UK
Mention Nicole El Karoui in the presence of a quant, particularly a French-speaking one, and he or she is likely to fall into the kind of reverential silence usually reserved for Carla Bruni.
El Karoui teaches the Masters in Probability and Finance at the Ecole Polytechnique and University Paris-VI. In France, a Masters is known as a DEA. Such is El Karoui’s fame that the course she teaches is commonly known as the DEA El Karoui.
El Karoui’s course is nothing new. She began teaching the maths underpinning derivatives in 1989, and French banks have long made use of her students.
US banks are more recent converts. However, Goldman’s London trading desks are said to have developed a particular taste for El Karoui alumni. “It’s compulsory that DEA El Karoui students do an internship as part of the course,” says one London quant recruiter. “This makes them very appealing compared to British MScs who may not have had any experience of the business.”
Until now, however, recruiters say El Karoui’s pupils have typically become practitioners rather than leaders.
“Traditionally, most of El Karoui’s students have been lieutenants rather than officers,” says Dominic Connor at P&D Quant Recruitment. “She doesn’t turn out big names, she turns out very bright and very competent, technicians and probabilistic mathematicians.”
This could be about to change. Connor says non-French banks only really discovered the joys of El Karoui DEAs within the past decade. As their hires come of age, they are coming to occupy senior positions in the industry, and breaking out of quantdom in the process. One example is Rachid Bouzouba, the El Karoui alumni who was promoted to co-head of global equities at Nomura earlier this week.
In 2006, Bouzouba told the Wall Street Journal that a DEA El Karoui, “is a shortcut because you don’t need to train the person on the basics of derivatives.”
In future, El Karoui’s alumni may gain even greater cachet from a certain scarcity value: having worked in the industry for more than 40 years, the goddess of quants is due to retire soon. A while ago, she told us she was bowing out in three year’s time; that was 2007.
how pointless, does every person who studies from her end up on the quant desk? i suspect no. because the course is well known, maybe all smart quant types go there for the brand (selection bias). Highly suspect its too much to do with one individual
[same with LSE, not every LSE graduate end up at Goldman, as is commonly beleived...]
What’s so peculiar about El Karoui and her teaching?
She may have been among the first (and even this is questionable) to teach probability theory applied to finance, but as of now there are hundreds if not thousands of well qualified scholars doing the very same things. What sets her apart, what makes her stand out?
As for the career outcomes, I think it comes down to the fact that you don’t need to be an accomplished statistician in order to be a successful trader or banker. A trader is to a quant like an F1 pilot is to an engineer: you need a basic grasping of the underlying engine, and that’s it.
In finance, like in other fields, those who make it to the top are not necessarily the most technically skilled. Plus, quants tend to be more interested in the technicalities of detailed analyses, than in the relational and commercial aspects which are important in the success of a business.
I’ve worked with many of the El Karoui DEAs. They’re an increadibly homogenous bunch. Plenty of alumnus in high leadership position at the top houses.
never heard of her..but no doubt one of Mr Sarkozy’s conquests
Well, I am French and what was appealing to me was that Banks in London were doing business, not in France.
Listen, I don’t want to say that guys who did the El Karaoui are not bright, they are. Lots of them have done Ecole Polytechnique before, which is the most renowned school in France. And then what, they have a high competence in mathematics. But do they really understand the basics of what they are doing. I am not sure. One time I met a guy who was just out of this kind of DEA and had to explain him the difference between a futures and the index. Please stop this!
They have a high level of derivatives pricing theory, for sure! But do I really care about Heston Stochastic Volatility model, or Garch Nandi to price Call Spreads. I would prefer my old fashioned Binomial Tree.
These guys are skyrocket scientists and shame is that they could provide value in sectors in which they are good, not finance! These are engineer, and in Finance we make Business, we do not build rockets. It is more important to have a well structured brain rather than a brain full of knowledge.
Mieux vaut une tête bien faite qu’une tête bien pleine Montaigne
I am astonished by the level of quality of the replies in this thread.
The discussion is very interesting.
Well done Efinancialcareers.
Well done Sarah!
Since when is Dominic OConnor an authorative figure?
” Heston Stochastic Volatility model, or Garch Nandi to price Call Spreads. I would prefer my old fashioned Binomial Tree”
you don’t know anything yourself
El Karoui alumni have a good command of probability theory applied to finance, but there are many other programs that offer similar (if not better to be honnest) courses…the real difference comes from the students themselves, many of whom have graduated from top French engineering schools and Ecoles Normales Supérieures…
If the media prefer to remember El Karoui’s name instead of the subtleties of the French educationnal system, let’s not contradict them: long live El Karoui!
Could you please stop this, it is getting ridiculous. No doubt Ecole Polytechnique is a good place and no doubt this is a good postgraduate degree but there is a lot of ignorance on what science is or isn’t and on what scientists do or don’t. Desks have to decide whether they want scientists as quants or trained specialists as quants. Doing a PhD in theoretical physics/maths/engineering/computer science is not even in the same ballpark as a DEA in quant finance in terms of acquired skill set. Scientists might not know what a future is but it is irrelevant, lock them in a room for 1 month with Hull et al and that is all you need to begin with. It is the other skills that have been obtained over the years that matter.
For all those who will miss Nicole El Karaoui, there is Helyette Geman who is now teaching in London (Birbeck), before in Paris at Dauphine University MSc # 203 & ESSEC business school; they are friends and together they impacted very much the derivatives world.
“derivatives world”? I think u know nothing about the research on derivatives..
The DEA Laure Elie Paris VII opened before El Karoui!
The 2 most prestiguous masters in France are the Laure Elie & El Karoui well above any others DEA.
Laure Elie get much more choice of lectures that you cannot find anywhere else like in Stat,EDP,IR,HighFrequency,EDSR,C++ in finance with world class Professors , with students from top schools like ENS,X,Mines,ECP,Ponts,Supelec