Career prospect in Chicago

[ymous]

Can anyone give me some insight about the career prospect of a quant in Chicago? I'm trying to decide whether to attempt a move to Chicago or stay in NYC. I think the quality of life (outside work) will dramatically improve if I move to Chicago, but I'm not so sure about the job availability and stability there. From what I hear, Chicago has mostly small high-turnover firms, so one would have to move around often. Would that be a viable option? It would be terrible if I move to Chicago and have to move back to NYC in a few years. I'd appreciate any thoughts. Thanks.

[filthy]

it depends on what kind of quant work you are looking for. there is practically no structuring or pricing done here but there are opportunities for risk, trading strategy development and quant developers.



there are also some reasonably large firms. spending exactly no time thinking about it, citadel, CTC and DRW all seem large to me. Also, i'm not sure why you have to move around more with small firms. i think large firms may actually have less job security these days.

[ymous]

Thank you for the answer. I realize these days large firms don't necessarily have good job security. But, I think job availability may still be an issue. Does Chicago have enough number of quant jobs that you can be reasonably assured that if you lose your current job you will be able to find another one soon? I guess that's my biggest concern.

[hnnbl]

Filthy, interesting you should mention that there is less job security at large firms. Why do you say that would be the case? I'm currently considering moving from a very large place to a not-so-large hedge fund (still large in buy-side terms though) and one of the reasons why I'm not fully convinced it would be the right move is the feeling the job would be a little less secure.

[filthy]

it could just be the availability heuristic but it would seem to me that many small firms would need to blow up to match the number of people laid off from bear and lehman alone. maybe this is the case but it doesn't conform to what i've seen.



further, at a large firm you will often just be adrift on the overall tide. at a small firm if you lose your job there is a greater chance it is because you deserved it.



i really think the big issue is what kind of work you are looking for. chicago will tend to get you closer to traders.

[kc11415]

Caveat: my Chicago experience was many years ago when I was much more junior and exclusively on the back-office IT support end of the markets, without any exposure at the time to front-office or quant-level topics. (returned "home" after school on the east coast)

With those disclaimers out of the way, I'd offer the following generalities:



A) Atmosphere

A1) Career/office environment differences between Chicago and NYC may be greater than the differences between NYC and London.

A2) There are enough hires from out-of-state for the ranks of specialized professionals for those pools of staff to be tuned into more cosmopolitan perspectives. However, the HR and other administrative staff who influence the formalities of your employment relationship will more often be local hires, bringing their midwest perspective in how your terms of employment are interpreted.

A3) Those admin staff seem to have an attitude that it is always a buyers/employers market in the job market.

A4) The firm will likely be more solicitous during the recruitment phase. However, once your onboard, authority is something that is not only not to be challenged, it is also not even open for discussion. It is no coincidence that Chicago is the setting for Mayors Daley 1st & 2nd, Rahm Emanuel, whose top-down leadership style is generally representative of Chicago.

A5a) The generally larger organizational structures in NYC seem to create more auxiliary/ancillary staff roles which have the potential to turn into cubbyholes which are not particularly visible to the rest of the firm. For people who want to hide-out and coast, this can be advantageous. For people who want to perform and make a name for themselves, this can be a challenging hole to escape.

A5b) The generally leaner organizational structures in Chicago tend to mean your work is more visible to others in the firm, for better or for worse.



B) Business

B1) Regional variations in markets evolution makes Chicago dominant in some sectors and rather peripheral in other markets.

B2) For exchange-traded options, Chicago has historically been the leader. The Black-Scholes model came out of Chicago for a reason. The dominant options pricing model was going to come out of Chicago, regardless of whether it was Black, Scholes, Boness, or someone else.

B3) For certain classes of commodities, especially agricultural, Chicago has no peer. For other commodities in which overseas markets are an important part of the supply chain, i.e. oil, sugar, cocoa, precious metals, Chicago is irrelevant.

B4) Switching out of a job in Chicago could very well mean moving. Depending on what stage of life you're in, this should not always be seen as an adverse event.

B5) I've done demographic analysis on regional changes in financial markets employment. NYC had 44% of the USA financial markets employment in about 1970-1980, but this has fallen to about 22% after 2000. What has happened through business cycles is that downturns hit all regions. However, recovery does not happen equally in all areas. Financial markets employment recovers more vigorously in cities other than NYC with other cities bouncing back and growing to new levels. In contrast, NYC is lucky if it can almost recover to prior levels in absolute numbers, though not in relative numbers. I am inclined to infer from this that the NYC market is saturated, but that other regions still have unmet demand in financial markets.

B6) While regional practices tend to assume a buyers market for labor, it is taking them a while to acknowledge the changing realities in the financial markets space.

B7) Chicago & Boston are farther along the ramp up curve absorbing from NYC's decentralization than most other US cities so Chicago's growth in percentage terms will probably not be as vigorous as other smaller cities, such as San Fran, LA, Austin, Houston, Dallas, Miami, Atlanta, St.Louis, Denver, Minneapolis, etc.



