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World's wittiest quant advises how to get a hedge fund job

If you're looking for a quant job in a hedge fund, then America's most wryly humorous quant, Giuseppe Paleologo, is a very good person to go to.

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Paleologo is currently on gardening leave after leaving high frequency trading firm Hudson River, where he was head of risk. He's also worked for Citadel (twice) and for Millennium once. When his gardening leave ends, he will be head of quant research at Balyasny. While he's resting out of the market, Paleologo is lecturing at New York University. This has inspired him to produce a document for his students who want to be quants on the buy-side. 

If you're applying for a quant job at the top non-bank places to work*, Paleologo says you should make yourself aware that they are few and far between. He estimates that there are maybe 7,000 existing buy-side quants globally, and maybe 700 new quant jobs each year. "That includes everyone, from alpha research, to portfolio construction, to data analysis, to execution, to risk management," he observes. 

Given the number of students and experienced individuals chasing them, getting these jobs is not easy. This applies even if your resume is better than the more obscure documents Paleologo has seen ("If you're a piano player in a brothel, know that your chances are unfairly slim."). He puts the acceptance rate at 0.2%.  Success requires a strategy. You'll need applied probablistic modelling and statistics. You might want to read some books**. You could read some academic papers. You could develop what Paleologo describes as the four desirable character traits: Curiosity; creativity; humility; integrity.

You could also apply for the jobs that are less competitive. 

These are the jobs that Paleologo says revolve around data, execution cost measurement, optimization and risk. "You can have a long and great career in any of those," he says, noting that these areas can be "extremely intellectually satisfying." By comparison, he says alpha researchers who develop their own trading signals live and die by those signals' success. "The road to hell is paved with mediocre alpha researchers who did not achieve their goals and burned out by their early 30s."

Alpha researchers are the better paid.  Paleologo says the best can expect at $450-$500k package, including salary and sign-on bonus. Data, risk, execution cost and optimization people earn more like $250k-$500k. And yet, it can be worthwhile taking that option if you play the long game. "Compensation is very important, you are not applying for a job as a future Mother Theresa," says Paleologo. "But when thinking about your compensation, consider its growth rate and the likely duration of your career."

*Balyasny, Citadel, Citadel Securities,  CTC, DEShaw, DRW, Element, ExodusPoint, FlowTraders, Headlands, HudsonRiver Trading, JaneStreet, JumpTrading, Millennium/WorldQuant,  Optiver, PDT, Point72/Cubist, Renaissance Technologies, Susquehanna(SIG), Schonfeld, Squarepoint, Tower, XTX, TwoSigma, Virtu, Voleon, Verition

**"All of Statistics " (both volumes) by L. Wasserman. "Applied Probability Models" by S. Ross. "Convex Optimization" by S. Boyd and L. Vandenberghe. "Numerical Linear Algebra" by Trefethen and Baue. "Linear Algebra and Learning From Data"by G. Strang. "How to Solve It" by G. Polya

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AUTHORSarah Butcher Global Editor
  • Sa
    Sanjay Kyada
    29 February 2024

    Useful information. I would like to have a document created by the professor for understanding quants but the link for the document is not working.

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