Uncovering the 4000 yuan daily salary "moat" recruiting interns: Quantitative private equity practitioners are not all so "bold"! Daily salary | strategy | practitioners

The daily salary is as high as 4000 yuan, which is equivalent to an adult salary of over a million yuan, but the recruitment targets are interns. Recently, a certain quantitative private equity company's "bold" recruitment has attracted high market attention.

First Financial learned that the quantitative company recruiting interns is a foreign-funded institution established in 2019 and is currently actively building a Chinese team from scratch.

In the context of salary cuts in the financial industry and high employment pressure in various industries, the topic of "high salaries" has once again ignited public nerves. But a high salary of 4000 yuan per day is not a common phenomenon in the domestic quantitative private equity industry. The reporter learned that the daily salary of interns in quantitative private equity strategy research positions in China is mostly below 1000 yuan, which is still at a relatively high level compared to other industries.

Why is quantitative private equity recruiting interns at such high salaries? The underlying reason is that in recent years, the competition in the quantitative private equity industry has intensified, leading to an increased demand for high-end talents. But it is not easy to enter this high paying industry and continue to earn high salaries.

What is the actual situation of practitioners in the quantitative private equity industry? Let's take a look at First Financial's explanation.

Hiring with a daily salary of 4000 yuan in a "tycoon style"

The quantitative private equity industry has always been seen as a high paying industry, but the move of hiring interns with a daily salary of 4000 yuan still attracts market attention. According to the reporter's understanding, the publisher of this recruitment information is a foreign-funded quantitative company called Scientific Research Capital.

According to the official WeChat official account, the company plans to recruit interns for digital quantitative research and development and full-time employees for operation management, among which the "overbearing" treatment of interns attracts great attention.

Specifically, if based in New York, the salary and benefits of the quantified intern will be $10000 per month, plus $1600 per month for housing expenses; If the workplace is in Shanghai, the daily salary is 4000 yuan. In addition, doctoral candidates may receive higher salaries, with the requirement that the internship period last for 2 to 3 months, and applicants must graduate in 2024 or 2025.

If based in Shanghai, with an estimated 22 working days per month, the monthly salary of interns is as high as 88000 yuan, which is equivalent to an adult salary of over one million yuan. Even if most interns in China are calculated to be on duty at least three days a week, their monthly salary is nearly 50000 yuan.

According to data from the National Bureau of Statistics, the average annual wages of urban non private and private employees in 2022 were 114000 yuan and 65200 yuan, respectively. In other words, if you can successfully join the company, you can earn over 100000 yuan from a three-month internship, which is equivalent to the annual income of most people.

"The internship birthday salary is 4000 yuan, which is considered a high level even in the quantitative industry." A quantitative private equity researcher told First Financial that the reason why this company can offer such a high salary is mainly because its quantitative strategy belongs to the high-frequency strategy. Compared to low-frequency strategies, high-frequency strategies are more difficult to develop and more prone to failure, and the later operational difficulties will also be greater, so the requirements for job applicants will be higher.

For such a high paying internship position, SRC did not clearly specify the specific requirements for application in the recruitment notice. However, according to the company profile, all team members have professional backgrounds and qualifications in statistics, mathematics, physics, financial engineering, and computer science from top domestic and foreign universities, so the threshold for internships may not be too low.

"Behind high salaries is a high threshold." A private equity quantitative practitioner told reporters that the educational requirements for this type of position are basically undergraduate and above science and engineering students from Tsinghua and Peking University. On this basis, there are also multiple rounds of competition interviews, and some job interviews can even reach seven or eight rounds. For many fresh graduates, the screening of resumes is not enough.

From the perspective of SRC's recruitment process, candidates who have undergone resume screening must first undergo a coding test, which may take one day. In addition, after passing this round, there will be 2 to 3 rounds of telephone interviews. After successfully passing the level, an on-site interview will be conducted. It is worth noting that in addition to professional skills and other "hard" conditions, SRC also assesses whether candidates are culturally compatible with the team.

SRC stated that they are currently actively building a Chinese team from scratch, and young people who join the team in the next two years have the opportunity to become absolute core members. "There is also a certain possibility of gaining popularity through this method," said a fund industry insider, but the main goal is still to find suitable talents for the company.

SRC's official account also mentioned that the company was founded in 2019, and in July 2020, it has released recruitment content through WeChat official account, with positions involving quantitative researchers, traders, etc. Last August, it was revealed that it had received over 2000 resumes in the past year, and in the end, only 10 job offers were issued to quantitative researchers and quantitative development programmers, with an admission rate of less than 0.5%.

