The quants taking pay cuts to work at Goldman Sachs are loved by hedge funds
While no two quant strats at Goldman Sachs are the same, they share one thing: an appreciation by hedge funds. Other quantitative roles may have grown in prominence, but strats still offer a unique profile that makes them an exciting proposition for the buy-side.
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Andy Legg, a New York-based director at recruitment firm Riviera Partners and former in-house recruiter at the likes of Citadel and Two Sigma, said strats' strengths lie in their "perfect balance." Not only do they have good STEM fundamentals, they also have great communication skills; "not too introverted, not too extroverted." Hedge funds have taken inspiration from Goldman in a number of ways, including their approach to communication. There isn't a definitively appreciated profile, however, and funds are "willing to trade off" communication skills "if the tech foundation is really strong."
Legg says strats moving to hedge funds typically do so as quant developers, but can sometimes be a long term project for them. Hedge funds are looking for "high potential strats who aren't super intensive," with the intention of building up their buy-side knowledge and "playing to their strengths." Strats also need to be realistic, however; Legg says some strats who are "very good at programming" mistakenly aim for quant researcher or portfolio manager roles due to their pay and perception in the industry. Many who made it at Goldman find "it doesn't always translate to the buy side" and get very frustrated.
The path from strat to hedge fund quant requires a lot of fortitude and, sometimes, a lot of sacrifices. One ex-strat said they took a "significant pay cut" to become a strat at Goldman compared to their previous role. While these cuts happened up to VP level, "analysts were hit the most" during his tenure.
The rewards, seemingly, are worth it. The strat said working at Goldman gets you a "seal of approval" and takes you "from being nobody, to being someone validated."
The same is also true of quant traders, who seem to have a different clientele. One Goldman insider said quant traders get "harassed by high-frequency trading recruiters." They note that quant traders also "make a lot more" than strats.
Legg contests the idea that strats are universally underpaid. He says "some strats are paid really well", and that working at a tier 1 bank like Goldman likely means high pay "regardless of what you do." In New York, mid-level quant strats appear to make a salary of $150k as a bare minimum. Nonetheless, there can be variation. Goldman has four open strat roles in New York, their salary ranges can be seen below.
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