Quantitative finance internships for rising seniors?

[username23]

Unlike many of the CS majors, Physics undergraduates have a hard time getting internships at startups, and some of the bigger companies have us do works that's simply boring or unrelated (ie database management, front-end web programming, etc).

I know there are a couple quants that hang out on these forums. Any recommendations on landing an investment banking/quantitative finance internship?

me: 3rd year physics undergraduate. sample courses include fluid mechanics, computational fluid mechanics, algorithms, numerical analysis of higher order differential equations, Fourier analysis and partial differential equations, statistical mechanics along with the set of standard physics and math courses.

skills include: C/C++, R, Matlab, Verilog. Experience with FPGA, microcontroller programming, high speed DAQ systems.

I am also planning on being very familiar with the Hull book before the summer, and have practiced implementations of the Black-Scholes equation.


Please help me in reaching the right people for such internships. Do not hesitate to PM me or contact me off-board.

 

[lasymphonie]

I'm also going through this at the moment (current junior).

Unless you go to a top school, you probably won't get an investment banking internship. So unless you go to Harvard, Yale, Princeton or maybe Stanford (from what I've heard from some MIT students, IBD doesn't really recruit much at MIT), given the fact that you don't have background in finance, you probably won't get the IBD role at a very top bank. Who knows though - you've just t apply and see where you end up! S&T might be different. Also investment banking is super different from quantitative finance so you might want to do some research and have a look at exactly what division you'd prefer.

Some advice I've received from alums is that the most important thing is that your interviewers like you. So make sure that you can impress with your interpersonal skills! Going to recruiting events/coffee chats is a good way to meet people and to practice your "story".

 

[meanrev]

C/C++, R, Matlab, Verilog. Experience with FPGA, microcontroller programming, high speed DAQ systems. --> These are mostly irrelevant except for a back office job, not the IBD/front office job that I think you're looking for. There are a *few* front office, quantitative analyst internships that let you play around with basic fixed income/swaps trading models that may put to use your MATLAB skills, but that's already not very common. That said, it's not that I'd give up the search.

1. Most firms have 'campus recruiting programs' and that is your best opportunity to get a little edge in getting an offer.

2. Also, try your luck with programs outside of NY/Chicago/London if location is not a restriction. Singapore is one possibility.

3. It's true that your chances are significantly lower if your school is not one of those targeted, but not the end of it. You're not joining finance for the sake of money or success - if you are, then you should probably stop - if you aren't, then you can apply to a less reputed private equity firm, University Venture Fund, Houlihan Lokey, Loomis and Sayles, and start your career there. There are >10^2 prop trading firms, in upwards of 10^4 hedge funds; you even don't have to be within the top 50th percentile and there should be more jobs than physics internships.

4. Buy-side firms are more meritocratic, and we don't really care what's your major. Chances are, the people that you meet at the info sessions that represent these firms will have a scientific or engineering background. I'm personally biased towards physics majors and would love to hire one, but I've yet to see one who is genuinely interested in finance come to me.

 

[meanrev]

I'm also going through this at the moment (current junior).

Unless you go to a top school, you probably won't get an investment banking internship. So unless you go to Harvard, Yale, Princeton or maybe Stanford (from what I've heard from some MIT students, IBD doesn't really recruit much at MIT), given the fact that you don't have background in finance, you probably won't get the IBD role at a very top bank. Who knows though - you've just t apply and see where you end up! S&T might be different. Also investment banking is super different from quantitative finance so you might want to do some research and have a look at exactly what division you'd prefer.

Some advice I've received from alums is that the most important thing is that your interviewers like you. So make sure that you can impress with your interpersonal skills! Going to recruiting events/coffee chats is a good way to meet people and to practice your "story".

I know a very good number of IBD hires from MIT, in GS, MS, JPM, CS, Barclays especially. DB last year was dominated by Harvard interns. The internship program at a firm like IMC will probably be 50/50 Harvard and MIT. They'll visit Yale and Princeton but hardly hire.

If you're from a school with rankings comparable to those in the Chicago area, I'd try PEAK6 at the very least. SIG is fairly competitive but it's a large firm and you have a good chance.

