Job vacancy: CDO quant in New York - at least $350,000

Whatever the state of the market for collateralised debt obligations (CDOs) - and for corporate bonds (credit) as a whole - experienced CDO quantitative analysts are still in short supply.

Hermendra Rai, a consultant in Huxley's global derivatives practice, estimates that no more than 200 people have the necessary qualifications for the job -- probably fewer. 'It's a relatively new product, only about 10 years old, and there are only a handful of people out there with five to six years of experience who have been in the forefront of it all,' he says.

'We have a lot of relationships, but with this ad we are hoping to catch the attention of someone we don't know about, who has not been turned up by our network.'

Typically, CDO analysts made a mid-career shift a number of years ago into the field from a related one, such as equity derivatives. However, Huxley's client would not consider a candidate trying to make that shift now - it wants someone seasoned in the field. Rai says perhaps two to three people currently working for each of the 40 or so investment banks that are significant players in the CDO market might fill the client's requirements.

These include, ideally, a quantitative PhD from a leading university, proficiency in programming, preferably in C/C , experience modeling and analysing all sorts of CDO products, including bespoke products, in creating and advising on CDO hedging strategies, and experience interacting with clients, although this isn't a marketing job.

The bank, which Rai won't describe, is looking for someone who will play a a central role in modelling existing products and in coming up with new products and hedging strategies - product development is key. Its business is with large institutions hedging their credit risk.

So far, Rai says, the response to the ad has been healthy. It advertises total compensation of $350,000. However, he says, the pay is flexible. 'For the right individual - someone who has been in the CDO market from the beginning and has helped to develop it - that figure might be substantially larger.'

As for the market's prospects, Rai does not see an upturn in the underlying credit market itself for a year or two. 'We are expecting much more recruiting activity on the equity finance side,' he says. However, he points out, it doesn't make sense to talk about boom and bust in derivatives.

'The whole idea of credit derivatives is that even if things go very badly in the credit market, you are hedged, so it shouldn't affect you. There will always be a demand for good CDO people.'