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Quant risk is the new black

It’s a great time to have risk – someone else’s. Suddenly everyone’s screaming for quant risk specialists.

The Robert Walters Salary Survey 2008 says salaries have jumped to AU$135k for quant risk specialists with six plus years’ experience, up from AU$120k last year. In fact, anyone working in risk will be at least 10% better off than in 2007.

Is demand up? “Absolutely,” says Dean Unkles at recruiter Hamilton James Bruce.
“Everyone needs them because it looks as if no one has been using them,” says Simon Solomon at Plan for Life researchers.

Who’s hiring? “Insurers,” says Edmund Gill at Hays.

“Banks and corporates,” says Unkles.

“Fund managers,” says Lee Humphrey at Derwent Executive.

“Boutique hedge funds,” says Chris Cook at recruiter Jon Michel.

What do they want? Pure maths, finance, science and engineering degrees, preferably PhDs topped up with one to six years’ experience.

“Arbitrage, currencies, derivative pricing strategies, Monte Carlo simulations and macro-econometric stress testing: the more complex the work experience, the better,” says Laurence Tempany at recruiter Reed Banking and Finance.

“Pure quantitative funds make a science of modelling, trying to eliminate the subjective human bias from investment choices. It takes extreme mathematical and econometric skill to create systems and quant screens. Now it will take equal skill to track and revise those systems,” says Derwent’s Humphrey.

Humphrey says bonuses for quant risk types vary. Away from the front line, they’re likely to be anything from 30-50%. But for those working closely with traders or asset managers 50-100% is the norm.

Robert Walters expects more demand in 2008, more salary rises and more retention strategies to get and keep high-calibre staff.

That sounds like a no-risk guarantee for anyone thinking of becoming a quant.

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