When Sergei Perfiliev left Goldman Sachs after four years in May this year, he offered some thoughts on his career on his Twitter account.
Working as a quant isn't quite as glamorous as you might think, said Perfiliev. Firstly, it's not all about modelling: as a quant your main responsibility is "to help traders calculate prices and risks of their books correctly." If this is done wrong it becomes a point of obsession for the whole team - even at 1am.
Perfiliev said getting the numbers right can be simple, but it can also involve, "a few hours or days debugging a vast array of different inputs that feed into a single number." At the same time, almost everything is a matter of utmost urgency. "Every request is for a live $100mm trade, and we need the price yesterday." Before you can even clarify what the issue is, he said the trade has typically been placed.
In this environment, he said there's little time to be spent perfecting code and a lot of time spent on the deliverables for senior management. Days can be very volatile: "Sometimes, it's calm, and it's just you and your code. And sometimes, it's like riding a bike," said Perfiliev.
It's not clear if these are all the reasons why Perfiliev quit Goldman mid-career, but he no longer works for the firm. These days he runs his own financial training YouTube channel instead. We asked Perfiliev (who was actually a strat) rather than a quant for some further reflections on his career. This is what he said....
Why did you give up your quant job at Goldman Sachs?
Well, the time came to move on and try something new. I thought I gained a bit of experience working in finance over the last decade, and I wanted to teach and share this knowledge with others. So, I started a financial training company, which is what I’m focused on at the moment.
Is your YouTube channel a full time endeavor?
At the moment, yes. Even though the main venture is financial training courses, you don’t get many students or clients when you’re just starting out and when no one really knows who you are.
I thought that a YouTube channel would be a great way to introduce myself to the world, show what I know, share some of my knowledge, and build an audience or a following first. If it goes well, then I can potentially start thinking about doing training courses.
How would you define the difference between a quant and a strat?
There is significant overlap between the two, as they both focus on building mathematical models or tools to solve various challenges within the financial markets.
These days the quant/strat roles are very blended, and the boundaries have been mixed.
In my opinion, a quant would focus more on financial mathematics and model development, whereas a strat would have a bit more software development responsibilities in their day-to-day. But it’s not uncommon to see these terms used interchangeably.
Were you a desk quant?
At my last employer, the official term for quants was “strategists” or “strats”. Hence a “desk strat” would probably be more appropriate. As such, we were aligned with a sales/trading desk and sat next to them on the trading floor.
Is that a privileged existence as a quant? Do most quants these days develop risk models?
Working as a desk strat is certainly a role that certainly gives you a very good exposure to the business side of things and forces you to understand and think about the underlying commercial reasons behind whatever you’re doing. We frequently worked together with sales and traders to address various issues and enable new products and features.
Developing risk models isn’t as common as it used to be and many quants are now also focusing on developing new tools and applications, analyzing data, automating processes etc.
Most mathematical pricing models have already been built and just need a few quants to support them.
Do quants need PhDs?
Having a PhD helps, but it's not essential. A Master’s degree is sufficient, as long as it’s in a relevant subject like mathematics, physics, computer science, or mathematical/quantitative finance.
If one can demonstrate strong skills in financial mathematics and programming, it should be sufficient. Personally, I think doing a PhD in Physics only then to work as a quant is a bit of an overkill. However, it does help you stand out among other candidates when applying for a job.
You can see Perfiliev Financial Training's YouTube account here.
Have a confidential story, tip, or comment you’d like to share? Contact: email@example.com in the first instance. Whatsapp/Signal/Telegram also available.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)