If you're someone with a mathematical bent, for whom 'challenging' maths questions are elementary and differential equations are fun, there is - allegedly - one place where you'll feel especially fulfilled in banking: Goldman Sachs' 'strats' Group. All banks have mathematical wizards, but the warlocks in Goldman's strats team are reportedly higher paid, happier, and more empowered than those elsewhere.
"The strats team here is broader in scope than quant teams at other banks," one strats vice president at Goldman in London tells us, speaking off the record as he is not authorised to talk to the press. "As well as quants, we have quant developers, technologists, structurers and salespeople." Goldman's strats team is at the forefront of the firm's algorithmic and electronic trading business, he adds - making it key to the future of the firm.
Goldman itself describes its strats team as a, 'a world leader in developing quantitative and technological techniques to solve complex business problems.' Members of the team are divided into three groups: 'desk strats' who sit with traders and develop derivative pricing models and trading algorithms, 'sales strats' who support the sales team with quantitative research for client questions, and 'core strats' who work on the firm's technology architecture using Goldman's own proprietary coding language, 'Slang.' As we reported last week, Goldman's already powerful strats group is said to be gaining influence internally now that the new CIO, Marty Chavez (a former strat himself) manages both strats and technology for the firm. The former CIO, Steve Scopellite, merely had technology in his purview.
One London-based recruiter who hires for Goldman's strats group says members of the strats team get paid far more than technologists and quants at other firms. "I've seen top programmers with excellent understanding of specific derivatives receiving offers of £350k," he claims."Goldman strats get ridiculous amounts of money compared to most tech people."
Goldman was unable to comment within the time frame of this article, but doesn't typically discuss pay anyway. What does seem certain, however, is that positions in Goldman's strats team - however sought after - aren't always easy to fill. Strats jobs are often advertised for months on the firm's own website. For example, Goldman has been advertising for an associate-level member of its IBD strats team since January 2014 and for a member of its fixed income and commodities strats team since March.
"Goldman is extremely fussy about it hires into the strats group," says the head of the technology practice at one search firm, speaking anonymously as Goldman is a client. This fussiness is combined with a need to keep feeding the beast."Goldman has a rolling requirement for recruiting a lot of people into strats," says another quantitative finance recruiter, speaking equally anonymously. "It's a huge area of their business - about eight times the size of other banks' quant groups," he adds.
Needless to say, members of Goldman's strats team need to be talented mathematicians. According to Goldman's own recruiters, they also need to be have, 'an ability to code and to pick up a new coding language.' "90% of the desk strats in London have a PhD in maths from places like Imperial, the London School of Economics and Cambridge," claims one recruiter. Among Goldman's core strats, a first class degree in computer science from a top university is said to be more common - along with expertise in everything from C++ to C#, Cocoa (Touch), Objective C and Java.
As with all roles at Goldman Sachs, getting a job in the strats team involves multiple interviews. Anecdotally, however, strats roles involve even more interviews than most.
Recruiters say the process starts with a telephone interview. This can last anything from 45 minutes to an hour and a half. If the initial telephone interview goes well, it will be followed by loads of other interviews - some of which may also be conducted via phone. "They might want you to meet anything from 15 to 20 people," says another London quant recruiter, speaking off the record as he works with Goldman. "The reporting lines within the strats team can be blurred, so there are a lot of people who will want to sign the hire off," he adds.
Strats interviews at Goldman Sachs are notorious for including challenging interview questions. "They will go through you CV and test you on everything you claim to know about," says one of the quant recruiters we spoke to. Stochastic calculus, partial differential equations, Monte Carlo Simulations and questions involving sorting algorithms are all common. The initial telephone interview is likely to cover the basics of computer science, along with questions on multithreaded programming and deadlock issues, he adds.
Goldman strats interviews are also famous for their brainteasers. Previous questions, listed here, have reportedly included those below. If you want a strats role at Goldman Sachs, you'll need to leap a lot of hurdles.
-There's a horse race with 25 horses and 5 lanes. What's the minimum number of races you need to find the fastest three horses?
-There are 100 prisoners in a cell and you are the warden and you have one bullet. How can you prevent all of them from escaping?
-You toss a fair coin 400 times. What's the probability that you get at least 220 heads? Round your answer to the nearest per cent.
-We are at a junction. P is the probability that at least one car will pass in the next 20 minutes. What's the probability that no car will pass in the next five minutes?
-10 people of different ages sit around a table. What's the probability that they sit in an age-ascending order?
-A two year bond yields 6%. A one year bond yields 4%. What's the implied rate for a bond that starts one year from now?