Largest Quant Firms List (Ranked)

In this discussion, we'll explore the landscape of quant firms, delve into their compensation structures, and highlight some of the key players across various tiers within each category.

Quant finance is composed of several types of firms, each with unique objectives, cultures, and compensation models. Broadly speaking, these firms can be categorized into "Active" managers, who seek to generate excess returns (alpha), and "Passive" managers, who generally aim to track market indices. Some firms operate in a middle ground between these two extremes. Additionally, some firms are proprietary trading firms, meaning that they trade their own money. This term can be used to describe both High-Frequency-Trading firms and hedge funds (some hedge funds trade an owner's, or their employee's money, as opposed to institutional clients').

Firm Categories:

1. High-Frequency Trading Firms (HFTs):
These firms specialize in executing trades at lightning-fast speeds, often holding positions for mere seconds or even less. To operate at these speeds, HFTs rely heavily on cutting-edge technology and advanced coding, with a particular emphasis on languages like C++. While HFTs often achieve high Sharpe ratios, their capacity for managing large sums is limited. Recently, some prominent HFTs have branched out into medium-frequency strategies, traditionally the realm of hedge funds. HFT firms generally desire folks with strong CS backgrounds, as well as strong math aptitude. To learn how to develop these skills, learn more about Quant Blueprint's bootcamp and schedule a call with a Quant here.

• Tier 1:
  • Virtu Financial
  • Jump Trading
  • Hudson River Trading
  • DRW Trading
  • XTX Markets
  • Tower Research Capital
  • Jane Street
• Tier 2:
  • QuantLab
  • IMC Trading
  • Headlands Technologies
  • Flow Traders
  • HAP Capital
  • Two Sigma Securities (note this is distinct from Two Sigma the Hedge Fund, as described below)

2. Proprietary Trading Firms:
Proprietary trading firms, often referred to as "prop" firms, generally hold positions for short durations, ranging from intraday to daily. These firms frequently overlap with HFTs, particularly in market-making activities (which is why you'll see many familiar names from above here as well!). Compensation is performance-driven, with traders earning a share of the profits they generate. While compensation is 'performance-driven' at practically all of these firms, the level of attribution differs. The below-listed proprietary trading firms are known for having some of the highest compensation structures of any firms on this list. 

• Tier 1: Compensation up to $600K for a first year quant!
  • Citadel Securities
  • Optiver
  • SIG (Susquehanna International Group)
  • Akuna Capital
  • Five Rings Capital
  • Jane Street
  • Hudson River Trading
  • Tower Research
• Tier 2:
  • Old Mission Capital
  • TransMarket Group
  • Flow Traders
  • Volant Trading

3. Hedge Funds:
Hedge funds are investment vehicles that manage portfolios designed to achieve positive returns in varying market conditions. Hedge funds can be further divided into three main types:

• a. Multi-Manager Hedge Funds ("Pod" or "Platform" Funds):
  These funds are structured as multiple independent teams, or "pods," each managing its own capital. Compensation is closely tied to the profits generated by each pod, fostering a competitive and secretive environment.
  • Tier 1:
    • Point72 (Cubist)
    • Citadel
    • Millennium Management
    • Balyasny Asset Management
    • ExodusPoint Capital
    • WorldQuant
  • Tier 2:
    • Schonfeld Strategic Advisors
    • Verition Fund Management
    • GSA Capital
    • Engineers Gate
    • Centiva Capital
• b. Centralized Hedge Funds ("Collaborative"):
  Unlike multi-manager funds, centralized hedge funds operate with a single, cohesive team, where collaboration is key. Compensation is linked to both individual contributions and the overall performance of the fund.
  • Tier 1:
    • DE Shaw
    • Two Sigma
    • PDT Partners
    • Renaissance Technologies (RenTec)
    • AQR Capital Management
    • Bridgewater Associates
  • Tier 2:
    • TGS Management
    • G-Research
    • Squarepoint Capital
    • Voleon Group
    • Aquatic Capital Management
    • Man Group
• c. Fundamental Hedge Funds:
  Traditionally focused on non-quantitative, fundamental analysis, these funds are increasingly incorporating quantitative strategies. Roles may involve running pure quant strategies, supporting fundamental portfolio managers with risk management, or a hybrid of both.
  • Tier 1:
    • Marshall Wace
    • Coatue Management
    • Maverick Capital
    • Third Point
    • Lone Pine Capital
    • Viking Global Investors

4. Other Hedge Funds:
These are hedge funds that don't neatly fit into the traditional categories, either because they are undergoing significant changes or because their strategies are a blend of different approaches.

• Tier 1:
  • Brevan Howard
  • Laurion Capital
  • Quadrature Capital
  • Teza Technologies
  • Highbridge Capital Management
  • Qube Research & Technologies

5. Alternative Asset Managers:
Alternative asset managers offer a range of products, including ETFs, long-short hedge funds, and mutual funds. While they still pursue innovative investment ideas, there is often a greater focus on marketing and client relations. Compensation typically includes a base salary and a discretionary bonus, with career progression involving moving up the corporate ladder to partner level.

• Tier 1:
  • BlackRock
  • Bridgewater Associates
  • AQR Capital Management
  • Winton Group
  • PanAgora Asset Management
  • AllianceBernstein
  • MAN Numeric

6. Passive Asset Managers:
These firms concentrate on providing long-only ETFs or mutual funds that track market indices. They offer better work-life balance and more stable compensation structures, with less emphasis on performance-based bonuses.

• Tier 1:
  • PIMCO
  • Vanguard
  • Fidelity Investments
  • Charles Schwab
• Tier 2:
  • State Street Global Advisors
  • Invesco
  • BlackRock (Passive Division)
  • Northern Trust Asset Management

7. Banks:
Banks have investment divisions that span a wide range of activities, from active management to passive strategies. In addition to these divisions, banks employ quants on the sell side to support internal sales and trading teams by developing new products and managing risk.

• Tier 2:
  • JPMorgan Chase
  • Goldman Sachs
  • Morgan Stanley
  • Bank of America
  • Citi
  • Deutsche Bank
  • Barclays
  • UBS
  • Credit Suisse
• Tier 2:
  • HSBC
  • BNP Paribas
  • Nomura
  • Societe Generale
  • Wells Fargo

Work Culture and Compensation:

Work culture and compensation vary widely among these firms. Active managers, such as HFTs, prop firms, and hedge funds, typically operate in high-pressure environments with long hours. Compensation is heavily tied to performance, with significant portions of earnings based on the profits generated. Underperformance often leads to job loss, reinforcing a meritocratic environment where success is meticulously tracked.

Conversely, passive managers, especially in asset management, provide better work-life balance with more stable, salary-based compensation. The emphasis here is on career development, promotions, and team management rather than maximizing returns.

Quant Blueprint runs the World's #1 Quant Finance Career Program. If you want to learn about the program (and get a decision within 48 hours), schedule a call with one of Quant Blueprint's senior Quants here.

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