Why Your Quant Team Structure Is Costing You Senior Hires
Most systematic funds design their quantitative teams around research output efficiency — not talent pipeline development. The structural consequences show up in recruiting conversations, retention rates, and the kind of candidates who accept offers versus those who don't.
The Design Problem
When a systematic fund designs its quantitative team structure, it is usually optimising for research throughput and risk-adjusted returns. That's appropriate. But the same design choices that make a team efficient at producing research often make it structurally unattractive to exactly the senior candidates the fund wants to hire.
The result is a recruiting dynamic that fund managers find frustrating: the candidates who accept offers are often not the ones they most wanted, and the candidates they most wanted decline. The explanation for this pattern is rarely compensation — it is usually structural.
How the Structure Repels Senior Talent
The most common structural issue is the absence of a clear progression from research contributor to portfolio decision-maker. Many funds have a research team and a trading team, and the boundary between them is either fixed or opaque. Quantitative researchers produce signals. Portfolio managers or traders deploy capital. The handoff is efficient from a process perspective and toxic from a talent perspective.
Senior candidates evaluating this structure face an obvious question: if I join as a researcher, how and when do I reach the position where I have capital authority and direct accountability for performance? If the honest answer is "that's not a path we've defined," the candidate who has other options — who can join a fund where that path exists — will take the other option.
The second structural issue is decision-making opacity. Quantitative research teams that operate with unclear decision rights — where it is not obvious who has the authority to pursue a new strategy direction, hire junior researchers, or recommend changes to risk parameters — attract candidates who are comfortable with ambiguity and repel candidates who want to understand clearly what they are building toward. The latter group tends to include the candidates who are most in demand.
The Retention Consequence
The structural design problem doesn't only affect hiring — it shapes who stays. Researchers who join without a clear PM track will eventually look for one elsewhere, typically after three to five years when they have produced demonstrable output and want to convert it into portfolio authority. Funds that have not built that track lose these researchers at exactly the point when they are most valuable: senior, productive, and platform-knowledgeable.
This is an expensive loss that rarely shows up in any budget line as a structural cost. It appears as a search fee, a new hire ramp time, and an implicit gap in institutional knowledge — but not as a consequence of a deliberate team design choice that could be revisited.
What a Better Structure Looks Like
The funds that consistently attract and retain senior quant talent tend to share a few structural features.
An explicit PM track with defined criteria. Not a vague promise of eventual progression, but specific thresholds — a strategy passes a defined out-of-sample evaluation, reaches a certain Sharpe ratio over a defined period, demonstrates certain portfolio construction characteristics — after which a researcher moves into a defined PM role with explicit capital authority. Candidates can evaluate this concretely. It demonstrates that the fund is serious about developing talent, not just consuming it.
Capital authority earlier in the career. Funds that extend real but bounded capital authority to promising researchers — a small but genuine allocation where the researcher is the decision-maker — develop PM-quality judgment far faster than funds that maintain the research-trading split until a researcher has proven themselves in a role they have never been given. This is a risk management decision as well as a talent strategy: allocating a small amount to a promising researcher carries manageable downside and produces valuable information about their decision-making.
Clarity about what the firm actually offers. The funds that hire most effectively are specific in conversations with candidates about what they are joining: the strategy scope, the infrastructure, the team structure, the decision rights, the evaluation timeline. Funds that are vague because they haven't defined these things — or because they have defined them and worry that the answer isn't attractive — will lose candidates who have enough options to insist on clarity.
A Practical Starting Point
The most useful exercise for fund managers who suspect their structure is creating hiring friction is to ask a senior candidate who recently declined an offer what drove their decision. The answers are usually specific, actionable, and structurally revealing in ways that no amount of internal discussion produces.
Bayes Group advises systematic funds on talent strategy, team architecture, and senior hiring across the US, APAC, Gulf, and Europe. Get in touch to discuss your situation.
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