Public information shows that SRC currently manages $1.2 billion of its own funds, with low latency trading servers deployed in major exchange data centers around the world, and actively expanding into foreign exchange, options, and cryptocurrency markets. The daily trading volume exceeds $1 billion, and the actual Sharpe ratio is as high as 8 or above. In 2023, the company entered the Chinese market to trade five major futures and two major stock exchanges.

Super high salaries are not the norm

Is hiring interns for 4000 yuan per day a common practice in quantitative private equity? In fact, this is not a universal phenomenon.

"Generally, quantitative private equity companies with high salaries of 4000 yuan/day are mostly foreign-funded companies." The aforementioned quantitative private equity practitioners told reporters that the salaries of most interns in domestic quantitative private equity investment and research positions are not as high, but compared to most other industries, they are indeed at a middle to upper level.

"Our daily salary for quantitative interns is around 200 to 1200 yuan, and if they are particularly outstanding, they can be raised, mainly based on face-to-face interviews." A private equity fund insider in South China told reporters that quantitative trading researchers need to constantly mine valuable information in massive data, explore new models, and seek growth points in trading returns. For newcomers, there are certain challenges and high requirements for learning ability.

"Data mining ability and program development ability are two essential skills that quantitative private equity researchers must possess." This person said that the former includes understanding various models, experience in applying various models to actual data, and insight into finding potential rules from seemingly complex model results. At the same time, it is necessary to convert one's own model ideas into code in order to obtain model results, so a certain level of programming ability is also required.

The reporter also found through multiple recruitment platforms that the internship salary for quantitative private equity strategy research positions in China is generally below 1000 yuan, and the professional requirements for applicants are mostly related to science and engineering majors such as mathematics, statistics, financial engineering, computer science, and physics.

There are also some institutions that can offer higher salaries exceeding 1000 yuan per day. In addition to the above requirements, these companies also hope that applicants have good abilities in data processing, statistical modeling, and other aspects. Those who have won awards in national science competitions, published papers in top journals, obtained CFA or FRM qualifications, or have relevant experience will be given priority.

However, compared to earning 4000 yuan per day, the daily salary of 1000 yuan is still very attractive compared to other industries, although it is significantly lower.

When she heard the news that her internship birthday salary had reached 4000 yuan, Ms. Lai, who was about to graduate with a master's degree, was quite surprised. She said that because she has already obtained a retention opportunity, she will work full-time during the internship period. Even so, the monthly salary is only 3300 yuan, which is not as high as others' daily salary.

"I am currently interning at a listed real estate company with a daily salary of 150 yuan. Previously, interning at an insurance company would have been lower at only 100 yuan." Ms. Lai told reporters that based on her situation, interns' daily salary of 150 yuan is more common, with higher salaries around 400 yuan.

From the perspective of employers, "interns represent instability, even if they have agreed to graduate and officially start working, as long as there is no formal contract signed, the uncertainty factor is still relatively high. Therefore, due to careful consideration, interns' salaries are generally relatively low." A human resources representative from a listed company told reporters.

"The situation varies in each industry and company, and the salary offered by a billion dollar private equity firm will also be relatively higher. Some private equity quantitative companies have higher employment costs for fresh graduates, even higher than the salary of formal employees." According to a headhunter in the quantitative private equity industry, the salary is higher than many industries, and industry competition is naturally fierce. This year, a domestic 10 billion dollar quantitative private equity company recruited 10 interns for the position of quantitative strategy program development, but only one will be left in the end.

Zhang Xin, a graduate student majoring in finance at a top domestic university, also said that since last year, he has been interning at the quantitative strategy research and development positions of two quantitative private equity funds in China. The first internship paid 300 yuan/day, and the second internship paid 460 yuan/day.

According to him, the main focus of daily work is to develop strategies. Although there is no mandatory overtime requirement or clear performance evaluation, everyone knows that if they cannot develop profitable strategies for a long time, they will be discouraged, let alone able to stay after graduation. "According to the company's requirements, we can finish work at 5:30 pm, but nobody left until 8 pm," said Zhang Xin.

Why is it so generous to make a move

In recent years, the private equity industry has been accelerating its development. Faced with increasingly fierce industry competition and constantly changing markets, the industry's thirst for talent has gradually increased. The aforementioned private equity fund personnel said that talent is an important asset in this industry, and everyone wants to recruit better talents.

"We are also recruiting interns who we hope to keep, but it is not easy to find those with high requirements. In his view, managing large-scale private equity institutions requires a large number of strategic research and development personnel as support. In the context of intensified industry competition, it is not surprising to" invest heavily "in hiring high-quality talents.".

At the same time, the aforementioned headhunters also pointed out that various quantitative private equity companies have been competing for fresh graduates recently, mainly because the models of large companies are relatively mature and need to explore new profitable factors. Fresh graduates are not easy to have a fixed mindset and can do more meticulous work in very detailed aspects.

