On Leaving Quant Finance

This blog has been quiet the last 4+ years while I was working at Teza Technologies, a quantitative hedge fund based in Austin. A combination of financial regulations, company policies, and a culture of secrecy keeps people from talking about life at quant funds- but now that I’m out, I’ve got a lot of thoughts to share!

I’ve had an exciting four years, with a lot of technical, managerial, and personal growth. When I went into finance in late 2018, my goal was to someday lead a team of 2-3 researchers and get to know all aspects of managing a systematic portfolio. I got lucky: by late 2020 I was realizing managing that team, and had some wild stories from the market convulsions of March/April 2020.

By late 2022, I was still enjoying the day-to-day work and continual challenges of predicting the future, but had to recognize that there were things that I couldn’t see working for me in quant finance. This post lists the things which led me to move on from the industry:

• Geography: Clusters of high-caliber quants and quant funds only exist in a small number of markets (Chicago, New York, London). I realized that I wanted to put down roots in San Francisco, and wouldn’t have many employment options in the field.
• Quant finance is socially isolating because of a culture of secrecy. There are no quant finance meetups, no conferences, no chances to meet peers. I am an extrovert who thrives off exchanging ideas with new people. Even though I loved the day-to-day technical work, I had to admit that I’d never have my social needs met by the work, and that my interpersonal skills would never help advance my career in finance.
• You need an incredible amount of conviction in the face of uncertainty. Without having customers to talk to, you never know whether your successes might be just dumb luck and your failures a bad research process. Every day, you need to be able to look at your portfolio’s bad performance and convince yourself that you’re just unlucky- but look at your successes the next day and tell yourself that it’s because of your brilliant insight. If you’re managing mid-frequency strategies, this plays out over months, making for an emotional roller-coaster that I found very draining.
• The cool math is no longer in finance. For a long period (until ~2015) quant finance was where the most interesting private-sector mathematical challenges and big data problems were being solved. That crown has now passed to the AI/ML/robotics space, where interesting math is creating some stunning new technologies when paired with internet-scale datasets.
• The pay isn’t necessarily better than tech (and may be worse). In 2020-2022, compensation for the tech roles surged, both in base salaries and equity/stock grants. When I returned to the Bay Area in 2022, I realized that I was being dramatically undercompensated relative to the tech world, something hammered home by websites like levels.fyi.
• Work/life balance is typically much better in tech. There are exceptions in both fields, but the expectation in tech is that you might be working 40-50 hours/week with a few busy periods with 60-hour-weeks, and in finance the expectation is that you’ll be working 50-60 hours/week with a few busy periods with 70-80-hour weeks. Finance folks laugh at the idea of taking two full weeks of vacation; tech workers gripe when they only get 4 weeks of vacation including holiday shutdowns.
• Tech companies are more likely to think about company culture and career growth. Finance is dominated by an attitude that the only thing which matters is the bottom line, and that it’s the responsibility of the individual to leave their personal lives at home. Tech companies have been pushed by their workforces to focus more on inclusivity, teambuilding, creating a culture with a narrative of impact and purpose, and on identifying employee needs around career and personal growth.

I first dreamt of working in finance when I met some of my uncle’s friends in investment banking during high school- his friends seemed smart, glamorous, funny, and full of great stories. While I’m glad that I found a way to experience Wall Street on my own terms, I’m relieved to be back in the frothiness and quirkiness of the SF Bay Area, finding the interesting people building the next great crop of startups. Finance has some brilliant people and fun problems, but I’m excited about what the future holds for me in SF. May we each find our own best path forward.