Remember Dirk Bester? He's the banking quant with a PhD in Bayesian algorithmic design who's written a detailed guide to banks' quant interviews, which he's posted it to Github. It turns out Bester isn't just the man to go to when you're looking for advice on banks' interviews: he's also the man to consult when you're interviewing with a quant hedge fund; Bester's interviewed at around seven in the past four years.
While hedge fund and bank interviews have their similarities, Bester says there are a few things you need to know before stepping into a quant interview on the buy-side.
1. Quant hedge funds are more likely to test you before they interview you
As sites like Hackerrank grow in popularity, pre-interview tests are becoming more of a thing at investment banks. However, while banks have only recently begun testing Bester says funds have been doing it for a while and are far more zealous about it.
"When I was interviewing four years ago, some hedge funds made me sit an exam before they'd interview me," says Bester. "One gave me a take-home problem to do with a week to solve it. It involved spatial statistics, and they wanted a detailed write-up of the solution."
Nowadays Bester says hedge funds are more likely to ask applicants to do a pair-programming exercise before they'll even speak to you. "Their questions mostly focus on algorithms from graph theory, but they’ll sometimes also ask you to solve a brainteaser numerically (for instance, to use Monte Carlo sampling to solve the Stick Breaking problem)."
2. Quant hedge funds are much more rigorous when it comes to asking about your CV
Before you step into a quant interview, Bester says you also need to know your CV inside out. "Hedge funds (and banks who interview well) will ask you specific questions about stuff on your CV," says Bester. "If you mention spatial statistics, they will ask you questions about model comparison and Gaussian processes (things you are sure to have encountered in spatial statistics, unless you just used it as CV fluff). If you mention C++, they will ask you about the last time you had to design a class and why."
3. Quant hedge funds will ask you questions that sound like brain teasers but are not
Bester says quant hedge funds like case study questions. These look like brainteasers but are more specific "For instance, if you fit a multivariate time series, they'll ask you deal with the large number of parameters in the covariance matrix?", he says. "- What are the problems that might result? How can they be solved?"
4. Quant hedge funds (like banks) are filled with 'brainteaser savants' - but you'll need to be one step beyond this
Hedge funds and banks love their brainteasers, most of which are well known in the industry. Bester says both banks and funds employ 'brainteaser savants', often at senior levels, and that they can, "do brainteasers about Bayes' law in their sleep." If you want to impress them, you'll need to have mastered the brainteasers too.
Real success comes from more than just rote learning, however. Bester says a lot of people who've mastered brainteasers have no idea how to answer questions like, "What's the difference between a Bayesian and a frequentist?"
Hedge funds are moving away from vanilla brainteasers, he adds. "They are opting instead for questions that allow you to establish the breath and depth of a candidate’s knowledge . This is much harder to do, and it requires an interviewer to really think about what they want to test for, and how they want test it. Interviewing is, after all, also a skill that also has to be developed; its not as simple as picking bunch of questions from the books and expecting a candidate to recite the answer like a parrot. When I was interviewing last year, I got the sense that some teams put more thought into the kind of questions they asked."
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