Joining a well-established quant shop versus a new one if I wanted to start my own company in 7-10 years??

Apr 3 14 Comments

The question says it all. I have two choices between 1) joining a well-established (top tier if you wish - think of it as one of the few firms at Citadel/Two Sigma level.) shop versus 2) joining a relatively new one (tier2 if you will), both in NY. If I wanted to start my company down the road in 10 years, which one would suit me better? I'd imagine that a new company would have a lot of headaches that would better educate me when I wanted to start my own firm down the road but at the same time a top firm offers a lot of learning opportunities.

tc_1 $363k
tc_2 $310k

current tc, $180k
yoe < 1

#citadel #quant #twosigma

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TOP 14 Comments
  • If you're serious about starting your own prop shop, then absolutely go to the smaller place. Citadel is huge and you will likely be pigeonholed into a very very small role as a new hire. It takes years to be able to see the forest for the trees at a place like Citadel. Yes, coming up with a good strategy is important (presumably your job as a quant) but there is *so* much more to it. There's a book called so you want to start a hedge fund that is pretty insightful. It's far more likely you will get a peek at how the sausage is made at a small place struggling to survive than a huge, successful firm that has already figured things out.
    Apr 3 3
    • Yeah, I've never worked at a small place before. But it took me years to get exposure to stuff like margin, cost of capital, borrow fees, buy-ins, settlement, portfolio risk, etc. And yet these are all things without which you cannot run a fund so you either need to know them yourself or hire someone who does.

      In terms of downsides, I really think the biggest one is risk (not just TC or job security but of wasting years at a place that turns into a dead end). Citadel has a lot of opportunity for the right person since we do so much. A small shop could go either way -- you might end up working side by side with a trader and learning the ropes or you might end up stuck in a closet creating spreadsheets. The latter outcome would probably leave you worse off than a job at Citadel so you need to be quick to recognize what is happening and be ready to bail if you don't see the job as advancing you towards your goals. I view the risk/reward spectrum as like tech < citadel < small prop shop. It sounds like you realize the risks involved and are making a conscious decision so best of luck!

      I wouldn't worry too much about the tech -- just be aware of what the limitations are and let that drive your strategy. And working at a place that's still building out their platform is an invaluable experience that is very hard to come by. At the very least, it should set you up to sail through the interviews for your next finance job.
      Apr 4
    • Thanks for sharing your thoughts. I really appreciate you taking the time.
      Apr 4
  • What do you think the mentorship would be like at the tc2 place? How many employees is it? Do you actually think you’d be exposed to how to run the inner workings of the business?
    Apr 3 1
  • Investment Management Firm
    mooned2

    Investment Management Firm

    mooned2
    Benefit of going to Tier 1 is that if you climb the ranks and stay there long enuf, when you go to raise funds and move out on your own it may be easier to raise assets.

    Obviously, non-competes offer a chance to build your own thing until they end. But I’d imagine tier 1 can look better assuming tier 2 doesn’t become tier 1.
    Apr 4 2
    • That makes sense, totally agree. But would that give me any exposure to how to build a company from start?
      Apr 4
    • Investment Management Firm
      mooned2

      Investment Management Firm

      mooned2
      Great question and hard to answer. A lot of tier 1 shops keep teams pretty separated or siloed to keep IP protected and hidden. Really hard to say overall. In the end, I think you’ll learn a lot no matter what. I’d say the biggest thing to learn is how to build teams, iterate quant ideas, move them to production, infrastructure, etc..
      Apr 4
  • I feel that if you wanna eventually start your own shop, you have to be at least at the Senior Portfolio Manager/Head of (some asset class) Trading/Director of Quant Research/etc level for people to take you seriously. I'd go on Linkedin and look up these kinds of people at the two shops you're considering and see how long it took for them to get there. Which should give you a sense of how long you can expect to get there
    Apr 3 1
    • I'm not worried about the time span I need to spend in a company honestly, if more than 10 years is needed before starting my own shop, I'd happily do that wait.

      I'm trying to figure out which path would better prepare me for my ultimate goal.
      Apr 4
  • As swe or as quant? I assume quant but wanted to double check.
    Apr 3 1