The financial ecosystem is huge. Bloomberg, Reuters, Timber Hill, Interactive Brokers, CME Group are all interesting places to be in.

 

[synkk]

I know a very good number of IBD hires from MIT, in GS, MS, JPM, CS, Barclays especially. DB last year was dominated by Harvard interns. The internship program at a firm like IMC will probably be 50/50 Harvard and MIT. They'll visit Yale and Princeton but hardly hire.

If you're from a school with rankings comparable to those in the Chicago area, I'd try PEAK6 at the very least. SIG is fairly competitive but it's a large firm and you have a good chance.

The financial ecosystem is huge. Bloomberg, Reuters, Timber Hill, Interactive Brokers, CME Group are all interesting places to be in.

did you go to one of the top school out of interest?

 

[meanrev]

did you go to one of the top school out of interest?

Yes, but more relevantly, I hire exclusively from these schools.

@username23: I was sorting out my contacts today and I suddenly realize that I know a good place for you to drop off your resume to reach out to several firms, or at least get a referral to someone else, and your skills sound like a fantastic fit. A good number of buy-side firms reach out to this firm for employees with undergraduate physics backgrounds. Check your inbox.

 

[lasymphonie]

Ah, I was under the impression that IBD hiring was a lot less at MIT than at other places because my boyfriend goes there and was shut down by the JPM people when he said he was interested in IBD...

 

[synkk]

Yes, but more relevantly, I hire exclusively from these schools.

@username23: I was sorting out my contacts today and I suddenly realize that I know a good place for you to drop off your resume to reach out to several firms, or at least get a referral to someone else, and your skills sound like a fantastic fit. A good number of buy-side firms reach out to this firm for employees with undergraduate physics backgrounds. Check your inbox.

Why those schools specifically? I mean, would you not hire someone from NYU or Berkeley just because he/she went there?

 

[lasymphonie]

Sorry to jump in (meanrev can answer this much much better), but some things I've heard about the recruiting process and why some schools are targeted - at certain schools, the hit rate is pretty high (a large proportion of those who apply/who are interviewed are offered positions). A lot of the larger banks do a lot of recruiting at my school in order to find more candidates and it's cost effective to do so. At other schools, the hit rate might be a bit lower so it's not cost effective to have a lot of on campus activities to target students.

Another thing is alumni: at the meetings I've been to so far, the speakers have always spoken about the school's network at the firm. I feel like that's mostly marketing, but there's probably an element of truth in that some alums feel passionately about their alma mater and want to hire. Anyway, NYU and Berkeley are both amazing schools! Something I've found helpful is to reach out to alumni to ask for advice and to learn about their experiences, so at either of those schools you should have a large alumni base where you could find people who are willing to help.

The recruitment events I've mostly been to have been IBD/S&T/GCM at large banks, so top quantitative places probably do it differently (and are looking for different skill sets and backgrounds).

 

[meanrev]

Ah, I was under the impression that IBD hiring was a lot less at MIT than at other places because my boyfriend goes there and was shut down by the JPM people when he said he was interested in IBD...

P.S.: This is a long shot but I'm going to guess that you are in MA too... Wellesley?

Why those schools specifically? I mean, would you not hire someone from NYU or Berkeley just because he/she went there?

I'm sure other firms have their reasons, but I'll supply you with mine, as they are more circumstantial.

A few basic premises must be laid first: (1) the kind of firm that we run cannot get too large before cannibalizing ourselves, and (2) historically, graduates from these schools are more likely to end up in the top sell-side or buy-side firms, and eventually with the financial resources and experience to start such a firm. And therefore there is an extremely high concentration of 'top school' credentials at these firms. Just look up the educational backgrounds of the people who run the largest 30 hedge funds and you will see UChicago, HBS and Wharton heavily-represented.

With these two facts in line, it's easy to assess the reasons.

Firstly, a large number of firms are run by traders who used to be in the pits (e.g. DRW Trading Group, Sun Trading, Chopper Trading, SIG). Their founders came from colleges such as Birmingham College. I feel that these guys have an unnatural bias towards hiring people from the top schools, as that is a heuristic for measuring talent. No one likes it but such as is life.

