2020 was a weird year. A quick summary from a job-market perspective:
Companies continued to hire, particularly in technology as the pandemic economy revolves around everything remote. Amazon hired over 400,000 employees this year alone (of course, most of those are not technology jobs).
Nobody has interviewed face to face since March – 100% virtual interview experience, who would have thought? And virtual interviews did not slow down the process, in fact, it may have made things more efficient.
Remote, dispersed workforce is here to stay:
Location strategy continues to dominate metro hiring at large investment banks. Large percentages of employees are being reallocated according to longer-term distribution goals. The migration is happening over time with teams growing only in non-metro regions and local attrition often replaced at lower cost offices.
Go south young man – Wall Street looking South, Goldman leading the way.
This trend is obviously not good for NY salaries, but fortunately Big Tech is tipping the scale the other way.
Diversity was a dominant hiring priority in 2020, and it looks to be an even higher priority for 2021. Every IB is focused on diversity, and now even hedge funds and FinTech firms are emphasizing the need for diversity.
Contract rates have been significantly depressed this year, and it is not clear if rates will snap back. At least at the IB’s, significant rate increases are unlikely as location strategy impacts metro budgets.
Agile has taken over – goodbye BA’s, hello Scrum Masters.
Hedge Fund Outflows Continue Yet Tech Hiring Continues
A shrinking hedge fund industry is not new news. The Washington Post reported that the 2nd quarter of 2020 marked the ninth consecutive quarter of outflows from hedge funds. Even so, hedge funds continue to make technology hires, though hiring is idiosyncratic to each firm rather than being an industry trend. The Financial Times notes that large, multi-strategy firms are faring best:
“these ‘multi-manager’ platform-like firms constantly poach from their competitors, leading to a merry-go-round of talent among them. Nor has every multi-strategy hedge fund done well lately, with the best results increasingly coming from the biggest firms, which are better able to invest in faster computers, more data, and the best staff. But the reality is that investment management has become such a wildly complex, difficult profession that teams, technology, and process today make up the secret sauce of consistent success, not solitary iconoclastic geniuses.”
These observations are entirely consistent with what we have experienced the past few years.
KCG Case Study
I was recently talking to someone who had formerly worked at Knight Capital Group. I was aware of their huge loss a few years ago, but I didn’t know the details. Curious, I found this article from 2017 that details how a software error and bad engineering practices almost wiped out the firm. The familiarity of each part of this scenario makes the story very relatable for anyone who has worked in this field.
README.txt for Your Career
I came upon this article by Patrick McKenzie recently, “Don't Call Yourself A Programmer, And Other Career Advice.” In his words,
“If there was one course I could add to every engineering education, it wouldn’t involve compilers or gates or time complexity. It would be Realities of Your Industry 101, because we don’t teach them and this results in lots of unnecessary pain and suffering. This post aspires to be README.txt for your career as a young engineer. The goal is to make you happy, by filling in the gaps in your education regarding how the “real world” actually works. It took me about ten years and a lot of suffering to figure out some of this…”
I can't say that I agree with all of it, but it includes many valuable observations. More importantly, it emphasizes the value in reverse engineering the “operating system” of your company and industry to understand your place in it and how to maximize your options.
Bad Data Science?
A reporter asked me about Coatue a few weeks ago. We don’t work with them, and I knew nothing about the firm. He forwarded me his story a couple of weeks later when it was published. It reads like the script for a dramatic TV series. I found it eye-opening from a number of viewpoints.
Good Data Science?
Here’s a perspective on what some companies are really looking for from the quants. Vishwanath Tirupattur of Morgan Stanley:
"We are acutely conscious that data mining is something we don’t want to do. If you torture the data enough, it will tell you something you want to hear… Complexity in itself is not a virtue… rediscover simple scientific quant strategies... rooted in empirical research and designed to harvest persistent returns."
Although, here is another MS Quant perspective that is quite different.
Affinity North Team
Not everyone knows the great Affinity North team. All are very experienced and expert in the financial technology field. Please see their bios linked below:
Current Priorities
We will publish a list of active roles within the next month, as this list will change dramatically over the course of the next few weeks as 2021 budgets are finalized.
FinTech
Most in Demand: Java, Python, Scala, Javascript, Data Engineering, DevOps
Buy Side
Most in Demand: C++, Python, Data Engineering, DevOps
Sell Side
Most in Demand: Java, DevOps, Data Engineering, Big Data - Diversity
NOTABLE
Contract
We are working on a premium (senior rate) java engineer/architect contract. Please inquire if interested.
Management
A major investment bank seeks a senior ED to lead their Client Reference Data team. This person needs significant experience with CRD, AML, KYC, and must have a deep technical background and a successful track record of technical leadership.
Our opportunities are constantly changing. Please be in touch if you are interested in talking with us about your career.