Quant jobs in Hedge Funds: Differences between companies?
Hi all,
I am considering a move towards quantitative finance from a PhD in theoretical physics from a top university, and would love some insights into the differences between various companies. My first hand knowledge is very limited, and so I am particularly interested in what people in the field think of companies like : Jane Street, Citadel, G-research, RenTec, DE Shaw, Two Sigma, Hudson River Trading; and what are the differences within them?
Are quantitative research roles within these firms similar, or are there large differences going from a quant team in one company to another? And which ones are more widely regarded in the industry? I understand that all of these are among the top, with RenTec in a class of its own, but if you had offers from all of them (not that I do...), which one would you want to work for the most and why?
Also, I am mostly interested in modelling and research - not so much babysitting computer code and running existing programs. Is there anything to look out for when applying for a role to avoid those kind of jobs (which I hear are also quite common)?
There's a wide variety of roles within quant funds/firms. Some are high level research others are as you described babysitting existing models. The reality is that even with a PhD in theoretical physics, you'll likely have to do at least a bit of both of course. The prop shops that you listed such as Jane Street are market makers and do high frequency trading. Citadel does some of that but they also have strategies that have longer holding periods. Same for two sigma. The nature of the research is highly dependent on holding period. IMO the most interesting work being done is research around holding periods of weeks - months.
RenTec is the most highly regarded of the firms you listed, though all are highly regarded in general. RenTec is the most secretive/difficult to get into. Though, with a PhD in theoretical physics you would fit right in. Few people outside the firm have any idea what goes on at RenTec.
Thanks a lot, that's very useful information! I would have thought high frequency trading would involve more technical challenges, but maybe the modelling/research involved for longer holding periods is indeed more interesting. How about G-research, is it similar to the other funds ? My understanding is that they do not really manage investments themselves, but they seem very focused on machine learning and research which makes it quite appealing to me.
Sorry not familiar with G-Research so don't have any input there. From my understanding HFT is a very mature field at this point whereas people are still struggling to figure out how to use big data/machine learning in application to portfolio construction. More opportunity to make a mark there in my view.
Looking on G Res website your assertion sounds correct. Similar in a sense to the WorldQuant model (see their site)
There are a lot of technical challenges in HFT but many are closer to engineering than math/stats research. Fast software/hardware, wireless networks, data center configurations, and microstructure such as feeds all matter a lot and are sometimes interesting problems but can also be tedious or not particularly quantitative even if highly technical. There are a lots of challenges like how to modify your models if some cable or wireless links are down or if some exchanges are closed for holidays.
Most of Jane Street front office are trades with a smaller number of researchers. G-research is somewhere between high frequency and mid frequency while most of the hedge funds focus on longer horizons (with the partial exception of Citadel).
differences in quant HF jobs (Originally Posted: 11/04/2011)
Hi! just wanted to grasp the difference between these 2 jobs:
1) quantitative analyst Ex.:http://www.quantfinancejobs.com/jobdetails.asp?dbid=&guid=&JobID=11678
2) quantitative strategist Ex.:http://www.quantfinancejobs.com/jobdetails.asp?dbid=&guid=&JobID=11852
of course i do realize that the descriptions r indeed different but even while you figure out a method to dominate the market, aren't you implicitly working out a strategy?
besides, would this career path be correct: QUANT analyst >> strategist >> PM ?
thanks in advance!
The first one sounds like a support role, i.e. a desk quant in equity derivatives at a bank. The models may be used for pricing and analytics, but deployment of firm capital will probably be done by a trader who loosely uses the models as input ("discretionary trading"). This role is not likely to lead to a risk taking/trading/PM position.
The second seems more like a business role within a quant trading team. The models developed will be directly used, i.e. they ARE the strategy ("systematic trading"). This role is more likely to have risk taking/trading/PM elements to it and thus lead to such a position.
PS Don't use terms like "dominate the market". You'll get dinged immediately. Not kidding.
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