Once upon a time, you could get a job at a hedge fund by virtue of your trading prowess. Maybe you still can. However, if you want to join a hedge fund following a systematic trading strategy, coding expertise is essential.
We looked at the CVs of 6,425 professionals working at 16 top hedge funds* globally. Not all were following purely systematic strategies – some were multi-strategy funds. As the chart below shows, one language in particular features on the resumes of employees at top hedge funds: Structured Query Language (SQL).
There’s a reason for this: hedge funds which rely upon coding are all about devising trading strategies after collecting and analyzing huge data sets, and SQL is used within other programmes to modify and query databases. Ranking behind SQL are C++, Java and Python. They weren’t nearly as popular in our sample and C++ was ahead of both Java and Python.
Things might be changing though. Joel Sichel, a systematic trading headhunter at GQR Global Markets in New York, says that there’s been a recent surge in demand for people who can code Python, “due to its transparency and ease of use for later users coming on to a pre-programmed system.” This might be why Man Group’s AHL Coding competition, in which student coders compete for a £5k prize, is again being run entirely in Python. SQL doesn’t even get a look in.
*Caxton, Citadel, Millennium Capital, Och-Ziff Asset Management, Aspect Capital, Man Group, Arrowgrass Capital, Lansdowne Partners, AQR, Two Sigma, Capula, Winton, Odey Asset Management, BlueCrest, Brevan Howard, Tudor Capital, Bridgewater Associates, D.E. Shaw, Fortress Investment Group, Renaissance Technologies.