Should you work for a middle tier prop shop or the technology division of a bulge bracket?

[MNRC]

My goal is to work as a portfolio manager at a top quantitative hedge fund one day (one can dream :]). I have interviews from a well-known prop shop and the technology division of a bulge bracket. If both make offers, which one should I take? I hear technology is considered back office, so probably the prop shop?

I'm a first year masters in computer science.

 

[euroazn]

Probably the prop (which one is it) assuming the tech role isn't strats.

 

[Keith Tan]

u're right, it is back office. but if u're not limited to STEM degree restrictions, being a software engineer has better prospects in the US if you do consider exit opportunities. both routes doesnt necessarily lead to your dreams but I wish you all the best.

 

[MNRC]

Thanks, Keith. Have definitely considered just being a software developer (the most logical route of a MSCS).

Probably the prop (which one is it) assuming the tech role isn't strats.

euroazn, why do you say "assuming the role isn't strats". Isn't strats work also quantitative?

 

[euroazn]

That's my point - if the tech role is strats, it may be worth considering over prop. Otherwise, tech is a dead-end.

 

[MNRC]

Ah ok, makes sense.

 

[C S]

I've seen people saying stuff about technology = back office = dead-end a lot in these forums (or maybe it's just one persistent person). Anyway, technology is a broad term that's had to get even broader over the years. Some "back office" technology jobs are definitely more challenging and will thrust you into the middle of the action more than some front office jobs. I'd investigate more what team you'd be working with.

 

[MNRC]

There is a former head of ETF from Lehman who recently posted a story at wallstreetoasis that you should start in a back office role like technology even if your end goal is, say, portfolio manager of a quantitative hedge fund because it's part of "paying your dues" and that anyone who really wants to be in the front office can distinguish themselves enough to get to the front office. He believes that most people in the back office actually want to be there.

 

[C S]

There is a former head of ETF from Lehman who recently posted a story at wallstreetoasis that you should start in a back office role like technology even if your end goal is, say, portfolio manager of a quantitative hedge fund because it's part of "paying your dues" and that anyone who really wants to be in the front office can distinguish themselves enough to get to the front office. He believes that most people in the back office actually want to be there.

Interesting.

By the way, it sounds like you got first round interviews, so I just want to warn you not to get too excited. There could be easily several more phone interviews, and then an on-site, and then who knows, maybe even another after that. Yeah, even for an internship.

 

[MNRC]

Well, turns out the prop shop isn't famous--actually tiny--I got the name mixed up with a different one.

I think the former Lehman trader means well, but I'm not sure if the industry works the same way now compared to when he started. From what people say on other forums it seems much harder now to avoid getting labelled as an infrastructure, risk, etc. person.

 

[ygmwy]

Well, turns out the prop shop isn't famous--actually tiny--I got the name mixed up with a different one.

I think the former Lehman trader means well, but I'm not sure if the industry works the same way now compared to when he started. From what people say on other forums it seems much harder now to avoid getting labelled as an infrastructure, risk, etc. person.

Don't be too put off because of that. Even if it's tiny, if it's still prop, and has a good internship for you, that might be a good chance for you given your background. You might not get another chance to go into finance, and even if you do, by the time it comes around, you can have 1-2 years of learning at this "tiny" place. Since you have virtually no work experience in finance, and know nothing about trading, I think this could still be a good thing.

Point is: don't get too greedy and hold out for a big bank when you could be improving yourself in the meantime. Don't be obsessed with big names and prestige either. You'll find out if you go to Goldman that not many people are good enough to stay there long, and there is a lot of pressure--particularly from someone who has little to no experience. You realize that even if you get their interview, you have to pass it (it is tough, and you will be compared with more focused 20 somethings), then even if you get the job, you will have to find some way to survive. Given that you don't know much about it, I don't think you fully understand what your dream really is--in terms of lifestyle, the kind of skills you will need, and the glamour that you think you will have.

If I were you, I'd learn something about industrial trading, and then learn some portfolio management. You won't find this in your MSCS classes. Try and take the QF classes at your school. And don't discount the "tiny" prop shop!