Why Do Quant Roles Sponsor?

[MRoss]

Hi fellow Netters.

Why do quant roles sponsor? I'm a career coach, and I most often work with quant students and professionals. It's really nice because most of my clients are international and targeting quant roles affords them easy access to sponsorship.

However, everyone once in a while I get an IB or Equity Research client, and those roles NEVER sponsor.

I have my own theories...but why do you think this is the case?

 

[MikeLawrence]

Maybe the US just doesn't have enough truly top-tier scientific grads to fill the roles and quant firms realized that sponsoring overseas talent gave them an edge for those recruits. I can tell you right away that IB or Equity Research positions aren't facing a lack of Managing Director's son/daughters or nephews/nieces any time soon: there isn't really a need to bother with overseas recruits, those kinds of positions can be filled by just about any finance grad with good connections.

It's harder to BS with quant roles, if your pre-requisite knowledge isn't up to scratch it becomes really obvious. Even just interacting with people on QN I've come to figure out who knows what they are doing and who seems scared of the math and is trying to figure out the bare minimum needed. It's that kind of difference, I think.

As I've looked at programs across the US (mostly to compare my degree, see how I stack up against competitors, or find ideas for areas to study when I first started this) its become pretty clear that the top Chinese schools and the Indian IIT's, or many other top overseas schools like Ecole Polytechnique, simply go deeper in their STEM programs than the US schools do. Our liberal arts format costs true depth, even at our best IVY schools where those graduates are top-tier.
I'm studying abroad at St. Andrews this fall, and I've talked with their math students and looked at their program. They take 4-5 math/stat courses each semester. I can't catch up to that in the US, even with my souped up honors program I'm required to take 30-45 hours of business courses and other random things. I'll still 'double major in math and stats' but that doesn't even match their standard degree, they simply take more courses and do more problems. Their standard math graduates are probably better than the masters students at my school.

 

[unzial]

Maybe the US just doesn't have enough truly top-tier scientific grads to fill the roles and quant firms realized that sponsoring overseas talent gave them an edge for those recruits. I can tell you right away that IB or Equity Research positions aren't facing a lack of Managing Director's son/daughters or nephews/nieces any time soon: there isn't really a need to bother with overseas recruits, those kinds of positions can be filled by just about any finance grad with good connections.

It's harder to BS with quant roles, if your pre-requisite knowledge isn't up to scratch it becomes really obvious. Even just interacting with people on QN I've come to figure out who knows what they are doing and who seems scared of the math and is trying to figure out the bare minimum needed. It's that kind of difference, I think.

As I've looked at programs across the US (mostly to compare my degree, see how I stack up against competitors, or find ideas for areas to study when I first started this) its become pretty clear that the top Chinese schools and the Indian IIT's, or many other top overseas schools like Ecole Polytechnique, simply go deeper in their STEM programs than the US schools do. Our liberal arts format costs true depth, even at our best IVY schools where those graduates are top-tier.
I'm studying abroad at St. Andrews this fall, and I've talked with their math students and looked at their program. They take 4-5 math/stat courses each semester. I can't catch up to that in the US, even with my souped up honors program I'm required to take 30-45 hours of business courses and other random things. I'll still 'double major in math and stats' but that doesn't even match their standard degree, they simply take more courses and do more problems. Their standard math graduates are probably better than the masters students at my school.

Interesting points! I come from Berlin, Germany and I know two guys that are now going to Harvard and Dartmouth, respectively, for their PhDs (we studied maths at TU Berlin). They actually told me that the main reason why they were admitted is because apparently our courses go really deep and it's harder to get good grades at our schools, which gave them an edge.. at least that's what they told me..

 

[Daniel Duffy]

Europe has 500 years of mathematical genealogy.

Welcome! - The Mathematics Genealogy Project

 

[MikeLawrence]

Europe has 500 years of mathematical genealogy.

Welcome! - The Mathematics Genealogy Project

Great link, thanks.

