Move from Sell Side algo trader to AM (or HF)
I’m in desperate need of advice for a potential upcoming career move in the next few months. I’m currently working at a tier 2 broker (think Stifel, Kepler, Redburn).
I’ve been on the European algo agency desk for the past 3 years (first job - kind of - started in ops and joined the trading desk after a few months). We essentially offer execution capabilities and expertise to institutional clients (HF, AM, sovereign wealth, private banks, etc…).
I have a bachelors in CompSci (top 10 uni top of my class, if that counts for anything). Mid late 20s. Living in the UK, currently on 150k TC.
My role is to guide clients on algo usage, monitor markets and algos for strange/interesting behaviours, TCA/execution consultancy, and optimal execution / mkt microstructure research (i do quite a bit of quant research, but the official job title is algo sales trader).
I may have an opportunity opening up on the buy side at an asset manager. They are not small (14bio AUM) but relatively unknown and small headcount (<40). They are a fundamental value type shops, investing only in equities US and EU, in a restricted number of names (<200 stocks). They don’t trade very often, but when they do they trade many multiples of a day’s volume over weeks/months, and they sit on the positions forever.
I would be joining there as an equity trader (currently they have 2 other traders).
This move would mean I would look at significantly fewer orders then in my current role (few a week vs 000s), have a much less quantitative view on execution and analytics, and significantly less exposure to different kind of buyside firms (which I currently get through my sell side client facing role).
It would however get me buyside experience, and a much needed education on the macro/fundamental side of things (my day to day is modelling orderbook dynamics, TCA, optimising routing and venue access).
My dream job would be at a quant HF, likely as PM or quant trader.
The potential route I see there is starting as execution trader and get close to the alpha from there.
Obviously no one at work knows I am considering this AM move, but quite a few would be shocked. All my managers and senior traders seem to think a potential move should be to a HF (but the reality is I lack the pedigree HF look for - prestigious masters in Maths/MFE/stats, or big bank name). I tried speaking to a few headhunters, but never got word back from any HF/MM/Prop shop.
I’m really at a crossroad. While not my ideal move, going to an AM would allow me to get out of the sellside and exposure to things other than execution. That being said, I understand there’s not much mobility from AM to HF and I may get stuck there. However, I’m not getting younger and as my SS comp grows, it’ll be increasingly difficult for BS firms to match it or for me to take a cut to jump the fence.
Would really appreciate any colour or feedback, whether that kind of job sounds like it could lead to where I am headed, or anything regarding buyside AM trading in general, or whether it sounds like a sensible move. Thanks!
Based on the insights from Wall Street Oasis, here's a strategic breakdown to help you navigate your potential career move from a sell-side algo trader to the buy-side at an asset management firm:
Buy-Side Experience Value: Transitioning to the buy-side, especially to an asset management firm, can indeed provide you with valuable exposure to macro and fundamental analysis, which seems to be a gap in your current skill set. This experience could be beneficial if you aim to diversify your expertise beyond quantitative and execution-focused roles.
Long-Term Career Goals Alignment: You mentioned that your dream job is at a quant hedge fund, likely as a PM or quant trader. While the role at the asset management firm may not directly align with this, it does offer a pathway into the buy-side environment. This could potentially open up future opportunities at hedge funds, especially if you can leverage the fundamental insights gained.
Considerations on Mobility and Career Progression: It's important to note that moving from asset management to a hedge fund, especially into a quant role, might not be straightforward. The skill sets and the nature of trading can be quite different. However, gaining buy-side experience could make you a more rounded candidate and may help bridge some gaps.
Compensation and Lifestyle Changes: You should also consider the implications of potentially lower transaction volumes and a less quantitative role in your day-to-day activities. This could mean a change in the pace and nature of your work, which might or might not align with your preferences. Additionally, consider the financial aspects, such as compensation changes and how they align with your personal and career goals.
Networking and Continuous Learning: Regardless of your decision, continue to expand your network within the hedge fund and broader financial community. Engage in continuous learning, perhaps through formal education or self-study in areas relevant to quant hedge fund roles, such as advanced statistics, machine learning, or financial modeling.
Seeking Further Advice: It might be beneficial to seek mentorship or advice from individuals who have made similar transitions or are currently in roles you aspire to. Their insights could provide practical guidance and help you weigh the pros and cons based on real-world experiences.
In summary, while the move to an asset management firm might not directly lead to a quant hedge fund role, it could serve as a valuable stepping stone by providing buy-side experience and broadening your understanding of the market. Consider all factors, including long-term career aspirations, personal satisfaction, and financial implications, before making your decision.
Sources: AllianceBernstein Reputation and Rotational Program, I was in Equities Research for 10 years in Asia – Ask Me Anything, Leaving the sell side to a Hedge fund, What career path will be the best to take if I want to land a hedge fund job?, Hedge Fund Guru Answering Inbox Questions Here. Thanks Mr. Pink Money
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