Photo: Photo by Gillian Reagan
Whether you’re looking for your very first job, switching carers, or re-entering the job market after an extended absence, finding a job requires two main tasks: understanding yourself and understanding the job market.I received several emails asking me for advice regarding quant jobs and various companies that are hiring, and what they are looking for specifically. I usually pass on the questions to someone I know and then reply back to them.
Over the last month, I have gotten an increased number of such emails. I decided to compile these questions and made some of my own and decided to ask some people who would be better suited to answer these questions.
Over the course of my blog, I have had the pleasure to build some really good contacts. It has given me a chance to meet and talk to several Wall Street executives. I decided to send my questions to some of them to get answers to the most frequently asked questions.
They are more than happy to provide guidance to members of quantnet.com, on the condition that their names are not displayed due to their firm’s policy.
Can you please tell us a bit about your company and the department you work in?
- Managing Director 1 (MD 1): Market risk, major investment bank
- Managing Director 2 (MD 2): The company I work for is an International Bank involved Equities, Fixed income, FX and Commodities trading in addition to their IB activities. I work in the commodities trading division of the bank running a commodity index portfolio.
- Capital Management Firm Partner: I work in a capital management firm. The fund is a Hong Kong based corporate finance firm that provides wealth management and risk hedging advisor services. I worked in equity and derivatives trading desk before, and right now I am working in strategist department with some talents, give advice to other traders and analysts. Plan and make future trading ideas and decisions. I do most of the hiring for the equity division. We also have a relatively new and growing operation in North America with operations in Toronto, Chicago and San Francisco.
- CEO: My company creates quantitative investment strategies and sells them to high net worth, institutions, pension funds, endowments, etc.
What are the typical jobs that you interviewed candidates for over the course of your tenure as a hiring manager at your firm?
- MD 1: Desk risk management, model review, market risk methodology, market risk reporting, market risk quant analysis, head of model review, risk intern, risk analyst, administrative officer, treasury capital analyst, IT project manager
- MD 2: I generally interview candidates for various types of positions: analyst, trading or quant positions. As an analyst, your job is to provide support on the desk, analysis of the markets, etc. A trading role means that you will, from the start, be involved on the trading side of the business and may be given your own book to manage risk and client flow. As a quant you are expected to operate on a more analytical level and be able to understand the various models used for pricing the various products traded on the desk.
- Partner: Traders and analysts.
- CEO: I’ve interviewed potential researchers, programmers, strategists, and traders, over my career. There are several MFE/MQF/MSCF/etc programs mushrooming all over the world. How do you distinguish the good from the bad and the ugly?
- MD 1: Anecdotal based upon the people I’ve seen. I had one person from a top-rated program turn out to be a real dud. That has biased me against that program. I’ve also had a great person from a poorly-ranked program who leads me to grant the benefit of the doubt. On the other had, I have found CMU and Wharton people to be consistently excellent.
- MD 2: I generally distinguish the good programs from the bad ones, when I find that the candidates coming out of the good programs have the right balance of practical and theoretical knowledge around quantitative finance. Candidates that have the analytical background and are able to quickly implement models and demonstrate their relevance to the business. I consider the “bad programs” the ones that just immerse candidates with enormous amount of theoretical information with very little hands-on or practical training.
- Partner: Depends on the skills of candidates, not depend on the programs.
- CEO: Honestly, I really have not focused on where they came from as long as it sounded nerdy and I’ve heard of it before.
Before, it was possible for MS, PhD in non-finance subjects like Statistics, Computer Science, etc to get quant positions. Is an MFE or an MFE type program a bar for those positions now? If there were two candidates, one MS in a non-finance subject and another with an MFE and all other credentials were at par, would the MFE have an obvious upper hand?
- MD 1: Not at all. MFE’s tend to be light in statistics, strong in programming.
- MD 2: I generally do not really have any sort of bias when it comes to considering a candidate with an analytical background, whether they have a non-finance degree or a pure MFE degree. What I generally look for is the ability to think “outside the box” or be able to withstand the stress of a trading environment. I also look for candidates that can potentially turn into good “risk managers” on the desk. I also look for a sense of passion to learn and to continue expanding their knowledge base. (Generally I find candidates with MBAs to be a little more obstinate in their adherence to looking at things from the Market Efficient Theory side).