 

[Paul Lopez]

Maybe the US just doesn't have enough truly top-tier scientific grads to fill the roles and quant firms realized that sponsoring overseas talent gave them an edge for those recruits. I can tell you right away that IB or Equity Research positions aren't facing a lack of Managing Director's son/daughters or nephews/nieces any time soon: there isn't really a need to bother with overseas recruits, those kinds of positions can be filled by just about any finance grad with good connections.

It's harder to BS with quant roles, if your pre-requisite knowledge isn't up to scratch it becomes really obvious. Even just interacting with people on QN I've come to figure out who knows what they are doing and who seems scared of the math and is trying to figure out the bare minimum needed. It's that kind of difference, I think.

As I've looked at programs across the US (mostly to compare my degree, see how I stack up against competitors, or find ideas for areas to study when I first started this) its become pretty clear that the top Chinese schools and the Indian IIT's, or many other top overseas schools like Ecole Polytechnique, simply go deeper in their STEM programs than the US schools do. Our liberal arts format costs true depth, even at our best IVY schools where those graduates are top-tier.
I'm studying abroad at St. Andrews this fall, and I've talked with their math students and looked at their program. They take 4-5 math/stat courses each semester. I can't catch up to that in the US, even with my souped up honors program I'm required to take 30-45 hours of business courses and other random things. I'll still 'double major in math and stats' but that doesn't even match their standard degree, they simply take more courses and do more problems. Their standard math graduates are probably better than the masters students at my school.

very well said. Coming from Germany and Brazil's system of education, the math is far deeper. Solid Undergrad kids there are probably at an MS in math level in US terms. I imagine China, India, France, Russia, Israel, Scandinavian countries are all similar.

 

[Daniel Duffy]

And Italy.

 

[jarryds]

Maybe the US just doesn't have enough truly top-tier scientific grads to fill the roles and quant firms realized that sponsoring overseas talent gave them an edge for those recruits. I can tell you right away that IB or Equity Research positions aren't facing a lack of Managing Director's son/daughters or nephews/nieces any time soon: there isn't really a need to bother with overseas recruits, those kinds of positions can be filled by just about any finance grad with good connections.

It's harder to BS with quant roles, if your pre-requisite knowledge isn't up to scratch it becomes really obvious. Even just interacting with people on QN I've come to figure out who knows what they are doing and who seems scared of the math and is trying to figure out the bare minimum needed. It's that kind of difference, I think.

As I've looked at programs across the US (mostly to compare my degree, see how I stack up against competitors, or find ideas for areas to study when I first started this) its become pretty clear that the top Chinese schools and the Indian IIT's, or many other top overseas schools like Ecole Polytechnique, simply go deeper in their STEM programs than the US schools do. Our liberal arts format costs true depth, even at our best IVY schools where those graduates are top-tier.
I'm studying abroad at St. Andrews this fall, and I've talked with their math students and looked at their program. They take 4-5 math/stat courses each semester. I can't catch up to that in the US, even with my souped up honors program I'm required to take 30-45 hours of business courses and other random things. I'll still 'double major in math and stats' but that doesn't even match their standard degree, they simply take more courses and do more problems. Their standard math graduates are probably better than the masters students at my school.

Not to call you out, but I would be a little more hesitant when commenting on banking. I am not saying banking is anywhere close to rocket science, but your characterization doesn't the fit the behavior of that space.

Quant employers demand graduate degrees for many job openings, which gives foreign candidates an opportunity to come state-side to study and wedge their way into American markets with networking/internships. Banking candidates generally come from undergrad and have 3-4 summers of internships to lock in return offers. By no means is this the entire story, but I would bet it plays a significant role.

You probably don't even have to go outside the US to observe this. I don't have numbers, but I would be willing to bet that it would be easier to relocate from South to North, or West to East if you have the extra time/resources of grad school to wedge yourself into the finance market (speaking as someone who did just that).

Is it even fair to say non-quant roles don't sponsor? There are plenty of foreign sell side employees, in fact a vast majority of who I work with on a day to day are. Are they somehow subjected to different work visa regulations?

