Top quality quants are still in demand

Top qualifications are no guarantee of a job in most areas of banking these days, but quantitative specialists with PhDs are still in demand.

The shift towards complex financial products is fuelling a need for top flight mathematicians and there are not enough to go round.

Quantitative experts are required for everything from front office positions structuring and pricing complex products on trading desks ('desk quants'), to back office opportunities assessing market risk and validating pricing models.

Among other positions, firms have been advertising for quantitative analyst to work for internal hedge funds, for desk quants for credit derivatives vacancies and for quantitative equity strategists.

In the past few days, a number of job advertisements have specified at least three years' experience, plus a PhD or MSc in a quantitative subject and familiarity with programming languages such as C++ and VBA.

Shelley Ashton, of the quantitative recruitment specialist Millar Associates, said pay is holding up well, particularly for front office roles, which are strongly linked to revenue generation. A front office quant with two to three years' experience typically receives a package of 250,000 ($395,000), comprising base salary of 100,000 plus a bonus.

Moreover, pay is rising as demand outstrips supply. Though there is an ample supply of candidates with quantitative PhDs, the sector is suffering from a shortage of complementary skills.

Greg Patel, at recruiter Norman Broadbent, said: "As well as being highly mathematical, candidates must have a combination of market awareness, good financial product knowledge and technical computer skills. Very few do."

Patel said matters are made worse by the fact that quant vacancies are hard to ignore, particularly in the front office. "These are small groups of highly talented people that support trading and customer business. Staff shortages or departures are not easy to absorb."

New positions for quants are being created as the use of credit derivatives and other complex products grows.

The lack of good candidates in London means that banks are increasingly looking to continental Europe. Bocconi university in Milan and Paris IX (Université Paris Dauphine) are popular hunting grounds for quantitative recruiters. Both run PhD courses combining maths with finance.

Students from these schools are well equipped with the necessary triad of mathematical, financial and computer programming skills.

Newly qualified PhDs moving into quantitative roles in investment banks in London will find that pay is adequate. An entry-level quant typically receives a standard associate's salary of 40,000.

Remuneration rises steeply thereafter. Team leaders with more than four years experience typically earn a total package of between 400,000 and 500,000, said recruiters.

Ashton said internal hedge funds are some of the fastest growing and highest paying employers of quantitative analysts. This is a relatively new area, but for candidates with a few years' experience base pay is more than 150,000.