Almost all of the remaining firms are run by people who used to go to your top 10 schools. My firm happens to fall into this category. We are small - if we were a tech firm or mobile app startup with our present capitalization, we'd probably have 50-100 employees by now. Even the most successful firms of our kind barely reach that: FDO Partners has 15. Five Rings Capital has like 25. Hudson River Trading roughly 100. If you're small, it is very important that everyone fits into your culture. And the easiest way to do this is to hire from your alma mater.

Examples: FDO Partners have their office located in the middle of Harvard's campus, and they are largely a Harvard think-tank. Five Rings Capital's founders came from MIT and it's no coincidence that the school is highly-represented in their externship programs. HRT's founders and first employees came from Harvard and MIT, and a few of them lived on the same dorm floor - odds are against you even if you come from Stanford.

Sorry to jump in (meanrev can answer this much much better), but some things I've heard about the recruiting process and why some schools are targeted - at certain schools, the hit rate is pretty high (a large proportion of those who apply/who are interviewed are offered positions). A lot of the larger banks do a lot of recruiting at my school in order to find more candidates and it's cost effective to do so. At other schools, the hit rate might be a bit lower so it's not cost effective to have a lot of on campus activities to target students.

Another thing is alumni: at the meetings I've been to so far, the speakers have always spoken about the school's network at the firm. I feel like that's mostly marketing, but there's probably an element of truth in that some alums feel passionately about their alma mater and want to hire. Anyway, NYU and Berkeley are both amazing schools! Something I've found helpful is to reach out to alumni to ask for advice and to learn about their experiences, so at either of those schools you should have a large alumni base where you could find people who are willing to help.

The recruitment events I've mostly been to have been IBD/S&T/GCM at large banks, so top quantitative places probably do it differently (and are looking for different skill sets and backgrounds).

I'd echo your view that your alumni are a fantastic resource. I'd also look out for alumni reunion events and see if you can join for the networking opportunity at the reception and after-party.

 

[Mysk1n]

Hello everyone, this thread seems a perfect place for me to ask a few questions.
I'm a fresher at the University of Oxford studying physics. Being very passionate about my subject doesn't prevent me from having a strong interest in finance (and economics, too) so, my questions are: should I apply for spring internships in IB in my first year, or is it a better idea to wait till the next one? Are hedge funds out of an undergraduate's reach, and, more importantly, given my degree, should I am for a quant position (which probably involves a PhD), or can I aim to more "general" hedge funds? Would you suggest me any books that would further my understanding of the finance world?
I hope my question is not too confused, thanks to anyone who will answer it.

 

[meanrev]

Hello everyone, this thread seems a perfect place for me to ask a few questions.
I'm a fresher at the University of Oxford studying physics. Being very passionate about my subject doesn't prevent me from having a strong interest in finance (and economics, too) so, my questions are: should I apply for spring internships in IB in my first year, or is it a better idea to wait till the next one? Are hedge funds out of an undergraduate's reach, and, more importantly, given my degree, should I am for a quant position (which probably involves a PhD), or can I aim to more "general" hedge funds? Would you suggest me any books that would further my understanding of the finance world?
I hope my question is not too confused, thanks to anyone who will answer it.

I have to confess that I'm not too familiar with the job climate in the UK. I'd argue that there's fewer interesting venues to work at in the UK for quant buy-side. Since you're at Oxford, I'd at least try to find out more about Man AHL. Other interesting locations: GSA Capital, Winton, QuantX. SIG has a large group in Dublin, if that counts for you. SIG takes undergraduate interns.

Speaking of Winton, they sold a bunch of their technologies to S&P Capital IQ as QuantHouse. QuantHouse is a software development firm with about 120-140 clients (which is a lot); they have a very interesting suite of software and are based in London if I remember correctly. There are a few other firms like them based in the UK, e.g. Fidessa. I think the software companies in the UK are more interesting than the hedge funds in the UK. These firms are more buy-side-oriented than your typical Bloomberg etc.

Good luck and keep us posted.