 

[MikeLawrence]

Not to call you out, but I would be a little more hesitant when commenting on banking. I am not saying banking is anywhere close to rocket science, but your characterization doesn't the fit the behavior of that space.

Quant employers demand graduate degrees for many job openings, which gives foreign candidates an opportunity to come state-side to study and wedge their way into American markets with networking/internships. Banking candidates generally come from undergrad and have 3-4 summers of internships to lock in return offers. By no means is this the entire story, but I would bet it plays a significant role.

I don't mean to imply that the MD's kids aren't qualified for the roles they would/will receive, just that those qualifications are a far cry from the qualifications needed for the quant space and isn't hard to do in comparison. The men and women I know who go into the top consulting/IB/PE jobs are usually some of the the smartest and best in their class and they worked very hard for it. However, you can come from almost any college in the world with some business degree and be up to scratch with most of your job in a year. You might lack some fancy excel stuff, but there is a reason that quant shops will hire Ph.D's with no finance experience, it isn't hard to pick up (and the Ph.D in math is much harder to teach someone on the job).

The market for men and women who are willing to sit at a desk 100 hours a week for $200k is quite saturated; the difference lies in the work done during the 100 hours, the breath quant work can't be learnt in a year on the job by a random guy who is willing to work long hours. If you show up and you don't know your stuff you are useless, from what I see there is very little busy work to give you while you figure it out. The number of internal staff's children willing (and able) to get to that level in math/stats/coding ect. is much, much smaller.

But, more importantly, the difference in worth between a guy who went to an OK undergrad, sorta learned real analysis and took regression/time series vs. the man/woman who was an IMO gold medalist, has a Ph.D in Probability and Stochastic Calculus, and codes like a second language is enormous.
Meanwhile, the difference between someone who knows excel really really well and has all the accounting ratios memorized and the CEO's descendent who is about 20-40 minutes behind the other guy all day isn't quite as big. It is still an issue, sure, but it is a different kind of issue entirely. At the end of the day, banking is a time suck; but if you get in the door, you're willing to work whatever hours they tell you, and you are somewhat competent, I haven't heard of any reason you'll be out of place. But among all the top-tier men and women I know who went standard banking... I really can't tell the difference in any of their educations- there is no differentiating factor there.

The bankers I know are intelligent, incredibly driven hard workers. They typically earned their spot, I respect the effort, talent, and drive it took to do it. However, it doesn't take anywhere near as much effort to become qualified for IB work. When it comes down to hiring a relative of the man/woman who will give you your bonus (or not) vs. an overseas kid who needs sponsorship, there just isn't much of anything that overseas kid can offer that the saturated job market here in the US doesn't have in droves. But in the quant space, for the reasons listed above, overseas applicants can stand out because they are often more competent than the US kids - and when it happens it is very noticeable.

You probably don't even have to go outside the US to observe this. I don't have numbers, but I would be willing to bet that it would be easier to relocate from South to North, or West to East if you have the extra time/resources of grad school to wedge yourself into the finance market (speaking as someone who did just that).

I don't disagree, but that isn't the point.

Is it even fair to say non-quant roles don't sponsor? There are plenty of foreign sell side employees, in fact a vast majority of who I work with on a day to day are. Are they somehow subjected to different work visa regulations?

@MRoss is one to answer this part; but he said above that they don't. I'm just speculating as to why they wouldn't need to sponsor, I don't have the experience to tell you whether or not they really do.

 

[jarryds]

I don't mean to imply that the MD's kids aren't qualified for the roles they would/will receive, just that those qualifications are a far cry from the qualifications needed for the quant space and isn't hard to do in comparison. The men and women I know who go into the top consulting/IB/PE jobs are usually some of the the smartest and best in their class and they worked very hard for it. However, you can come from almost any college in the world with some business degree and be up to scratch with most of your job in a year. You might lack some fancy excel stuff, but there is a reason that quant shops will hire Ph.D's with no finance experience, it isn't hard to pick up (and the Ph.D in math is much harder to teach someone on the job).

