Each year a new "super candidate" emerges among executive recruiters panning the streams for that next "gold" standard among employer expectations. Those of us in the business of connecting job seekers to job openings refer to these rare and often "too good to be true" candidates with the perfect combination of skills, personalities and knowledge as a "purple squirrel" representing that difficult to find person who may only exist in the imagination.
Talking to recruiters and hiring managers, it appears this year's purple squirrel could be what one headhunter called the "Quant Social Butterfly," that candidate who can excel both in the mathematically challenging world of quantitative analysis as well as in the "real world," where he or she can be personable, likeable, and able to communicate and relate easily to others in a variety of social situations, such as client dinners and events.
Quants and the Financial Crisis
Ironically, it just so happens that it is the "real world," with its unpredictability, that has given quantitative analysis so much trouble of late and caused quant research to lose favor among a large number of investors who blame the quant community for not foreseeing the "real world" factors that led to the financial crisis.
Richard G. Lipstein, a Managing Director at the New York based global executive search firm Boyden who works with and places quants in a variety of positions, believes that's one reason investment banks are so eager to find quants with social skills. "If you're dealing with a client who believes quant analysis has lost its credibility," says Lipstein, "and you have a quant who can meet with that client and help them overcome their fear, it would put that firm ahead of its competition."
Speaking in Quant
Being socially challenged isn't the only weakness some quants may have to overcome. Lipstein says the inability to communicate in the real world is perhaps as big a problem for a quant as being socially adept. "Many of them simply can't speak in a language that's understandable to most people but are brilliant when it comes to quantitative analysis. The problem banks face today is that it's hard to sell quant analysis and to do so you need someone who has his or her feet firmly planted in both the mathematical world and the real world."
"There's some truth to that," agrees Deborah Rivera of the New York based executive recruiting firm, The Succession Group. "But the topic is much more complicated on many levels. Universities prepare people to become experts in a particular subject, but not how to conduct themselves as business people. Twenty years ago, there was an assumption that if you went into investment banking you were socially nimble and knew how to use your golf game or your tennis game to conduct business. Fast forward to today and that's not the quant track. The world has changed. Technology has created a need for a more quantitative approach and that requires people with a quantitative background."
It has been Rivera's experience that American students today seem less inclined to pursue quant disciplines. "Today's children of the investment banker that played golf 20 years ago would rather study film, philosophy and exotic languages," says Rivera. "They're less interested in pursuing careers in math or science. It's becoming rare to find American students who qualify for quant roles. So we are forced to do international recruiting or we recruit through universities from math and physics majors and very few of them are Americans."
Opposing Schools of Thought
There are two opposing schools of thought regarding the sociability value of quants. Some, such as Constance Hamilton Jameson, CEO of DerivativeSearch, Inc. a management consulting and executive services firm operating globally, believes socially sophisticated quants play key roles in the higher levels of the premier risk management companies often after having honed their skills at Wall Street's top financial institutions.
"We deal with a number of the most successful quants at the top of the market who have outstanding social skills and also intercultural skills," commented Jameson. "The top quants selected by the Fortune 100 to perform risk analysis may have clients as diverse as the States of United States, and major corporate and investment banking enterprises in the United States, China and Europe. Many have assignments all over the world and without good social and intercultural skills they would not get entrée into the corporate boardroom or be prime candidates for coveted expert witness trial roles in OTC derivatives litigation."
Leave My Quants Alone
On the other side, there are hedge fund managers who prefer their quants to have no social skills so they can remain hidden in their own worlds, behind the veil of secrecy that has protected them as they develop new and exotic ways of making money. This is the finance world's secret sauce and many want to keep those secrets hidden as long as possible, or at least until new regulations go into effect that will raise that curtain or they stop making money.
And quants have been known to make a great deal of money, sometimes at the level usually linked to professional athletes and rock stars. Some earn as much as one dollar for every five their algorithmic models make and the typical algorithmic trader will make between $2-4 million a year.
The Quant Social Scene
Most I spoke with agreed that for quants to be successful on Wall Street, they have to be able to network, to manage their careers and essentially sell themselves. Jameson notes that "career asset management is essential in today's environment. As for networking she wouldn't say quants are "all over the golf courses" but "they may have more unique and edgy styles and the best are here to stay on the social scene in New York aligning themselves with superstars of all kinds."
``There's no need to reconcile social and quantitative expertise -- in fact, to be effective and global in the 21st century requires top performers to master both skill-sets,'' said David Shimko, a top quant for Winhall Consulting whose 20 years experience includes commodities risk management at J.P. Morgan, teaching risk management at Harvard Business School and the Federal Reserve and entrée into the boardrooms of the Fortune 100 as a risk management expert.
Dr. Shimko, a quant's quant Ph.D. with major risk management projects in the People's Republic of China, Sweden and South America, has recently launched a new learning platform on quant information www.abara.com.
And then there are Leslie Rahl and Peter Nicuelscu, quants extraordinaire at Capital Market Risk Advisors Inc (CMRA) who recently feted their office move and 20th Anniversary with a party featuring Dr. Ruth - yes, that Dr. Ruth K. Westheimer - the famous sex therapist who has her office within the office suite of CMRA, a risk advisory and financial-litigation support firm.
Poets and Quants
The overall perception of quants is slowly changing, perhaps because there are new avenues for them to develop their social and communications skills. There's even a website devoted to the cause, PoetsandQuants.com. It describes itself as a social network whose goal is to help graduate business school students make friends. You can create your profile, join a group, engage in a forum topic, share information and use the site as a valuable resource for those interested in pursuing a career as a quant, or at least to get an MBA.
Finding the Quant Social Butterfly
While rare and hard to find, the quant social butterfly does exist as evidenced by the few we found writing this article. Plus, I recently attended SIFMA's annual Tech conference in New York City and spoke with a number of socially adept quants and had a similar experience at a roof-top cocktail party and awards ceremony hosted by the New York Society of Securities Analysts (NYSSA). So they're out there. You just need to know where to look. Or give Dr. Ruth a call. She actually knows a few.