Does the buy-side have the best strats jobs? Not necessarily
"Strats"are getting everywhere. The etymology of the term goes back Goldman Sachs in the 1990s, but strats have now pervaded much of the sell-side and making their way across the buy-side too. Arch-strat Sam Wisnia joined Eisler Capital in 2018 and the fund has recently been spied picking-off strats from Deutsche Bank and Morgan Stanley in New York City as it builds an American team.
Not all strats bear the label. Vikram Tandon, head of alternative assets recruitment firm Tardis Group in New York City, says a strat on the buy-side is similar to a quant researcher, but to be distinguished from a quant developer. "The big difference between quant developers and quant researchers is that researchers come up with the strategy, model the strategy and implement it," says Tandon. "Developers focus on putting the software together.”
As well as Wisnia, Eisler's strats include people like Angelo Haritsis, another ex-Goldman Strat and former MD on the fixed income team. The assembled group of banking strat refugees are both conducting quant research and building out a suite of analytics tools, and Tandon says other funds are doing much the same: "There's demand across all firms, even systematic macro firms are hiring guys who can come in and provide the portfolio managers with additional insight."
Sell-side strats get bigger budgets and bigger problems
Does this mean that moving from a strats job on the sell-side to a strats job on the buy-side is now a good idea? Not always. One strat who's made the move says that although hedge funds are now realizing the value of investing in analytics to help generate alpha, budgets are bigger and compensation can be higher on the sell-side. "If you're a master of Martingale Transport or Arrow Debreu, front office strats jobs on the sell-side are the better place to be," he says. "The sell-side has a deeper set of interesting topics to solve, and more stable platforms to solve them."
On the sell-side, problems addressed by front office strats can encompass anything from capital and initial margin requirements, to one way collateral annexes and the true cost of convexity. On the buy-side, strats are all about alpha generation. Buy-side insiders say jobs there can still make sense, but only if your focus is turnaround speed, and the occasional ability to make a very visible contribution to P&L.
Buy-side firms' enthusiasm for quant talent is highlighted in the latest survey of 66 buy-side firms by Coalition Greenwich. However, there are signs, too, that their enthusiasm for quants may be waning. - Their number one hiring priority in the next three years is actual fundamental analysts, followed by ESG analysts. Quants come in third.
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