C) Culture

C1) Civility: Profanity in the office is nominally taboo in most of the US, but this taboo tends to be more substantive outside of the NYC-metro area. In the Southern US, it can get you fired. In the midwest, it may or may not get you fired, but you would likely at least get treated differently.

C2) Cosmopolitan? (not as much as on the coasts) Diversity is accepted because that is the rule. Following the rules is not something that merely gets lip-service payed to it. Rules are things that are expected to be followed. That said, while accepting diversity is better than only tolerating diversity, it is still less than the embracement of diversity that tends to be more common on the coasts.

C3) Guns: While the laws within the city of Chicago are quite strict, throughout the rest of Illinois gun culture is a fact of life. On the east coast, coworkers might head to the pub for a pint. In Illinois they might head to the range to see who can shoot a tighter group. Even if you don't own guns, it is easy enough to get an FOID which will allow you to go to a range and rent a gun for target practice.

Don't get the wrong impression. I am not implying that there is a militia culture. This is more analogous to on the coasts where someone might keep a basketball and a pair of high-tops in their trunk to go shoot hoops after work or on the weekend. This is the mid-west equivalent.

C4) Food: If you like to eat meat in all sorts of varieties, Chicago is nirvana. If you are vegetarian, or even a vegan, you will probably find your tastes catered to more on the coasts.

C5) Real Estate: no comparison.



I am certain that some of my impressions of Chicago are outdated. For example, alcohol in the office is probably something that has changed over the years. When I interviewed at Swiss Bank I was informed that the padlock came off the beer fridge at 4pm after the markets closed. At the firm where I actually worked, the prior owners had a personal wine cellar in the basement, and beer was served at cook-outs in the parking lot. In NYC I was aware of more than a few old timers who kept a bottle of whiskey in their desk drawer. I think reduced tolerance of alcohol in the office is across the country.


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EDIT: I think the decentralization from NYC tends to be NOT so much migration of roles that are heavily centered in NYC, such as sell-side structuring, but rather dispersal of roles that are generic across regions.

[ymous]

Wow. Thank you so much for the thorough comparison between Chicago and NYC. I lived in Midwest for many years, and am not sure I agree with the cultural aspects you describe. That may well be because my experience in Midwest was mostly in academic environment. I have almost no first-hand experience with the financial industry there. Anyways, what worries me most is this:



"Switching out of a job in Chicago could very well mean moving. Depending on what stage of life you're in, this should not always be seen as an adverse event."



I am in a stage where I'd like to settle down. Considering the volatility of finance jobs, I don't know if Chicago's quant job pool is big enough for one to comfortably settle down in that area.

[kc11415]

The response by 'filthy' is more concise than mine, but at least as significant, if not more so:

Phrases such as "quant prospects" or "quant job pool" imply that 'quant' is a monolithic homogenous field. There probably are at least a few employers in agreement with that perspective through either ignorance or desperation. -- Harry Markopolos' managers at Rampart come to mind.

However, I'm inclined to think such employers are more hassle than they're worth.

(i.e. Dilbert's PHB)

You have still not yet disclosed your area of specialization within the quant field.

That would be helpful.



-KC.

P.S. what part of the midwest are you from?

(that is also not a monolithic/homogenous culture)



P.P.S. Real Estate market regional arbitrage will depend on whether you already own something in NYC, or not.

[kc11415]

ymous>my experience in Midwest was mostly in academic environment



I also had experience working in academic environment in both IT & academic roles on the east coast before "returning" back to the mid-west in a purely commercial role.



As it so happened my technical experience and skills from the academic world just happened to land me in a 'sweet spot' 'ahead of the curve' such that I'd already 'been' where they wanted 'to go.'



That put me at an advantage in technical aspects, but did absolutely nothing to prepare me for the cultural aspects in transitioning from the academic world to the commercial world.



i.e. I worked for a manager who thought her experience working at McDonalds while in school was a great model supremely adaptable to much of the business world culture. (if I was attempting to write comedy, I could not come up with better material than that.)



Some managers I worked for in academia on the east coast came from Illinois, leaving me personally inclined to think that academic work cultures between east coast and mid-west have more similarities, than do academic & commercial work environments within a given region.



Obviously, that is a small set of one person's anecdotal observations, and certainly no representative sample.


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Separately, a hiring manager at Swiss Bank Corp, when I declined the higher monetary offer he made responded in a childish manner questioning my maturity and professional prowess because he couldn't figure out why I would do such a thing. Fortunately, that only re-affirmed my decision for me. However, that was a prelude to the pettiness I would come to expect in the commercial world filled with vast numbers of people who imagined themselves type-A personalities, with only a few being able to live up to their hubris. (The rest are just 'phone-ing it in') Of the various Nobel laureates with whom I've worked in academia, I've yet to experience any as full of themselves as the numerous 3rd-rate and 4th-rate posers and wanna-be's I've run into in the commercial world.

As for the job I chose in lieu of Swiss Bank Corp, it still took me to Geneva & London & NYC & Silicon Valley & elsewhere, along with an opportunity to modernize my little bit of "the street" out of the technical stone-age.