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SECTORS EXPLAINED
 
Sector snapshot: Quants
What's happening, who's hiring, and how much are they paying in the world of quantitative analysis?

What's the temperature?

Not hot. Several quant funds performed fairly abysmally when the heat was on in August. For example, Goldman Sachs' quantitatively driven hedge fund, Global Alpha, fell 22% during the month and was down 32% for 2007 at the start of September.

It's not just quant hedge funds that have been suffering at the hands of the mathematicians. Morgan Stanley reported 3Q losses of US$480m on its quantitative equity trading operations. And structured credit desks, which have been one of the more lucrative areas for senior quants over the past few years, look distinctly like they won't be requiring their services (or quite as many of their services) in future.

Who's hiring?

Right now? Hardly anyone. "People are taking stock and seeing where things are going," says Jon Durrant at recruitment firm Selby Jennings. "There are quite a few people stuck at final round interview, and managers are saying they need to delay until Q1 next year."

"It's pretty dead," confirms Rachel Biernacka, head of the quant desk at recruitment firm Huxley Associates. "I'd expected it to be like this at the end of October, but not quite yet."

More interesting is who was hiring before credit markets went into meltdown. Recruiters point to the likes of Wachovia, Lloyds TSB Corporate Markets, Soc Gen, BNP Paribas, JPMorgan and Barclays Capital.

How much are they paying?

According to Napier Scott's last salary survey, a UK-based managing director-level quant working in credit derivatives at a top-tier bank made an average package of just over £1m last year. This year quants are apparently steeling themselves for the same or less. "People aren't sure what to expect any more," says Biernacka. "Most people aren't expecting bonuses to be higher, though."

What future?

It's not all doom and gloom for quants. Some (e.g. those in ABN AMRO's FX team) are even rumoured to have done quite well out of the crisis, while the booming equity and interest rate derivatives markets look set to shore up demand for people to price equity and rates products, at least.

At the same time, quant hedge funds such as DE Shaw and Global Capital, which rode out the August storm, are raising new money. If anything, we think ever-cleverer quants will be required to devise ever-cleverer trading strategies – ITG, a US agency broker, has already developed a new algorithm that seeks to overcome volatility.

Reader Comments
Date: 20 Sep 2007
Name/Email: Ms. Anne O`Nymous ()
Company:
It is a known fact that Estate Agents routinely use deception as a means of advertisement and promotion of their business. They do this by placing "Sold" signs near houses or flats that have nothing whatsoever to do with their business and might have even never been for sale, or could have been sold decades earlier. Reading the quant market review just brought a smile to my face. Some of the jobs advertised on efinancial careers especially in the quantitative analytics section have been on the board for "years" while the existence of quite a lot of jobs placed by the recruitment agencies is dubious. Editor, please do us all a favour and insist that only live jobs are placed on your boards. Vet some of these agencies; as their comments in your article do not correlate to what they are advertising on your site. ps: you are doing a good job

Date: 20 Sep 2007
Name/Email: Jayne ()
Company:
we still have plenty of quant roles. The problem is that every data collection bod and maths grad thinks that they are a quant. there are still roles for experienced quants WITH A PERSONALITY AND PEOPLE SKILLS. As the market tightens, there is less tolerance of analysts with Aspergers and an attitude problem.

Date: 20 Sep 2007
Name/Email: doesn't matter ()
Company:
Jayne, your comments regarding Aspergers disorder are extremely offensive. You need to understand that most people with Aspergers disorder lead 'normal' lives just like the rest of us.

Date: 20 Sep 2007
Name/Email: doesn't matter either ()
Company:
jayne, that just shows why some companies (probably yours) are suffering. 'Candidates with personality' you mean candidates who can sell themselves rather than those with the necessary talent

Date: 20 Sep 2007
Name/Email: WhyWeAllLove HR ()
Company:
Dear Jane, I think I speak for all intelligent people who don't have a chip on their shoulders for never understanding maths. People like you in HR are the reason why real eccentric stars hardly stand a chance of getting through the door. People like you screw things up for the rest of us, who enjoy being with people who are smarter than us, even if they have Aspergers and attitude.

Date: 20 Sep 2007
Name/Email: Rachel - Head of Quants at Huxley ()
Company:
Just to clarify for anyone with concerns.. any job I post, is a live job. If I posed at ad for every single place I was hiring for, I'd still have about 25 live roles.. 25 live roles is pretty dead, given that in April, my 7 man quant and risk team were working over 120 live roles. But send in your cv, and I'll speak to any quant manager you want about it because thats our job. If not for now, you could be considered for Q1..

