The new hottest PhDs at multi-strategy hedge funds
If you want to attract the attention of a top multi-strategy hedge fund now, it may help to have a PhD. Not a PhD in fluid mechanics like in the recent past, but a PhD in weather forecasting. Big hedge funds today love big meteorologists.
As the Financial Times reported yesterday, Citadel has assembled a team of at least 20 of weather scientists within its commodities trading business. In a world where both the weather and energy demand and supply are increasingly unpredictable, those weather scientists were critical to driving the fund's 38% returns last year. Joanna Welsh, Citadel's chief risk officer, says weather has become an important factor in Citadel's modelling of future scenarios: "We can see what might happen to supply and demand in commodities with a regular price shock, say, or with a price shock and a weather move, or with both and an infrastructure problem as well,” she told Risk Magazine in January.
If you're a meteorologist who wants to work for Citadel, where the average pay in London was $1.3m in 2020 (the last year for which figures are available), the good news is that you still have options. The hedge fund is currently looking for a PhD level weather expert to conduct "applied research into atmospheric predictability, data analysis and visualization, operational weather prediction and communication of weather signals." The resulting research will be used by the fund's natural gas, power and agricultural traders.
Only the most accomplished meteorologists need apply: Citadel specifies that applicants must have "superb educational attainment."
The meteorologists hedge funds hire
What sorts of backgrounds are popular? When Citadel built its weather team in 2018, there were (possibly apocryphal) stories of its recruiters touring the Met Office in Exeter, seeking to poach UK government weather scientists for vastly higher pay.
Citadel's weather team is run by UK-based Nicholas Klingaman, a former principal research fellow at the National Centre for Atmospheric Science in Reading. It's US weather lead is Heather M. Archambault, who joined from the National Oceanic and Atmospheric Administration in Princeton and who has a PhD from the University of Albany, where Citadel is understood to fish for much of its US meteorological talent.
Citadel isn't the only fund hitting-up meteorological talent. Balyasny has been there too. The fund hired Alexander Goldstein from Credit Suisse in March 2021 and Ann Shelly from Citadel (and previously the Met Office) in July 2022. Shelly, who lives in Cornwall and likes surfing, is a specialist in tropical weather.
One headhunter, who helps hedge funds hire meteorologists and other commodities professionals, says many funds are finding it necessary to be flexible on location. "A lot of meteorologists are outdoor junkies," he says. "They are earthy type people, and they want to be hybrid or remote."
With extreme weather events increasing, he says it's not just the big hedge funds that want meteorology PhDs. "A lot of the new hedge funds and commodities houses also want weather forecasting talent," he says. "There are huge profits to be made in areas like gas and power trading if you can predict a weather event before it happens."
How much will you earn as a PhD level meteorologist in a fund? Ross Gregory, senior partner and head of commodities at New York-City based Proco Commodities, says pay is on a par with that for senior analysts in hedge funds who work closely with portfolio managers. "You're probably looking at a $200k salary and three or four times that in bonus, depending upon performance."
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