Insights on Quant | Kerry Consulting

    Insights on Quant

    All you need to know about Quant roles: from Buy side to Sell side

    Arya Zhao

    Quant recruitment has seen an uptake in demand across Hedge Funds, Real Money Funds, High Frequency Trading Firms and even Cryptocurrency firms, and continues being active in Banks. The pool of Quant talents is relatively small in Asia, compared to US and Europe and hence search in this area are often global.

    Compared to Banks that have more common types of quant positions, buy-side firms’ hiring is less straightforward especially for Hedge Funds. Different funds have different focuses in terms of asset classes (equity, fixed income, FX, crypto etc.), markets (US, China, Europe, Asia, etc.), and trading strategies (long/short, statistical arbitrage etc.); and they are more flexible in terms of changing/expanding strategies/asset classes, which can lead to the change of talent requirements.

    Furthermore, new technologies and economic theories have been changing the types of quant roles. For example, nowadays Quant candidates with skills and experience of applying machine learning tools to their strategies, are highly sought after.

    Below are the main quantitative positions in the market:

    Sell side

    1. Quant Trading

    Job summary: Develop algorithm/systematic/electronic trading strategies for clients.

    Job requirements: The requirements usually include a strong combination of maths, stats, programming, and personality etc. Besides the technical skillset, candidates would need to consider whether they are suited to work in a high stress environment (sitting on trading floor with other traders, potentially taking risk in P&L).


    2. Quant Analyst (QA)

    Job summary: Develop and maintain derivative pricing models for trading teams.

    Job requirements: QA used to be one of the most quantitative positions and many of the pricing quants have PhD background in Math, Physics or Engineering. After 2008, with more and more strict regulations, banks are not able to cover a lot of exotic products and complicated pricing models. Also a lot of investment banks already have finished building up their pricing library and infra, so the job scope for a lot of QA positions are less quantitative as before. Candidates with Masters academic background can apply too!


    3. Desk Quant

    Job summary: Communicate between Traders and Quant Analytics team.

    Job requirements: Desk Quant positions don’t necessarily exist in every investment bank, because in some banks, QA also covers this function. Usually it is less quantitative but requires much stronger communication skills.


    4. Pricing Model Validation

    Job summary: Develop benchmark models to validate the pricing models developed by QA team based on the regulations.

    Job requirements: This role requires strong understanding of pricing models and local regulations to validate the models. In some banks, it is also required to develop benchmark models to ensure the accuracy of validation. Besides, stakeholder management skills are also essential to manage regulator and internally with the QA team (sometimes challenge or convince them to accept the changes).


    5. Market Risk Quant

    Job summary: Includes market risk model development function and market risk model validation function.

    Job requirements: Similar to the difference of QA and Pricing Model Validation, they mainly develop or validate market risk/VaR (value at risk) models, based on the regulations. This is a growing space because of stricter regulations on banks.


    Buy side

    1. Quant Researcher

    Job summary: The main job scope is to research, develop and implement quantitative strategies/alpha/signal with the application of a variety of math/stats tools.

    Job requirements: This is the space that has been growing very fast, a lot of banking quant candidates have been trying to make the transfer to buy-side in this space. One reason is because of the change of job scope in banks: It involves more regulatory related work, and more maintenance work because of the already established trading platform & pricing library. Unless the candidates work in the prop trading desk in banks, it is harder to make the transfer to buy-side. Because the job scope and mindset required are very different, they can’t leverage much of their experience in banking to transit to buy-side and a lot of times they compete with fresh graduates whom buy-side firms might think are easier to train. Besides, the salary structure of banking quants and buyside quants is quite different. Banking quants usually have higher base but lower bonus, so when they want to transfer to buyside, they need to manage their expectation of potentially having lower base salary. Although buyside generally has higher bonus, it is after all still discretionary and dependent on the company and individual performance, which are highly related to the market performance.


