Hedge Fund Industry in Chicago - growing or shrinking?

I'm a late 20s analyst in systematic strategies (risk premia, alternative beta) at a fund in NYC. I'm considering moving to Chicago due to the increased affordability and viability of raising a family in the city proper. However, I'm concerned about the breadth of opportunities in Chicago and whether the city's hedge fund industry is growing or shrinking.

Outside of Magnetar, Balyasny, and Citadel (whose NYC headcount keeps growing more than Chicago's), I don't know of any other non-prop shop firms in the city with quant funds. I understand that nowhere will have the number of opportunities as NYC but I don't want to potentially be stuck in a job because of a dearth of options.

For those with relevant insight, what do you think of the current and future breadth of Chicago's hedge fund industry - particularly the quant side?

Which quant funds in Chicago may I have missed and what are their strategies?

Thanks in advance.


 

Because it's a liberal dumpster fire where you'll be taxed into oblivion, force fed intersectional drivel, and you and your kids will probably get accosted by some homeless smackhead after you accidentally step in his shit and needle pile? 

That's not even touching the real estate bubble and corrupt government misappropriation of said taxes.  If it wasn't so appalling it would be funny how much money they waste on self-inflicted problems and cause them grow at a rate that would make even the hottest SV startups blush.

 

Prop shops seem to focus more on intra-day strategies and market making which lend more to quant developers, which I am not, moreso than quant analysts. I also don't have much desire to run intra-day strategies. If I am mistaken in this assumption, I'd be happy to be corrected

 

Chicago is considerably more affordable than New York. Wouldn't mind working in Greenwich but living there is another story as it's not a very diverse area (as are most places in southern CT). The main sell of Chicago is that I could get a diverse urban lifestyle at a fraction of the cost, albeit with some concessions relative to New York

 

Yes but everyone knows its a tail of two cities. I have never once heard anyone complain about Chicago crime until we had these riots.

Club Cuvee and bottled blonde brought some shootings in river north but that was basically the only crime till the crazies came out out lately.

 
Most Helpful

Chicago is great and I love living here relative to NYC (I liked NYC too). Don't listen to all the nonsense about the crime. It's quite concentrated. You're very unlikely to be a victim of a serious crime if you are not affiliated to a gang. Chicago is a solid place to raise a family in a big city at a lower cost. Depending on where in Chicago you live, many of the public schools are of high quality. There are also some magnet school options that kids can test into for middle school and high school I believe.  Also, if you decide to live outside the city there are plenty of very affordable suburbs that are convenient for commuting into the city. 

LSV Asset Management and Ativo Capital Management are two quant firms in Chicago. LSV is a quant value shop that mostly hires PhDs in finance/econ. Less so from other STEM fields. The founders are from Booth. Most of their assets are in long only though. There's a bunch of other systematic long only shops as well. There's a group within UBS Asset Management and some others I forget. For purely market neutral stat arb, that will be more limited to the funds you already mentioned plus a few of the prop shops run such strategies too. 

 

Thanks for the insight - very helpful.

As a quant, do you ever get the feeling that, were you to leave your current job, the pickings would be slim?

Also, compared to New York, do you feel as though the decreased competition compensates for the narrow breadth of options?

 

Alyeska Investment Group is in Chicago. Looks like they take a concerted effort to make the firm opaque to outsiders, and it might be near impossible to break in. They manage ~$6 billion. I welcome anyone to comment on this firm if they have any info to add.

 

A lot of those prop trading shops in Chicago have been opening slower desks (by slower I mean hours to days holding periods) on the quant side that you can lateral into with the right skill set if a HF gig does not work out. However, the nature of work is still quite different (often more implementation than research focused) and seems pretty far off from the kind of work you're doing currently (it sounds like you're in factor land). 

There is no hiding that the opportunities in the quant fund space is fewer in Chicago (though maybe it is still second after NYC?). Trend wise Covid probably helps add some flexibility, but like you mentioned Citadel and others are definitely on their way out from Chicago and the factor based people (e.g. LSV) have fallen out of favor on poor performance over the last few years / are facing downward pressure on fees. I would probably guess it is overall worse than 5 years ago, cost of living wise Citadel Chicago used to be a nice arb, where any pay diff based on location was not really observable, but nowadays esp. with the higher turnover you pay for it by having fewer alternatives. 

 

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