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Even top hedge funds are struggling to find data science expertise.

Two Sigma's chief technology officer: finding talent is the hardest thing

Two Sigma, the quantitative hedge fund, is hiring. Speaking at today's AI and Data Science in Trading conference, Jeff Wecker, Two Sigma's chief technology officer, said the fund is both "hiring and hiring pretty aggressively." There are interns arriving at Two Sigma this summer, said Wecker; there are "associates" in the pipeline and there are incoming experienced hires. 

For all Two Sigma's enthusiasm for increasing its data science headcount, Wecker said finding new people isn't easy. "At the end of the day, talent is the scarcest commodity," he told attendees: Two Sigma isn't just competing with rival funds but with big technology firms too. The fund has begun looking at "less conventional ways" to find talent in an effort to fill the gap, he added: it's got a new diversity program that takes it to different schools, and it runs 'Alpha Studio', a platform that allows researchers from outside of finance to submit ideas and to get paid on a freelance basis. 

As data becomes the key differentiator for quant hedge funds, Wecker - who joined Two Sigma from Goldman Sachs in July 2020 - said reducing the latency between data ingestion and data usability by researchers has become a key source of competitive advantage. The trouble is that the yield from new data decays over time as rivals begin using it too. At this point, Wecker said data becomes commoditized and that value can be extracted from additional "thoughtfulness" and by combining it with other data sets. 

For Two Sigma's quant researchers to really have an impact, they need to have "the easiest time possible when they do the research," said Wecker. The fund is therefore investing heavily in both the discovery and the ingestion of new data sets. A comparatively small amount of money invested in data wrangling, for example, has a "multiplier effect" on the yield of a researcher's time. "The way we get leverage is by reducing as much of this repetitive activity (e.g. data wrangling and cleansing) as we can so that the people who are doing the research can spend as much time as possible on the research," Wecker added. 

If you work in data for Two Sigma, the implication is therefore that a lot of your time might be spent cleaning data in preparation for the fund's quant researchers to actually analyze it. However, Two Sigma has also partnered with data supply chain operator Crux Informatics in 2018 to help cleanse data before it arrives in-house, so you could be spared the early data cleaning stages. 

As former Citadel quant Jeffrey Ryan told us recently, being able to handle huge unstructured data sets is increasingly important in the quantitative finance space as funds seek to analyze live data from social media. Wecker confirmed this: “Increasingly, news streams and social media streams have value, but it’s a pretty challenging process to filter out fake signals.” 

Some of the most interesting data in future is likely to be sourced not just from social media, but from environmental, social, and corporate governance sources, said Wecker. He said he's even invested in an ESG data company himself.

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Photo by Edgar Soto on Unsplash

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AUTHORSarah Butcher Global Editor
  • Da
    Dave
    16 March 2021

    The reason they cannot find the talent is a). They don't pay enough, b). They keep turning away qualified candidates due to their myopic "let's copy the google" interview process. Two Sigma presents its hiring process as being "data driven", but this couldn't be further from the truth. Asking someone to invert a binary tree, reverse a linked list, calculate pi to 1000 digits etc and totally disregarding their previous experiences, achievements and motivations is not clever at all. Also, if you're going to expect people to go through the google interview process, why don't the candidates just go and work at Google? Are you seriously telling trying to me that the work is more interesting there than at a tech company... Come on, grow up

  • Ja
    Jackson
    15 March 2021

    FYI, AlphaStudio is nothing but Two Sigma’s way to exploit cheap labors. Say whatever he wants to say, but without big real money no one will believe he is seriously about finding talents

  • Ja
    Jackson
    15 March 2021

    He was totally wrong. Finding talent is easy. What he’s compliant about is “finding talent with his budget constraint”.
    If he is serious about finding talent, then pay people more, bid up. You can’t expect to find talent when you don’t want to pay them $1M+ money.

    Talents are always there, you just need to pay the price they deserved. You can’t be cheap and lure talents at the same time.

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