I am aware of quantitative teams at various asset management arms of I banks. Does anyone have first hand experience with these groups ? How quantitative are they ? What does the work entail etc ? How would you classify them being different from quant strategy group at an I Bank ?Thanks

Generally speaking, (quant) strategy is for client entertainment (unless it is done exclusively for a trading desk...i am not talking about this case here), whereas quant teams at the asset mgt division work more or less directly with client's money. The point I am trying to make is that in asset management you end up putting real money into the strategies (or models) quants come up with, whereas in strategy groups this is not always the case. This is not intended to make quant) strategy sound worse or anything. Some of the publications are actually very good and very interesting and clients do end up investing according to what they advise. E.g. Lehman "Prop Shop" is very interesting and widely read. Not sure if the Lehman guys actually invest, but it sounds like they do.In terms of "how quantitative"....is that really important? Asset mgt may not be that quantitative but your quant work is being put to use right in front of your eyes. That can be very satisfying.

Gmike,What group in Lehman are you talking about when you say "Prop shop". You mean their proprietary trading group ?

I am not so sure. Prop Shop is the name of one of their periodical newsletters. It contains strategies that are intended for higher discretion portfolios...e.g. relative value trades, lots of derivatives trade ideas, across all asset classes, etc. Many clients cannot actually do these kinds of investments, but some can. I have met the guy a few times and he was always introduced as a "strategist" by his sales gang. Now, strategists dont usually put their money where their mouth is, but in his case I think he must have some sort of stake in his trade recommendations, because unlike a "normal" strategists he thinks (and talks) like a trader and not like an economist.

Gmike hits the nail on the head. The strategy groups are usually only advisory groups in nature - they get to produce trading strategies and market commentrary etc, but rarely put these into practice. From my poin of view this can be rather unsatisfactory. There is a big difference between recommending a strategy in a research note and actually trading it However, they are often internally well regarded, there are some good people out there and it can be quite well paid! At asset management firms you have the upside that your work is actually used in trading/investment. However, depending upon the shop, quant can be viewed as an integral part of the investment process, or at others merely a side show that the company should have. I've noticed quite a few asset management arms trying to build out their quant function recently.

It's also the case that the smarter of the buy side asset managers are wising up that they need to beef up the quant aspect to their work.

I am now taking a class at CMU MSCF taught by a Goldman Asset Management guy. He was a math professor at CMU for 9 years developing interior point algorithms and stuff...an insanely smart guy, and every bit as "quant" as anyone on this board I'm sure. He said (I'm HEAVILY paraphrasing) that there is a focus on derivatives in the quant. finance cirricula, but asset management needs smart people too