- Partner: Actually, depends on the interview. I can not make a decision only depends on the degree but not the skill. We need some one really can do the job and get the profit. But if you compare MS or MFE, I may choose MFE, but if you choose MS from MIT or a MFE from a university and I never heard about it, I may consider about MS more than MFE. However, the final decision depends on interview results and skills, not programs.
- CEO: Doesn’t matter to me. I look for high GPAs for one. It says that the candidate took school seriously, then I look for something special about the resume, like first place in maths Olympics etc. social things like class president not as interesting to me.
What mathematics topics do you believe are essential to quantitative positions?
- MD 1: Calculus, linear algebra
- MD 2: A solid foundation in Stochastic Calculus is a must. Also , having backgrounds in areas like “Information Theory”, “Game Theory”, and pattern recognition or signal processing are huge pluses.
- Partner: For trading, the basic mathematics should be a given. Usually I prefer if they have a strong grasp on bond mathematics and basic financial mathematics too but most of it is just about understanding the markets.
- CEO: Minimum requirements, statistics, probability, econometrics, time-series, calculus, etc. Just the basic core stuff.
What technical skills do you believe are essential to quantitative positions?
- MD 1: SQL, inference, spreadsheet expertise, EDA, common sense
- MD 2: Knowing how to program a complex quantitative model efficiently and accurately. Sometimes I come across that are brilliant analytically but have very little programming skills, which means I need to hire an additional person to be the programmer. I highly recommend having several modern programming languages in your tool bag.
- Partner: C++ VBA, modelling skills.
- CEO: Good programming skills in R, Matlab, C, or C++.
What do you believe are the top 5 credentials that you look for when interviewing a candidate for a quantitative position? Programming? Strong Mathematics? Good communication? Brand name University? Etc.
- MD 1: Communication is perhaps the most important. There are gazillion who can’t express themselves clearly. Having them on your staff is like having a 1 million horsepower engine that has no transmission to harness its power. Brand name school helps. It means there’s a higher probability that the person is smart. Not programming. If I want a programmer, I’ll hire one. We can train good people with all the programming skills they’ll need. For anything other than model review or model development, I don’t need a PhD in maths.
- MD 2:
1. Strong Communications Skills
2. Strong Mathematics
3. Strong programming skills
4. Ability to think out-side the box type of mentality.
5. Good interpersonal skills. Don’t really pay much attention to the brand name of the school they went to.
- Partner: Good communication, passion, knowledge and skills (not only in programming or mathematics, but also cover some other area), imagination ( thinks about using different methods to find the solution), and the most important thing is that HE really likes maths, programming and this job.
1. High GPA, tells me they took their studies seriously,
2. “The Fit”, will the candidate fit in with the others in the group, or will he/she be too difficult to assimilate into corporate life
3. Past accomplishments and anything that took initiative
4. Charity work, or mentoring shows maturity and selflessness
5. University is the last thing, although I notice that I’m kind of partial to places that I’ve been to. (but that shouldn’t really matter, as long as (1) is satisfied.)
What are the most common misconceptions of people seeking this line of work?
- MD 1: Soft skills are as important as hard skills. WE DON’T CARE IF YOU HAVE A PRM/FRM/CFA–THOSE REPRESENT MEANS AND NOT ENDS. People think it’s the fast track to big bucks. It’s not. It’s the fast track to mediocre bucks combined with high stress and long hours. Do this if you find it inherently interesting. Otherwise you’ll be a miserable, overworked, geek bouncing from firm to firm chasing the money.
- MD 2: That they will be moved into a trading role right off the bat. You have to earn this privilege over time.
- Partner: Hmmm, there are lots of misconceptions and I am not really sure which one is most common.
- CEO: You just have to be smart. You also need some soft skills so people want to work with you. I think every hiring manager is looking for someone smarter than him/her and nicer than him/her. If you can show that you can do the most mundane tasks without complaining, and can master the most difficult tasks without getting a big head, then you will get many offers.
How important is having previous internship experience for an entry level job? How do students with no finance experience show they are worthy of the jobs too?
- MD 1: An internship helps, but isn’t crucial. Inexperienced people should do their homework. Don’t tell me you’re interested in fixed income analytics and equity research and foreign exchange modelling. Which one? Why? Prove to me you know something about the business.
