good school and I'm still struggling to get a quant job, because I'm a dime-a-dozen in this industry. This stuff is hard, but its great that you are starting early. I agree with the other posters in that your main focus right now should be getting into a good university, and then think about the PhDs and stuff later.

Mar 25, 2021 - 1:00am

Dont do PhD i think its a waste of time. By the time you finish the PhD the one who did a masters in computer science will be ahead of the game already. Study Math and Econ and masters in engineering computer science. Or study Computer Science and Math. Whichever gives you a 3.7+ GPA. 

Mar 25, 2021 - 7:44pm

I'd agree not to do a PhD only to get a quant job, good luck putting in the grind to do good quality work without being passionate about your subject. But unfortunately there are a lot of quant research jobs that won't be particularly interested in you without a PhD unless you're a superstar (and no, a high GPA at even H/P/M doesn't cut it by itself).

May 10, 2021 - 3:03pm

MFE student from one of top programs as per QuantNet - figured I would offer perspective for you and anyone else interested in MFE/Quant work. Coming straight out of undergrad so I have limited work experience but I'll share what I have seen and what I have noticed from other students (with and without work experience).

First, regarding your major decision, I would highly recommend some sort of applied math and possibly a double major/minor with programming. Most of the students who do not come from this background have struggled a lot with the coursework, and it also seems as though relevant math research/experience also helps with getting buyside roles, even with limited experience. This isn't the end all be all, just having the name from an Ivy/ top tier MFE program would surely get you some looks/interviews, but it might help you convert these interviews/pass online hirevues etc.

Second, regarding whether or not you need a PhD/MFE to break in - no, of course not as much as it might pain me to say this for personal reasons (IE tuition). I know of at least one person to get a job in a buyside role straight out of undergrad, but he knew what he wanted to do, had relevant ECs and by all accounts was a superstar. Is it possible for you? Certainly. Somewhat related to your third and fourth question, if you aren't able to get a position right out of undergrad, a normal career path might be:

1. Undergrad Math/CS

2. 2 years work experience at investment bank doing QR or developer role

3. Top MFE program for 1.5-2 years

4. Buyside role

May 12, 2021 - 7:43pm

I would advise against getting an mfe whether at top program or not if you want to break into the field. I've looked at the placement report of top mfe programs and most of the graduates get placed into banks like morgan stanley and goldman sachs but not prop trading firms and hedge funds which pay a substantially higher compensation. If you also check on linkedin, most of the quants at these firms don't have a mfe degrees. 

May 30, 2021 - 11:39am

I am an incoming freshman going to a state school and was one year late to all of the information I learned recently regarding my field. I intend to find myself in Quant Finance, but have been careless and chose Finance as my current major. For anyone who has been through the whole college experience, my plan is to switch to a math major and eventually transfer to a target/semi-target school. I have an average SAT score with a 780 on math and a mid 600 English score which I intend to pull up to ~1520+. I would say that I have a strong math background and I am finding a passion in coding but besides the current grade situation and my major, is there anything else that I should do/start doing

Thanks

May 30, 2021 - 3:09pm

So I am currently an Imperial student (not in Math) and I would wholeheartedly advise studying for the MEng Math and Computer Science as your first choice (notice I said Masters level as most places do not consider undergrads and the extra year studying at the graduate level is VERY helpful). Also if you notice, a lot of the quant teams in the banks do not hire undergraduates - only Masters or PhDs. If this fails, the BSc in Maths and Statistics is the next best option because as a Quant Trader, the most valuable tools will be in statistics rather than courses in geometry, number theory etc. As mentioned by other people - definitely develop your programming skills be that in class or outside of it. 

If you are interested in the best work experience I would say firstly a summer internship at one of these quant hedge funds is the best route, however they're very difficult to get. The next best bet is working in a SWE role in tech to develop commercial programming experience. Keep an eye out for the (Undergraduate Research Opportunities Programme) UROP schemes at Imperial which allow undergraduates to conduct research internships with faculty over the summer. This research experience is very valuable and viewed favourably by the quant firms.

May 30, 2021 - 8:14pm

Hello, 

Thank you for your valuable insight. I intend to apply for the MEng Maths and Computer Science course as well. Regarding work experience, do you have any advice for a high school student? I don't think we can so easily get internships at quant hedge funds...

Jun 2, 2021 - 4:30pm

I don't agree with this. In the UK the perceived difference between a (good) undergrad and masters is not large and many firms are less picky about it than you claim. they realise that if you've completed a top undergrad in STEM or whatever then spending an extra 9 months learning about derivatives models etc isn't going to be a game changer. If your undergrad was not as strong a brand name as Imperial then you've made the right move as realistically that's where most of the value of an MSc comes from.

Lol whoever the student was that threw MS pls relax

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