From Academic Finance to Quantitative Research

Disclaimer: This blog post is highly subjective.

Resources

Quant Funds

Quant funds are hedge funds that use quantitative methods to make trading decisions. Like most hedge funds, these firms usually raise institutional capital.

Quantitative trading:

Some of the larger firms, such as Bridgewater and Citadel, do a more than just “quantitative trading”.

Market-making or prop trading:

Online

Reddit:

Forums:

Books

Less formal books:

More formal books that are often recommended:

Coding:

Others:

Podcasts

Introduction

This blog post is created today (2024-09-05) as a help for myself to write down information and advice for the process of switching from an academic career to an industry career. In the end, if this blog post carries some significant value, I will publish it on my website.

Why I Feel the Call to Leave Academia

Academia is a Slow

You Work by Yourself

The Pay is Bad

Things I Like in Academia That I Would Like to Keep

Keeping Up to Date with Research

Academia is built upon seminar series, all university departments have at least one, and it is common to attend and present at other universities seminar series. So although academia is slow, it is common to present ideas, get feedback, and work in an interactive environment.

Meeting “Famous” Researchers

In academia great researchers are generally quite accessible. I’ve met and talked to Nobel laureates and thought leaders in different fields at conferences and seminars.

Different Industry Roles in Finance

Different Types of Quants

In essence, there are two categories of quants: buy-side and sell-side. Buy-side quants, commonly found in hedge funds, focus on developing profitable strategies through mathematics, statistics, and coding. Sell-side quants, typically employed by investment banks, provide quantitative analysis for clients. Financial engineering degrees generally prepare individuals for sell-side positions, which often involve traditional mathematical finance techniques such as stochastic calculus and differential equations.

Buy-side:

Sell-side/LPs:

Production Pipline of a Trading Firm

Quant Trader

What you do:

Other:

Quant Researcher

What you do:

What skills you need to have:

Other:

Quant Developers

What you do:

What skills you need to have:

Deciding which role is right for you

Before starting to prepare for a new job and interview process, you need to decide which is your target role and target company. Once you know this, you can figure out how their interview process works, and how you can best prepare. Understand the requirements for the role as the same title can mean different things for different firms.

You can go to LinkedIn and look at people that work in the roles that you want to work at and see what background they have.

In the end you should create a structured preparation roadmap and allocate time each day or week to this preparation.

Interviewing

Do you need to be a top researcher from an Ivy League?

Competition for top quantitative trading researcher roles is extremely tough, especially in the UK, where many positions are filled through headhunting rather than public interviews. Candidates with deep expertise in areas like market microstructure, high-frequency trading, stochastic calculus, or machine learning are often recruited from elite universities (e.g., Cambridge, Oxford, or Ivy League schools) and are expected to have achievements such as Mathematical Olympiad wins or extensive publications. However, not all roles demand these credentials; many well-paying and prestigious positions are available at smaller funds, which actively seek talented PhDs without such elite backgrounds.

What makes someone a successful quant?

The following is taken from Citadel’s quant research webpage.

Mindset:

Skills:

From the Mergers & Inquisitions blog post:

The Recruiting Process

From the Mergers & Inquisitions blog post:

The following are two quotes from this blog post.

Interview Process for a Quant Research role at Wincent

Interview Process:

Interview Process for a Trading role at Byte Trading

Interview Process

Prepare for Standardized Tests

Prepare for Coding Tests

In this Reddit post, a senior quant stated that “There is less of an emphasis on brainteasers and coding assessments have replaced math tests.”

In the initial stages, coding skills are typically assessed through LeetCode-style online tests. In later stages, candidates may receive a take-home assignment. If you’re aiming for larger firms with structured recruiting processes, practicing Leetcode is unavoidable. However, if you’re targeting places without a formal recruitment pipeline, showcasing projects that demonstrate your ability to efficiently manipulate data (and reproducing these techniques on demand) will generally suffice.

When starting with LeetCode you should have an understanding of general data structures such as arrays, string, binary trees, linked lists, stacks, etc, as well as basic algorithms such as sorting, searching, and recursion. Is is also beneficial to learn Big O notation to calculate the time complexity of algorithms. Willian Fiset has a good youtube channel covering a lot of these topics, including a good playlist about data structures.

Also, when working with LeetCode start solving problems by topic, don’t randomly try problems as there is no point trying to solve complex problems without knowing the basics.

Spend maximum 30 to 60 minutes on a problem, then look at the hints and answer, and go through the solutions thoroughly to understand it.

Prepare for Behavioral Interviews

Networking

The following is a quote from this blog post. Is networking important? - Similar to banking, it is one of the most important parts. This is likely a bit of a hot take, so I’ll elaborate. Quant finance is a very small world, much smaller than the fundamental L/S one where it already seems like everyone knows each other. While the first gig may come from one of those big pipelines that is impersonal and regimented, every good opportunity comes from knowing a guy who knows a guy. You know how everyone says in the HF world that all the best opps come from referrals / never get posted (Tiger Cubs, etc)? It’s the same shit in quant. Similarly, there is a HUGE world of opps for new grads outside of the big bureaucratic firms who’s names you recognize,, and you only learn about those by digging around and emailing.

List of Quant Funds

The following list comes from this Github repo.