Date: 21 Sep 2007
Name/Email: Jayne ()
Company:
Some candidates decide to leave their interpersonal skills at home. When an interviewee only answers questions with "yes", "no" or "look on my cv, its really comphrehensive", then we have a problem. This is because in their daily roles, these quants need to explain complex data to people who don't understand raw figures, with a little more than "its there in black and white, can't you read?" As a mathematical science graduate myself, I know how important communication is. When there is a lack of maths skills in the market, then we hire candidates with the maths skills and then have intermediaries liaise with clients and qualitative staff, because we have no choice. Now, we can choose and we choose staff who will be prepared to discuss data with non-quants.

Date: 23 Sep 2007
Name/Email: Anon ()
Company:
Jayne: I agree with "doesn't matter", you were extremely offensive. Get a clue, or keep your mouth shut. The truth is there's always a balancing act, if you hire all people with exceptional interpersonal skills you will be missing out on candidates who are actually better at doing the job they're employed for. I know you "expect both" but in the real world it's always a trade-off. I don't see market conditions having any effect on the particular balance that is required. I think the painful truth is HR people push for excellent people skills (and complain about the lack of them) because it's something: (a) they have (b) they can judge. I'll take a motivated problem solver any day of the week.

Date: 23 Sep 2007
Name/Email: Anonymous ()
Company:
Ms Anne, i agree with you on this issue. One need to study the efinancial web for a period of 12months, guess what-same jobs appear every time. I wonder if the site is under audit.

Date: 24 Sep 2007
Name/Email: Glenn Debreceny, customer relations, eFinancialCareers ()
Company:
Ms. Anne O`Nymous and Anonymous, Sales & Marketing, eFinancialCareers endeavours to monitor all adverts that are advertised on this site. However, given the volume of positions it is impossible for us to verify that every single job is current. If you wish to raise any queries about the nature of any advertisements, please contact us at help@efinancialcareers.com

Date: 24 Sep 2007
Name/Email: Tony, Credit ()
Company:
"The world of quantitative analysis", as put in the article, is a very vague term - the areas that have been doing well in the recent meltdown are still hiring. In the more difficult areas, there is still need for more brainpower because people have understood risk models were wrong and there is a lot of work to do to improve all the system, infrastructure, models etc... I would say you probably need less theoretical people these days, not so mathematicians but better at programming, systems, IT expertise

Date: 25 Sep 2007
Name/Email: ()
Company:
Jane, your comment on Aspergers is based on pure discrimination, not a thoughtful decision. Everyone is unique and has his/her value. According to people like you, folks like Albert Einstein must remain on jobs no more than clerks at some patent offices.

Date: 25 Sep 2007
Name/Email: Sammy ()
Company:
There is greater understanding in the quants area and we mathematians manage quite well. What is actually disturbing is the HR guys. They do not seem to understand maths demand in the area viz a viz the maths grad with with the right maths ability. I attended an interview that clearly demanded stochastic optimisation and modelling skills and that was the area I stressed on but this HR guys did not seem to understand me in the context of the job role. I left them in the middle of the interview cos I already have a good job. There is therefore the need for technical guys in HR reccruitment rather than just raw HR personnel with no maths or technical background.

Date: 26 Sep 2007
Name/Email: Sohail ()
Company:
Sammy has depicted the right "face" of the HR people. 100pc agreed!

Date: 26 Sep 2007
Name/Email: GazDeFrance ()
Company:
spot on Sammy!!

Date: 13 Oct 2007
Name/Email: Dominiv Connor ()
Company:
As quant HH I often work with people smarter than me. My ego can take this, but Jayne retreats into a self serving fantasy where her limited “people” skills are somehow morally superior, being a mediocre arts grad clearly wound up by science grads starting on a higher salary than she will ever attain. Jayne is not serving her firm well by this attitude, and I suspect I know which London Wall bank. They may be having a bad time, but the market simply isn’t collapsing. Yes, some quants do not present themselves well at interview, and this always hurts them, regardless of market conditions. Paul & Dominic’s Guide to Getting a Quant Job points out that the best jobs are always competitive, and losing points through rudeness is stupid. But it’s actually quite rare, and it works both ways. Good HRs we work with see their job as attracting and retaining good people. Can anyone imagine Jayne persuading a good candidate to turn down a competing job offer ? The standard of HR professionalism is an order of magnitude better than when I first started, when it was tacitly accepted that if a director’s was bunged a "real job" in HR. Presumably Jayne dates from that age.

Date: 13 Oct 2007
Name/Email: Anon ()
Company:
Jayne, maybe if you spent more time working on your maths skills and not focusing on making your 'people skills' superior to your mathematical peers YOU would be working as a higher paid quant and not some crass HR monkey with a huge chip on her shoulder.

Date: 16 Oct 2007
Name/Email: Jayne Mathematical Science From Which Poly? ()
Company:
'nuff said ... ;-)

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