- MD 2: Far more important for me is their technical and quantitative background, the business side of things can always be learned on the job. Much easier to teach a candidate about the business than to teach them about Stochastic Calculus.
- Partner: It is really important to have a internship experience for the future jobs. Students need to show their skills to connect maths with real market, and actually sometimes head of quantitative department would like to hire someone without finance experience, but really like mathematics and find solutions of puzzle.
- CEO: To me, that’s not that important for junior positions, it just shows that you know how to behave in a corporate setting. If you have no experience, show me something you did. Show me a model you’ve built and what you know about back-testing, market microstructure, research design, about being creative. Show me one of your research working papers–when I read them I can tell what the candidate can and can not do. Resumes look very similar at the top-end of the spectrum.
Where do you think the largest job growth is within the quantitative finance industry? Risk? Structured? Trading? etc.
- MD 1: Risk for secular growth. Growth in trading and structuring tends to be cyclical. Marginal people often get hired here and are the first to be fired.
- MD 2: I think the largest job growth will be in Risk and in Trading. Given what’s happened in the world in the past few years, there will be more likely a movements towards better Risk management and Trading as opposed to the creation of more complex structured products.
- Partner: Risk Management.
- CEO: As regulation continues to gain steam, risk will always be a large employer of financial engineers. I personally like the trading part, creating new models and implementing them but I have found that this is not for everyone.
What is the best way for an entry level candidate to secure a job at the large investment banks? Through recruiters? Applying on the website? Campus recruitment? School Career Services?
- MD 1: Through referrals. Network.
- MD 2: The best way to secure an entry level type of position in the large investment banks is through a combination of the use of recruiters as well as campus recruitment events. Attending industry specific events are also an excellent way to meet industry experts that can provide guidance.
- Partner: Relationship and networking. Not only from campus recruitment, but also from some other places, like IAFE events, meetings, or even church. Candidate needs to show something to prove skills and know how to manage relationship. It is the best way to get the interview. Sometimes campus recruitment or school career services may be a choice, but you need to make yourself stand out of the line.
- CEO: Network your alums–head-hunters can be a waste of time, but there are a few good ones. For entry-level jobs, you can just Google “quant jobs” and find a ton of listings, then just keep applying.
How important is networking for entry level candidates? What are some possible networking venues that you would suggest?
- MD 1: Networking is crucial. GARP, PRMIA, conferences, newsgroups, blogs. School, too. Talk to your professors.
- MD 2: Attending industry specific conferences I have always found to be excellent places to meet and network with people. These types of activities are normally used by industry participants as a means to recruit candidates. It also gives candidates a better understanding of the types of issues and problems that are being addressed in Risk Management and in Trading. From experience, I have always found these to be the best places to network.
- Partner: As I said above, it is really important not only for an entry level candidate, but also for other managers, bankers, even traders. For the best venues, I am afraid I do not have any good suggestions, but if you can ask your professor to go out and have a drink, you may find the answer.
- CEO: I think networking is important, but probably for more senior level positions. Junior just entering the industry can find tons of open listings just using the Internet.
Thank you for your time. I greatly appreciate it. Any last parting words that you would like to leave us with regarding securing a job at a company like yours?
- MD 1: If you put it on your resume, be ready to explain it. I’ve dinged many people for stating they knew how to do Monte Carlo simulation, but who couldn’t tell me what a random walk was (for time series MC) or what a Gaussian Copula was (for a VaR or credit risk MC).
- MD 2: Sometimes securing a job at a large IB may not be possible in a certain situation, but that does not mean that you many not take a job at a technology company first and get an experience that help you later on to secure an even better job at an IB. It is always better to gain as much experience as possible in any type of job and work toward eventually getting the ideal job that you desire. The more experience you can get under your belt the better. From my own personal experience, before I landed the position I truly desired as a Trading Manager, I went through various career changes along the way. These career changes have over the long run have helped me gain a better appreciation for managing people, as well as managing risk on a trading desk. Spending time learning about the ‘soft” skills can be time well spent.
- Partner: Study, network, networking.
- CEO: Show me why you are better than everyone else that has a resume and test scores that looks just like yours. Show me one thing that makes you unique in all the world of quants. Good luck!
I hope this helped with any questions any readers had.
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