Offered role in 'operations' at a hedge fund. A good middle step?

[watchingconan]

hello quantNET

i work in audit and was now offered a role in operations at a hedge fund. the fund is an off shoot of a fairly well known hedge fund. the parent has $50bn+ AUM, the hedge fund i've been offered has $5bn+.

is working in ops a good way to 'learn the trade' so i can hopefully join an actual trading desk? is this common?

 

[Onegin]

It's not the direct path; you could learn as little as trade settlement, or as much as derivative accounting and collateral management which would be very useful. People do make the hop, but its becoming less common than it once was; typically you'll have better luck the smaller the firm. . .

 

[watchingconan]

It's not the direct path; you could learn as little as trade settlement, or as much as derivative accounting and collateral management which would be very useful. People do make the hop, but its becoming less common than it once was; typically you'll have better luck the smaller the firm. . .

thanks for the reply

from what i understand the firm has about 150 staff worldwide. 60 in the office that i've been asked to join.

why is derivative acct'ng and collateral mgmt more important than settlement? also do 'operations' cover all or only some part of these topics?

 

[Onegin]

the scope of operations varies from firm to firm, but generally covers activity related to the accounting, reconciliation, and treasury functions within a hedge fund. Sometimes you'll get performance thrown in; probably the info is in the job description.

I wouldn't say deriv acct'ng / collateral management are more important than settlement, but they do seem to align with your goals (at least as I undesrtand them). You'd learn how trades are financed, how to value the different instruments, and considerations made when choosing instruments.

 

[watchingconan]

great thanks for the info.

i understand that the fund has a sharpe ratio of above 4. is that good? the role is more operations with the view to becoming more backtesting risk p/l and volatility. i'm still in two minds whether i should take this and if it's a good step to get into quant trading.

any advice would be great!

 

[Onegin]

I’ll assume you’re not trolling. . .its unusual for a HF to let an offer sit for a few weeks. Sharpe of 4 is lovely, but not the full picture.

What are your alternatives? That’s probably the question you should focus on. What can you do to improve your alternatives? That might be a close second. If education is the answer to #2, is it worthwhile to forgo working?

There are too many permutations of your experience, education, goals, and abilities to enumerate. Consider - It’s a very competitive market, and by extension a very competitive job market. What’s your edge? Why do you think you’ll be good at this?

All else equal, it’s easier to move within a business than to break in outside of it. That said, it can be a hard path.