Negative sentiment over the war in Ukraine has failed to dampen the ongoing appetite for quantitative talent. But as quantitative jobs overtake roles in operations and technology, are banks becoming more efficient or are they cooking up another storm led by the smartest guys in the room?
The graph below shows the growth in the number of jobs posted on eFinancialCareers in the first quarter of 2022 compared to the first quarter of 2021. Credit, quants and commodities were the winners while trading, technology and FX suffered. As global markets revenues for banks largely declined in the first quarter of 2022, Goldman Sachs recorded a stellar quarter in their commodity arm and it is not surprising that the United States – which has displayed sustained employment growth in March – is the region that generated the most hires this year.
However, the growth of quant roles is not being matched by a hiring frenzy in operations or (perhaps surprisingly) technology, suggesting that quants are being hired to streamline and automate. Some saw dangers there. Rob Mannix, quantitative investing editor at Risk.net, sees this as a worrying developmentespecially in the light of the war in Ukraine. Russian sanctions – and their associated problems of pricing anomalies, trade shutdowns and margin calls – have the “potential to confuse the most elegant ideas”.
However, trend-following quantitative hedge funds are having their best year in nearly two decades, having piled into raw materials ahead of Russia’s invasion. The prestigious New York quantitative trade store Jane Street has wage increase of at least 20% in the midst of a talent war. The finance job market is volatile, so as M&A bankers did in their own talent wars in 2021, now is probably a good time for quants to start polishing their CVs and getting ready. to what can be particularly difficult interview questions.
The good news is that quantitative hiring could stay strong for some time. Quants these days are not just involved in derivatives trading and pricing, many are now ‘strats’ involved in automating functions that previously involved human beings. The last time there was a major crisis in Asia, Long-Term Capital Management, a hedge fund that housed some of the smartest quants in the 1990s, was squeezed by margin calls and exposure to the Russia. This time, the quants are involved in more prosaic activities.
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