Trodding The Path to Your Best Quant Finance Job
By Sriram Kannan - MSCF 2008 Head of Risk, Silver Point Capital
"Two roads diverged in a wood, and I took the one less traveled by, and that has made all the difference..." - Robert Frost.
These words have served as a guiding post for most of my career. It may be counterintuitive for a risk manager to be favoring paths less trodden. The more frequently traveled paths may be less risky, but I think about it from another angle: If the rest of the world is piling on in one direction, maybe the crowd mentality will make you complacent to the risks in that well-trodden path and oblivious to the upside in the less-trodden one.
In a very cliched manner, when I refer to "trodding the path,” I have learned that the best jobs I have landed is when I follow the "TROD" principle. Over decades of both interviewing for positions myself and interviewing a plethora of candidates for positions, I have come to believe that there are four key tenets of any job:
T - Title
R - Role
O - Organization
D - Description
A job has multiple facets and can be marketed in many ways. You may be pleasantly surprised to find a quant role in a classic fundamental shop that can turn out to be super interesting. When I got a call about a risk role in a distressed credit hedge fund, my first reaction was "I am a quant, what kind of models will I be building for an organization that deals mostly with bankruptcy situations?" Wow, was I wrong!
So let's examine the four key tenets of every job - TROD.
No doubt the job title is the starting point. If you are searching on a job site, the title is almost always one of the main options. Some common quant job titles are Quant Trader, Quant Portfolio manager, Desk Quant, Risk Analyst, Data Scientist (and the list goes on). Unfortunately, the title itself may not disclose much about the actual job role or function. Which brings us to the next tenet…
Title means nothing if your actual job function entails spending time on something that is not the right fit for you. Titles can be lofty but the actual job role often does not do justice to the title. I have come across jobs marketed as portfolio management, but in reality the person doesn't have final say in managing the book, as someone higher up the chain ends up calling shots on each and every position. On the other hand, an investment analyst may have certain trading functions or a risk manager may be responsible for the trading authority, have a role in portfolio analysis or research responsibility in hedge funds.
Understanding the actual role that you will be in is key to deciding if it will be a good fit for you. You may be brilliant, but if you land yourself in the wrong role, your success may be limited. Case in point: I once had a quant on my team who was very good at building models. However, the role also entailed instructing hedge trades and every time he had to do this, he would freeze up. Ultimately we had to carve out a different role for him, but not everyone will be fortunate enough to have their job role redefined. "If you judge a fish by its ability to climb trees, every fish will be deemed a failure". So, knowing exactly what the role entails is a defining factor on how successful you are going to be in that job.
The same title could mean different things in different organizations. Understanding what organization you will be part of is key to understanding your actual job. Quant jobs are everywhere, but typically you are likely to work in:
- Asset Management Firms
- Investment Banks
- Hedge Funds
- Private Equity Funds
- Commercial Banks
A risk manager in a bank has a very different role than a risk manager in a hedge fund. Even within the same organization, different divisions may define the same title with varying job functions. A strategist on the sell side may be working with the sales team and therefore may not need hard core modeling skills, but does need the ability to understand the models and translate them into a comprehensible language for the sales team. Whereas a strategist (also on the Sell side) working with the trading team might be splitting their time building models, analytics and reports for the traders to use. A strategist working on core models might even end up rolling under the Technology division.
Last but not least, the job description itself is key as it often reveals numerous useful details about the role. In the example where my quant froze up when having to send trades, it was indeed mentioned in the job description that having to instruct trades for the hedge book is part of the role. It is possible that the quant thought it shouldn't be too tough to don a trading hat, but the amount of stress a high-pressure situation can have on the brain and cause it to function sub optimally should not be underestimated.
Not everyone can wear multiple hats and work efficiently under various situations. Understand your strengths and which environment can bring out those strengths. Pay close attention to the job description and look for things that may make the job less or more desirable for your unique case.
Ultimately we are all quants. However, quants come in different flavors - some thrive in highly charged environments while others are most efficient in quiet settings. Every organization has a need for quants, so you may find yourself on the most unlikely of teams with the perfect job for you.
Networking is always key in these situations. Try to find someone in the closest circle to the job you are considering, preferably someone working in the same team. If that isn’t possible, try to find someone in the same division or firm. Utilize LinkedIn to connect with them and request an informal “coffee chat” to obtain information about the role that is not listed in the job post. Having this intel will give you a better chance of landing the job, since you will be inclined to speak more intelligently about the role and how it fits you during the interview process.
Summing it up!
Job titles can be misleading and the same job title in different types of firms (or even different divisions within the same firm) can mean very different job functions. Don't just rely on recruiters for information about the role, as their job is to sell the role to you.
Invest time in finding out more about the four key tenets of your next opportunity - TROD the job!