As you will know if you visit this site often, not all quant jobs are created equal. Investment Banks, hedge funds and asset managers all use two different types of financial engineer: the quantitative researcher, and...the quantitative developer.
In a hedge fund or a standalone asset manager most components are built in-house. Quant researchers will be focussed on modelling and back testing strategies, on parameter optimisation, production reconciliation relative to models and on the reporting of results.
Quant developers on the other hand have a different suite of responsibilities. They are are charged with the tools that do market data capture and parsing, for productionizing models from quants, for passing those models through order gateways with the exchanges/banks, for monitoring operations and for reconciling positions with counterparties.
Some funds blend the two roles more than others. However, there is usually a clear delineation between the two roles in terms of PNL generation. Quant Devs will usually have to be talented polyglot programmers who can understand the model code produced by the researchers in R, Python or Matlab, and at the same time be able to interact with exchanges and productionize models in C++, Java or C#. they will also, commonly be expected to produce User Interfaces, meaning that either rich client or web based experience is also commonly required.
Personally, I would say that being a Quant Developer at a fund is a relatively risky career choice. You’re responsible for developing and operating a range of trading infrastructure and if something goes wrong, you’re likely to get the blame, even if it wasn’t your fault.
In investment banking technology things are different, in a bad way. People who label themselves ‘quantitative developers’ in a bank usually work for a front office sales and trading desk and have a completely different experience to quantitative developers in hedge funds or asset managers.
As a quant developer in a bank, you are at the complete mercy of the traders, salespeople and quant researchers for the line of business you work for. That’s a lot of people who are interested in you, and therefore you'll be expected to do a lot of support, firefighting and high-pressure time-dependent work. You’ll be working on tactical trading tools and hacks to existing systems, and trying to move towards strategic systems at the same time. For example, you might be asked to develop a pricing engine for a new order management system from core technology based on models from quantitative research. Believe me, it's nowhere near as glamorous as it sounds, but some people are good at this type of work.
Whether they work in funds or in banks, quantitative developers are not paid like traditional quants. Quants and quantitative traders are classed as revenue generating and are paid as such. As a quantitative developer, you’re very likely to be in the technology bonus pool. That means maxing out at 20-30% of base salary if you’re lucky and your manager likes you. The only way you'll get more is if you work for the ’Strats’ group at somewhere like Goldman Sachs, where you might get more money - although even they have ‘desk strats’ and those who just code all day.
Personally, I have colleagues who sit in the same front office technology team as me and who label themselves as ‘Quant Dev’ on their LinkedIn profiles like it’s a badge of honour. I think they're misguided. All that 'quant dev' says is that you haven’t got the maths to be a traditional Quantitative Researcher. Always opt to go with the most senior sounding title you can get away with, not something which emphasises the skills you don’t have.
David Gaume is a pseudonym
Have a confidential story, tip, or comment you’d like to share? Contact: firstname.lastname@example.org in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)