On the warmest February day on record in Cambridge, about 60 students at the Massachusetts Institute of Technology opt to stay inside a dimly lit lobby, crunching data and churning out pages of analysis, rather than enjoy the sunny, summer-like Friday afternoon.
No, it isn’t mid-term time. The students -- handpicked from 400 applicants -- are competing in a datathon hosted by the $26 billion hedge fund Citadel. Ken Griffin’s firm is upping the ante in the industry’s chase for data scientists and engineers, hosting 18 competitions at universities across the U.S., Britain and Ireland this year. The prize in the final data championship: $100,000.
“We need strong, analytical thinkers who can work through big, complex data sets,” Justin Pinchback, head of talent strategy at Chicago-based Citadel, said in an interview during the MIT datathon. “If you limit yourself to one region or one school, you won’t get as good a look at the entirety of the talent market, and that’s what we’re trying to do.”
Hedge funds, which have long used fat pay checks to lure employees, are improvising with new approaches to recruit technologists amid fierce demand for them across the economy. Traditional hedge funds like Tudor Investment Corp. have been chasing quants as their lackluster performance and pressure on fees makes them less enticing places to work.
Two Sigma vs. Google
Even the most technologically advanced hedge funds like Two Sigma, whose Compass Cayman Fund has outperformed rivals for the last four years, vie for talent. They are up against sexy tech giants like Google, with its self-driving cars, and Facebook, which claims billions of users.
“The trouble is to find the people who are capable of innovating," Luke Ellis, chief executive officer at Man Group Plc, said at the Milken Institute’s London summit in December. “They are not particularly driven by money, they have got lots of financially interesting offers and so you have to find other ways of trying to attract them.”
The rivalry for talent in quantitative research, big data and analytics has never been more intense, according to John Hindley, a partner at recruitment firm Heidrick & Struggles. New computer science graduates from top schools can command as much as $300,000 in annual compensation at a big hedge fund compared with $75,000 firms might pay to a recent graduate with a business degree, according to Hindley.
The traditional hedge fund fast-buck culture, which is anathema to the experimental ways of science, can make recruiting even harder. So hedge funds are wrapping themselves in academic robes and pitching their firms as research centers where teamwork is prized, complex problems are solved and papers are published.
Omar Iqbal, head of human capital at London-based Winton, likens the quantitative hedge fund to CERN, the nuclear research center in Switzerland.