eFinancialCareers

Quantitative hedge funds might have taken some big hits over the last few months, but they’re keeping the faith with the computer-driven trading approach. However, hiring has become even more selective.

A survey by the CFA institute, which took in responses from 31 firms with a combined $2,194 trillion in assets, reveals that in spite of the current tough conditions the quant approach is still popular, albeit with a new focus.

Key to the recent failures was a herd mentality, which meant most models relied on similar predicative factors and therefore ended up with similar conclusions on investment opportunities, says the report.

Sergio Focardi, a co-author of the study, says, “Quantitative managers will be looking at new sources of information, such as detailed balance sheet items, and implementing new modelling techniques such as non-linear models.”

Quant developers or analysts seeking new opportunities would find thin pickings in investment banks currently, and although hedge funds are recruiting, they want the crème de la crème to gain a competitive edge.

Brent Harris, responsible for permanent recruitment at Aston Carter, says: "They're being more selective than in previous years, but there are still opportunities at hedge funds. Right now moving to another investment bank is fairly unlikely and hedge funds are still offering attractive financial rewards and competing with each other for the very best individuals."

James Kennedy, quantitative consultant at recruiters Pathway Finance, adds: “It’s tougher now and there are far fewer jobs than there were last year. Hedge funds will take on the right, often elite quant developers, but a lot of them are also working hard to retain the good ones they currently have.”

Quant developers will be expected to combine excellent technical skills in software like C++ and Java with outstanding mathematical nous; a PhD is often a prerequisite.

At the junior end, salaries fall between £45k and £70k, but they can earn as much as £150k base, and bonuses are rumoured to be hefty in hedge funds.