    2. Quant Trader

    Job summary: There is a lot of overlap of job scope between Quant Researcher and Quant Trader.

    Job requirements: One general difference is that Quant Trader designs trading strategies and trades, while Quant Researchers focuses more on research for strategies/signals with the process of a variety of large datasets, then they provide to Quant Trader or PM who would decide if they are going to use or not. There are some exceptions to the above. We also see employers hire Quant Researchers who have their own trading books and implement their own strategies. There are also some Quant Traders who mainly cover execution of trading strategies, instead of taking the risk themselves. Therefore, the job scope of roles with identical titles can differ in different firms.


    3. Quant Portfolio Manager

    Job summary: Most Quant PMs progress from Quant Researchers who used to support PM to develop strategies or contribute strategies/alphas to a team book.

    Job requirements: Quant PMs manage their own books (AUM) independently and are responsible for the P&L. Depending on the company structure, the remuneration structure differs from discretionary bonus or a clear P&L cut, and they can potentially hire quant analysts/researchers for support.

    4. Quant Analytics

    Job summary: Similar to sell side quant analytics, although such roles are much less common given most hedge funds outsource the pricing work.

    Job requirements: Because the products that hedge funds covers are usually less exotic and there is less data compared with investment banks, the job scope of pricing quant in buyside could be less quantitative but much broader, e.g. need to be familiar with Portfolio Manager’s strategies and work closely with them, help with portfolio analysis, portfolio construction etc., sometimes also need to cover developer type of work. Nowadays, as buyside industry in Singapore is growing, there is more demand for such talent, and most of time they hire from banks.


    Cryptocurrency Firms

    This is a new and hot space in the past few years. The skillset of quant roles are similar to those within traditional financial institutions, only covering different asset classes: Crypto products. There are cryptocurrency firms doing market making, and others doing prop trading. Product knowledge or experience is usually not a must when they hire, although there has been strong emphasis on machine learning and coding experience.

    Most of the quant talents in crypto space are from traditional financial institutions like banks, hedge funds, high frequency trading firms etc. There are more and more traditional financial institutions setting up crypto trading desks.

    As it is a relatively new space, there are a lot of differences between this space and above quant roles within banks/hedge funds. For example, the hiring style of crypto firms is more similar to other fintech companies, where the interview and decision making process is usually faster, could be 2-3 rounds (compared with many hedge funds that have an average of 5-7 rounds).


    Get in touch

    Very keen to hear your views on the Quant market and whether you are hiring or looking for a job yourself, I am keen to connect with you. Please reach me for a confidential chat at az@kerryconsulting.com.

    Arya Zhao

    Arya is with our Financial Services Practice where she focuses on front office searches on the Buy Side, Quant Trading, Research and Risk Management. In addition to Singapore, she recruits widely in Hong Kong, Mainland China and South East Asia. Prior to joining Kerry Consulting, Arya supported a similar portfolio for another international recruitment firm for 3 years.  She graduated with a Master in Business Management from Nanjing University (China) and holds a Bachelor of Human Resource Management. During her Master program, she has also interned in international strategy consulting firms, when she was in China.

    Email: az@kerryconsulting.com

    Current Active Opportunities

    Hedge Funds/Prop Trading Firms

    1. Macro Portfolio Managers – Quant Funds, Prop Trading Firms

    2. Macro Portfolio Managers – Quant Funds

    3. Macro Researchers (cross asset, commodities, or FX)

    4. Quant Researchers – Quant Funds

    5. Quant Trader – HFT

    6. Risk Manager (5-10 years)

    7. Pricing Quant (5-10 years)


    Cryptocurrency Trading Firms

    1. Trader/Quant Trader

    2. Pricing Quant

    3. Investment Analyst (M&A)


    Global Banks

    1. Front Office Quant Analyst

    2. Credit Strats (Quant)

    3. CVA Quant Trader

    4. Pricing Model Validation, Associate-VP

    5. Market Risk Quant