Morning Coffee: Elite hedge fund quant gets $30m job offer. And an M&A guy who hasn’t worked for two years is back in the game

efinancialcareers.com:

“Hedge fund quant” is a pretty sexy job description, but the reality is not always as glamorous.  Hardly anyone spends their days trying to create new magical algorithms to beat the market.  Instead, there’s a lot of model validation, code optimisation and endless, endless data cleaning.  It’s often joked that as much as 30% of the job of being a quant is just sitting around making adjustments for bank holidays.

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However, at the top of the tree, there really are people who really do spend all day trying to research whizzy new algorithms to beat the market.  At TwoSigma, these secret formulas are called “techniques”, and people like Kan Huang live the dream of working in the intersection of “intellectually challenging” and “incredibly lucrative”.

They’re paid accordingly. Business Insider says Huang is now leaving TwoSigma to go to Cubist Systematic Strategies, and (presumably in a deal full of earn outs and clawbacks, but even so) picking up a rumoured $30m to do so.  It should be emphasized that in this particular part of quant world, it’s really forbidden to take trade secrets from one employer to another, so this $30m is the market price of Huang’s brain alone – the Point72 subsidiary is betting that whatever he did for TwoSigma, he can do for them from a clean start.

That’s one of the reasons that this kind of job move isn’t seen all that often.  When it comes to a bidding war, the incumbent employer has an obvious advantage from the existence of the current “techniques”, plus the fact that the effective gardening leave period is extended by as long as it takes to make new models, plus the risk that someone’s techniques won’t work as well in a subtly different