Trends in the Financial Engineering Landscape: An Anderson perspective

Alysa.jpgAlysa Turkowitz has over 20 years of experience working at top universities supporting top-ranked graduate programs in the areas of admissions, career services and curricular affairs. While at Columbia, she worked at Columbia Business School, Mailman School of Public Health, and the Graduate School of Arts & Sciences, Statistics Department. Additionally, she provided leadership coaching to Executive and full-time MBAs, served as a Columbia Alumni career coach, and taught as an Adjunct Faculty member at Teachers College, Columbia University. As of 2020, she is the Executive Director for the Master of Financial Engineering program at UCLA Anderson School of Management. Alysa received her BA in Psychology from Vassar College, her MA in Organizational Psychology, and her EdD in Adult Learning & Leadership, with a specialization in Higher Education from Teachers College, Columbia University.

I joined the UCLA Anderson MFE program as Executive Director because I was incredibly impressed by the caliber of the MFE team, the faculty, students and alumni. I often recommend to prospective students that they make sure they ask the right questions as they explore the next steps in a graduate program. Some of these include: How many students are in the program? How much access will I have to professors? alumni? career coaches? What can I expect as part of the student experience? How many career professionals are on the team?

When I was going through my own interview process, I asked similar questions as I wanted to make sure that I was going to oversee a high-quality program, one that has a genuine commitment to the overall robustness of the student experience. I found this within the UCLA Anderson MFE program.

UCLA Anderson’s Master of Financial Engineering is ranked No. 3 among U.S. business master’s degrees by QS World University Rankings. Since it was established in 2009, the program continues to distinguish itself as one of the only MFE/quant finance programs housed in a business school.

It’s been a busy ride so far, and all with incredibly positive outcomes. In the past year, we have focused on ensuring the program is aligned with an ever-changing financial landscape by adding new electives and programming workshops.

Case in point, Anderson alumnus Benjamin Tsai (’01), president and managing partner of Wave Financial, recently joined the MFE faculty to teach crypto finance. “There is actually a lot of development in the quant space for the new crypto asset class that is becoming mainstream over time,” he says. “To put it in more practical terms, hedge funds in this space are sourcing capital at 8% to 10% per annum, which seems high, but it’s acceptable from their perspective because of the lucrative nature of the opportunities. The lack of capital to quickly close the market dislocations creates a lot of arbitrage opportunities that quant strategies should be able to capture with the right approach.”

Sasi Kanth Nagalla (’16), who works as FX risk lead within the product management and strategy group at Stripe, has worked in both traditional finance and “crypto-native” firms. “One of the things I’ve enjoyed the most is the opportunity to build systems and processes from the ground up, as many crypto firms are still evolving into big firms and there is a strong need for building things. I got a chance to develop systematic option strategies and balance sheet hedging for my previous firm, which helped me learn a lot about crypto markets in a short period of time. I want to highlight that the UCLA MFE degree has equipped me with the skills to take up opportunities like this. Without the learnings from the MFE program, it would have been a very uphill task to convince myself to pursue this path.”

Tsai’s company recently hired a head of quant with decades of traditional asset trading experience to lead Wave Financial into crypto assets. “We are staffing up in this area, and I believe most of our competitors are looking at this also.” Adds Nagalla, “For anyone pursuing the MFE degree, keep exploring opportunities within the blockchain/crypto industries.”

Regardless of what post-MFE path alumni take, they all gain a 360-degree perspective on the industry. Recent graduates like Monika Tran (’19) report that their Anderson MFE education was as effective in teaching them the soft skills necessary for business careers as it was in helping to develop their technical skills. By leveraging expertise across Anderson’s diverse MFE alumni community and among our Finance area faculty, we keep our curriculum and programming current with global business and finance trends.

Raj Sharan (’12) is the founder of financial engineering startup Yayati LLC. He says, “Quantitative finance is a young science that has been evolving since 1970s and accelerated in last two decades. It has helped democratize qualitative solutions in finance as quantitative ones, and its application helped create index funds that dramatically reduced the cost of fund fees. The emergence of quantitative finance turned arcane and opaque ways of managing risk within banks into clearer, more transparent management.”

Sharan notes that a “rebellion against very old financial institutions” has led to an explosion of new jobs in payment technology, insurance, wealth management, asset management and more. “The evolution of blockchain is radicalizing the application of quantitative finance,” he says. “No wonder MFE is becoming a more valuable degree and opening the gates for entrepreneurs as well financial engineers.”

The UCLA Anderson MFE program’s increasing demand is a reflection of the marketplace and how our graduates are able to compete within it. What sets us apart in quantitative finance is our graduates’ ability to utilize a skill set in data science, finance and math to solve problems within industries like fintech, venture capital and health care, along with financial services. Anderson’s MFE Class of 2020 secured 100% employment rate within six months of graduation, and our 2021 graduates are already at 95% offers received, with a total compensation average of $129,000. These numbers have never been stronger. Our alumni are represented at well-known financial companies (UBC, Bank of America, Merrill Lynch, Morgan Stanley) and, increasingly, in the new spaces of Google, Amazon, BlockFi, Stripe and more. Our strategic location in Los Angeles means that, in addition to the global financial powerhouses located here, Silicon Beach companies enter our students’ career purview.

Sharan urges MFEs to claim their space in these new roles that require their specialized education. He likes to quote Tony Robbins: “Expect change. Analyze the landscape. Take the opportunities. Stop being the chess piece; become the player. It’s your move.”