Are you good enough ?The Quintessential Quant Meet the most wanted man in high finance James H. Simons, the former math professor who founded the $12 billion quantitative shop Renaissance Technologies Corp., pocketed an estimated $1.5 billion last year. That was thanks to the 5% in fees and nearly 44% of profits that Renaissance docks its investors (vs. traditional hedge funds' typical "2 and 20"). Clients don't complain; Renaissance's leading fund has returned 35%, after fees, since 1989. And D.E. Shaw & Corp., the brainchild of ex-Columbia University computer science professor David E. Shaw, with $23 billion in capital, has netted investors 21% a year for 17 years, without a single losing 12-month stretch. AdvertisementLanding a job at either of these shops can be insanely lucrative -- and even more insanely competitive. "Using a self-consciously obnoxious term, we're looking for superstars, the kinds of people who would be extraordinarily good at nearly anything," says Nicholas P. Gianakouros, head of global recruiting for New York-based D.E. Shaw.He is being euphemistic. The handful of quant and programming geniuses who get into the toughest mathematics, physics, and computer science PhD programs on the planet are already best in class. So screening for the 5 or ten very best of that best means establishing a whole new set of prerequisites. "The quant shops are a different animal," says Alison Seanor, vice-president at Glocap Search, a Manhattan hedge-fund recruiter. What is the "it" factor that distinguishes the crème de la crème? All Seanor will say is, "I know it when I see it."One obvious filter is that liberal arts students -- or even bankers and stock jockeys -- need not apply. What you will need is a nosebleed grade-point average in applied mathematics, physics, or computer science at an elite school like the Massachusetts Institute of Technology, California Institute of Technology, or Indian Institutes of Technology. Many of these students are published and have won high math honors such as the Putnam Fellowship. Often, their names are already so well known in the field that the quant funds make the first approach.Another must-have: an 800 math SAT score (even if you sat for that exam in your awkward adolescence). Although the funds diplomatically claim the number is "just another data point," it's pretty well understood to be a critical credential.The quant shops want malleable intellect untainted by Wall Street dogma -- i.e., not "buy, sell, or hold" types. "They're not really looking to make money on corporate events like takeovers," says Emanuel Derman, director of the financial engineering program at Columbia University and head of risk for quant house Prisma Capital Markets. "They're looking to make money on mathematical models." Top funds often advertise in esoteric scientific journals. "You'll not likely find our ads in a dentist's waiting room," says D.E. Shaw's Gianakouros.If yours is one of the lucky 1% to 3% of résumés to survive an exhaustive initial culling, you can look forward to an hour-long phone interview peppered with thought problems and brain teasers. Pass that test and you will then be summoned as many as three times to undergo up to a dozen grueling interviews. "Every interviewer uses a different approach," says Gianakouros, citing programming problems and math proofs. Expect to be asked to build an intricate Excel model on the spot. Whatever the case, advises Derman, "don't say anything unless you're ready to be quizzed on it."The firm will then solicit references for areas in which a candidate may appear weak. Ultimately, it takes a consensus among everyone who has met the candidate to extend a coveted offer. D.E. Shaw says that out of every 500 candidates who got the initial callback, only one makes the final cut. Many agree it's even harder to get into secretive Renaissance, which would not comment for this story.A typical offer, say sources, starts with a base salary of around $250,000, plus a guaranteed annual bonus that could double that. The best can command a cut of a fund's upside -- beaucoup bucks when you consider the multibillion-dollar asset pots. All this, yet, says Seanor, "most of these guys have never even had a real job."Thanks Business Week. com

250k to start with??Just wondering, do quants earn more than IBankers? dont retort saying top quants r better than dumb Ibankers and vice versa, im talking on the avearge (PhD quants vs Ibankers from ivies)

One of my friends (also my client) worked in RTC. She told me the team is absolutely beautiful.

hmm one in 500 candidates make it past 3 days of grueling interviews.Let's say they hire 20 people a year. That means they spend 30,000 work days a year on interviews. Let's say the average employee stays ten years. Then they have 200 employees.Each employee spends 150 days a year doing interviews.These people must be so well paid because their job is so boring.