The market for men and women who are willing to sit at a desk 100 hours a week for $200k is quite saturated; the difference lies in the work done during the 100 hours, the breath quant work can't be learnt in a year on the job by a random guy who is willing to work long hours. If you show up and you don't know your stuff you are useless, from what I see there is very little busy work to give you while you figure it out. The number of internal staff's children willing (and able) to get to that level in math/stats/coding ect. is much, much smaller.

But, more importantly, the difference in worth between a guy who went to an OK undergrad, sorta learned real analysis and took regression/time series vs. the man/woman who was an IMO gold medalist, has a Ph.D in Probability and Stochastic Calculus, and codes like a second language is enormous.
Meanwhile, the difference between someone who knows excel really really well and has all the accounting ratios memorized and the CEO's descendent who is about 20-40 minutes behind the other guy all day isn't quite as big. It is still an issue, sure, but it is a different kind of issue entirely. At the end of the day, banking is a time suck; but if you get in the door, you're willing to work whatever hours they tell you, and you are somewhat competent, I haven't heard of any reason you'll be out of place. But among all the top-tier men and women I know who went standard banking... I really can't tell the difference in any of their educations- there is no differentiating factor there.

The bankers I know are intelligent, incredibly driven hard workers. They typically earned their spot, I respect the effort, talent, and drive it took to do it. However, it doesn't take anywhere near as much effort to become qualified for IB work. When it comes down to hiring a relative of the man/woman who will give you your bonus (or not) vs. an overseas kid who needs sponsorship, there just isn't much of anything that overseas kid can offer that the saturated job market here in the US doesn't have in droves. But in the quant space, for the reasons listed above, overseas applicants can stand out because they are often more competent than the US kids - and when it happens it is very noticeable.

I don't disagree, but that isn't the point.

@MRoss is one to answer this part; but he said above that they don't. I'm just speculating as to why they wouldn't need to sponsor, I don't have the experience to tell you whether or not they really do.

Quant qualifications are relatively higher than entry level banking roles because quants will start "higher up" on the ladder (due to the grad + experience requirement). As a result, entry level positions for quants and bankers is not fair comparison. For sell side, making VP as a quant is a much quicker and a less selective process. Being an analyst is most definitely a time suck, but just because you work the hours, doesn't mean you will get the promotion. Analyst -> Associate, versus Associate -> VP and ED -> MD are very different jumps. These guys are fully expected to have PnL attached to their name at a high level.

Not exactly reasonable to compare quant shops vs banking - sell/buy side are two drastically different environments. The banking equivalent buy side institutions are wildly competitive, debatably more difficult to breach. Entry level buy side quant positions are still hiring fresh out of university. Sure doing math at a graduate level is hard and takes time to master, but proving yourself in a classroom is much easier than doing it in the real world. A lot of the "interview requirements" are pretty stupid to be honest. It isn't shocking that there is such a high turnover in the super competitive quant spaces. Entry level quant interviews are showing that we aren't valued for tangible knowledge/experience, just our ability to memorize a few books full of stupid brainteasers and math problems. As a result, every graduating class brings "a competitive group of quant candidates."

The reason employers hire quant PhD's with no experience for quant roles is because they don't need it. A lot of quants are shielded from actual market mechanics - you would probably be surprised by how market shallow quant work can be. Quantitative work in finance is definitely not new, but is now becoming a more mainstream marketed career path. The emphasis on MFE programs, specialized undergrad programs, and internship opportunities may drastically change the landscape of quant finance. I am a little critical of the current quant market, I believe it has a lot of room to grow and fine tune.

All in all it is just a different skill set. There are a lot of different banking jobs and a lot of different quant jobs. I am always down to laugh and talk bad about banking, but it wouldn't be fair to make a "quant is harder than banking" blanket statement. It's not worse, it's just different.

 

[MRoss]

Example: Take any investment bank in New York.

Risk Analyst: Starting salary 90K, sponsor YES
Investor Relations, Prime Brokerage, Desk Reporting Analyst: Starting salary 90K, sponsor NO.

Same level of education, same salary.