In fact, observing the changes in the industry in recent years, it can also be seen that while private equity firms are recruiting talents, their requirements for talent are gradually increasing. Taking the educational threshold as an example, in many recruitment information, "graduating from a prestigious university" is no longer just a "bonus point", but a "mandatory option".

Private equity practitioner Wang Lei is an undergraduate student majoring in finance from a non dual major university. When he graduated in 2017, he was in a stage of rapid development in the quantitative private equity industry. Although she did not have an advantage in academic qualifications, due to her love for mathematics, she successfully entered a billion dollar quantitative private equity company in China with a set of quantitative strategies with high returns developed by herself. But according to his observation, the interns and school admissions recruited by the company in recent years have all come from top universities in China.

Wang Lei stated that a few years ago, in the social recruitment of quantitative research positions in quantitative private equity companies, as long as applicants had a reasonable set of quantitative strategy logic or small-scale short-term actual performance, they could easily obtain entry tickets to the quantitative private equity industry. But nowadays, most companies require applicants to have more than six months of experience managing large-scale funds when recruiting. In addition, the performance ranking needs to reach the top 10% of the industry in order to be hired.

"Nowadays, the education level of prestigious universities is just a stepping stone. After truly entering the quantitative industry, if there is no profitable strategy developed, the risk of being discouraged by the company is also relatively high. After being discouraged, it will be difficult to change jobs in the same industry." Wang Lei said that in the second half of 2021, colleague Xu Hao's quantitative strategy failed, the investment return rate turned negative, and he voluntarily resigned after conflicts with his boss.

Three months after resigning, Xu Hao found a job in an investment research position at a quantitative private equity company. After working for five months at the company, he still had not developed a profitable strategy and was persuaded to quit before his probationary period had expired. Since then, Xu Hao has been searching for suitable job opportunities for quantitative private equity investment research positions. Almost all quantitative private equity companies in Shanghai and Shenzhen have conducted interviews, and most companies have informed him that they are not suitable after one or two rounds of interviews. Since November last year, Xu Hao's career window has been vacant for eight months, and no institution has extended an olive branch to him.

"In addition to the actual investment strategy, age is also a disadvantage for Xu Hao's job search. Many companies explicitly require him to be under the age of 35 in their recruitment information, and he is 34 years old this year." Wang Lei told reporters that after the age of 35, it will become even more difficult to find a job in a quantitative private equity investment research position.

"Because it is widely believed in the industry that people in their thirties tend to have fixed thinking and are not as innovative as young people in their twenties, this is also the main reason why many quantitative private equity interns and full-time employees have salaries that are inverted." Wang Lei further stated that new programming technologies and mathematical theories change rapidly, and with the intensification of industry competition, the application of new technologies and theories in quantitative strategies is becoming more timely. Compared to researchers who have been in the industry for many years, graduate students with master's and doctoral degrees have a better grasp of the cutting-edge scientific research achievements in academia.

On the other hand, since last year, after a large number of layoffs in Internet companies such as Twitter and Microsoft, programmers in the Internet industry have also entered the quantitative private placement industry. Compared with programmers in the quantitative private placement industry, programmers in the Internet industry have stronger business capabilities. Correspondingly, the demand for basic talents by enterprises has also decreased.

"High end talents are still scarce," a private equity founder told reporters. In the current industry downturn, he will actively adjust and slow down the pace, "ensuring survival first.". At the same time, Wang Lei also told reporters that his company had a total of 12 researchers in the quantitative stock group and quantitative futures group, but three of them have been gradually dismissed since the beginning of this year.

In recent years, the demand for high-quality talents in the quantitative private equity industry has become increasingly strong, and even heavy recruitment may be due to the decline in industry investment returns and the tightening of basic positions in some companies. Since last year, with interest rate hikes in the United States and a global economic downturn, trading volumes in various trading markets have decreased, and opportunities for quantitative private equity firms to make money through quantitative strategies have decreased. In addition, due to market fluctuations, multiple private equity funds are facing pressure of declining performance.

According to data from Private Equity Ranking Network, as of the end of June 2023, there are currently 113 private equity firms with a management scale of over 10 billion yuan. Among the 91 billion dollar private equity firms with recorded data, 24 have had negative returns since the beginning of this year, accounting for over a quarter. Among them, Shifeng Asset Management, Changdu Kaifeng Investment, Shenzhen Kaifeng Investment and other billion dollar private equity firms experienced a decline of over 10% in the first half of the year.

From a product perspective, out of the 1916 quantitative long private equity products with existing data, 348 products suffered investment losses, with cumulative negative returns since the beginning of the year, accounting for nearly 20%. Among them, 58 products such as Kewei Asset Quantitative Cooperation and Canonical Kano Quantitative Composite Strategy 2 experienced a decline of over 10% this year.