QuoteOriginally posted by: mjhmm one in 500 candidates make it past 3 days of grueling interviews.Let's say they hire 20 people a year. That means they spend 30,000 work days a year on interviews. Let's say the average employee stays ten years. Then they have 200 employees.Each employee spends 150 days a year doing interviews.These people must be so well paid because their job is so boring.Prof., that means they only hire 2 new quants every year, instead of 20! For other non-quant positions, they might just spend 2 hours to make a decision...

I think this article is mostly hot air. I knew a PhD student at caltech who joined de shaw as a quant. It was a typical associate offer of ~ $100K base and variable bonus. He was definitely smart but not the super-Einstein type you would think from reading the article. Typical good PhD with a few publications, talks and citations. And like most physicists, a Fortran programmer. Never took the SAT.One thing though - the guy was into puzzles as a hobby, so spent quite some time reading puzzler's tribute etc. I guess that is the clincher for brain teaser driven shops like de shaw. I'm glad Simons didn't comment.

mj, the 500 nunmber is hard to believe. But its actually there on the DE Shaw site.

Hiring is extremely selective, with less than one candidate in 500 ultimately invited to join the firm. --------------------------OK. So 500 people send their resumes, out of which may be 50 (or less) are interviewed which is fair and not much different from top banks. May be banks interview a few more 'cause of their HR budget.

I suspect there has been some slight mixing of terms. Yes, less than 1 person per 500 applicants gets a job (as per the website - this isn't ridiculous, as HyperGeometric points out). However the article clearly suggested that 1 person per 500 that get invited in for an interview get the job - that is a much tougher requirement. Though, even taking it as truth, you probably would find that of every person who gets invited in for an interview, less than 20% have more than one interview, so it isn't like they have to give 3 days of interview to every single one of them.

If quants do the interviewing how many they hire a year doesn't affect my analysis, since the fewer you hire the fewer there are to do the interviewing.I agree that what probably happens is that most candidates die after a 30 minute phone interview, and then most of the rest die after a couple of hours on-site. However, my point was and is that such descriptions always blow things way out of proportion. This reminds me of the ridiculos El Karoui article, which would have suggested that they saved time by only interviewing her students.

i suspect this article is an image-sustaining exercise by DE Shaw. i've met quants there - no different from front office quants at any top IB. i think they do earn more though which really helps them in retention. besides, it is an all-geek place so the density of assholes is lower.

Also in the case of DE Shaw, they seem to want people of a certain personality type. After a telephone screening interviewing with them, my head hunter said that they were impressed with my technical skills, but that they were concerned with "fit". I wasn't too surprised since I got the strong sense that there was a personality mismatch between me and the interviewer.

Also about SAT scores, DE Shaw seemed to care a lot, but none of the other places I've interviewed for even asked. Also, 800 isn't a must have. I think that you can get in with a high-700. Undergrad GPA also doesn't seem to be that important (and graduate GPA scores are bogus). Also, none of the numbers people mentioned for a entry full time position came anywhere close to $250,000 base (and my enthusiasm for Wall Street rapidly cooled once I got real numbers).

QuoteOriginally posted by: twofishAlso in the case of DE Shaw, they seem to want people of a certain personality type. After a telephone screening interviewing with them, my head hunter said that they were impressed with my technical skills, but that they were concerned with "fit". I wasn't too surprised since I got the strong sense that there was a personality mismatch between me and the interviewer.I just finished my second round phone interview with D. E. Shaw. I think my performance was very good, and the conversation is pleasant. But from the posts on D. E. Shaw, I now actually don't know whether I will be able to get an on-site interview.

one shouldn't get too hung up on entry level salaries. It's what you'll be earning with two+ years experience that's important.