This article was originally featured on Business Insider, to read the original article, click here.
2020 was a tough year for quant hedge funds. The performance of giants like Bridgewater, Renaissance Technologies, and Two Sigma sagged amid the coronavirus-fueled market mayhem, while fundamental shops made a killing.
But systematic strategies in the $3.9 trillion in assets arena remain incredibly popular and continue to lure fresh capital from investors.
Quant funds are the most likely to accrue new assets in the past half of this year, according to a report from HFM and the Alternative Investment Management Association.
Funds are increasingly deploying strategies predicated on artificial intelligence and machine learning, and they’re beating the broader industry, according to a 2020 report from Preqin.
The market for quant and data-science specialists has perhaps never been hotter. The technologists, researchers, scientists, and traders developing cutting-edge investment strategies and platforms aren’t just coveted by hedge funds, of course.
They’re the lifeblood of high- frequency-trading (HFT) prms and proprietary market makers, as well as investment banks building out their systems for electronic trading and execution. They’re also coveted by Silicon Valley juggernauts, startups, academia, and the government. People working on hard-science Ph.D.s from top universities can expect the most elite institutions to start wooing them years before they defend their dissertations.
It’s a vast industry, with an array of subspecialties, substrategies, and time horizons for making trades Unlike most areas of Wall Street there isn’t necessarily a bright line delineating the “front office” — with revenue coming from black-box algorithms and automated trades commonly happening in fractions of a second. For some, there’s no need for a front office at all.
A cadre of Wall Street recruiters are at the forefront of this lucrative talent battle, and Insider has assembled a list of headhunters who specialize in the peld.
There’s a diversity of approaches when it comes to the headhunters that service these hedge funds, banks, and proprietary trading firms.
Some prms have scale, with dozens of employees focused on a high volume of placements. Other shops have a just a handful of people — or only one practitioner — and chase the less frequent but more lucrative senior appointments. Some help top-tier traders attract seed capital to get more entrepreneurial affairs off the ground.
They earn fees in variety of ways — for example, qat fees, retainers, contingent fees based on a candidate’s total compensation, a percentage of trading profits, or an equity stake in a new venture or build-out. (Read more about the secretive world of Wall Street quant recruiting.)
What you won’t see on this list are any of the white-shoe legacy recruitment firms — the Heidrick & Struggles and Russell Reynolds of the world are not the dominant players in this realm, where urgency and speed are often paramount and much of the work takes place below the C-suite.
Recruiters closely guard their client lists and protect the privacy of their relationships, which are the essence of their work. For that reason, unless a relationship is publicly or widely known, we typically do not name the financial services firms these headhunters work with.
But they’ve handled mandates with many the heaviest hitters in pnance and quant investing: hedge funds like AQR, Balyasny, Brevan Howard, Citadel, D.E. Shaw, ExodusPoint, Millennium, Point72, Schonfeld, Teza, and Two Sigma; prop-trading shops like DRW, Hudson River Trading, Jane Street, Jump Trading, and Tower Research; and investment banks like Goldman Sachs and JPMorgan Chase.
Because of the specialized nature of the work — and the fact that candidates could come from a variety of industries across the world
— the recruiting market is truly global, and no one prm has a grip on it, which creates opportunities for many prms to grab a slice of the pie.
As such, this list is not exhaustive. It features many of the most respected, successful, and relevant players in the peld, according to industry professionals, including veterans with decades of experience and longstanding senior connections, as well as rising stars who are quickly establishing relationships and making a name for themselves.
These are the talent brokers of Wall Street quant recruiting.
Atlantic Group hasn’t traditionally been known for quant recruiting — the 15-year-old firm’s foundation is back-office accounting, pnance, and operations recruiting.
But that’s been changing with the arrival of “the Todds” — Todd Fahey and Todd Hicks, a pair of recruiters in Chicago — and Charlotte Battisti, their counterpart in London. The trio have decades of experience in searches in senior systematic trading.
Fahey is an old-guard quant recruiter whose expertise in the field dates back to the late 1990s, when the electrification of markets and model-driven trading was heating up in earnest. Fahey got into Wall Street recruiting after an honorable discharge from the Marines, where he was a crew chief and qew heavy-lift helicopters for the “Phoenix,” “Warhorse,” and “Wolfpack” squadrons.
Fahey helped build out the quant practice at Options Group, one of the industry’s most active players, in the early 2000s, mentoring the current head of that business, Push Patel (see below), according to multiple people who worked at the prm. He went on to found his own search prm, Exemplar, in 2007, which was acquired by SheAeld Haworth in 2011. He joined Atlantic in 2018 to build its capital- markets platform from scratch, with a special focus on systematic trading and electronic markets.
His first hire was Hicks — another experienced recruiter who worked with Fahey at Exemplar and Sheffield Haworth. He then brought aboard Battisti to oversee Atlantic Group’s capital-markets efforts in Europe. Battisti has been an electronic-markets specialist since 2005 and founded her own boutique in 2012 before selling it in 2017 to Options Group.
For Battisti and “the Todds,” the primary business is in targeted, retained searches. They work across asset classes and investing approaches, typically with hedge funds and proprietary-trading firms but also with banks, asset managers, and sophisticated family offices. They’re usually filling roles requiring a decade or more of experience, including quantitative-portfolio managers, researchers, data scientists, and technology professionals.
“I’m a complete Midwest, no BS guy,” Fahey said. “I’m not here to be everybody’s best friend. I’m here to do what I say I’m going to do.”
The quant-trading space has evolved substantially in Fahey’s career, and “there is no easy money to be made here anymore,” he said.
“You have to have scale, technology, and access to the right data,” he said. “It’s a constant scrounge for talent.”