Chinese Funds Trounce Wall Street Pay, Offer $300,000 To Graduates

Chinese Funds Trounce Wall Street Pay, Offer $300,000 To Graduates

With bank after bank rushing to hike its entry-level wages to incoming analysts and associates, Wall Street suddenly finds itself facing a much more aggressive competitor: China.

Take the case of Peking University graduate Garen Zhou, who deferred his studies in the U.S. because of the pandemic, and instead applied for internships at China’s biggest internet companies. In the end, Bloomberg reports, the computing major chose Ubiquant, a local hedge fund managing $8 billion of assets which is offering top college leavers like Ph.D.s annual salaries of as much as $300,000. After a year, Zhou became a permanent employee, giving up his enrollment at Johns Hopkins University.

“The benefits of staying in this job far outweigh those of studying in the U.S. both in terms of knowledge and financial return,” said 23-year-old Zhou.

One doesn’t have to be a PhD to garner the highest wage – for elite undergrads in artificial intelligence and computer science, Chinese funds like Ubiquant offer triple the $100,000 entry price for freshly-minted college graduates on Wall Street, “illustrating a shift in global financial hiring driven by the pandemic and rising emerging market wealth.” As a result, Bloomberg notes that rather than aspire to an education in the U.S. that often leads to opportunities at global companies or even staying in America, some of the nation’s best and brightest are choosing to stay home. And once US grads learn that potential Chinese employers offer as much as 3x more than they could make in the US, they will rush to apply too.

That said, it’s unclear just how much longer these stellar offers will  last: graduates are in particular demand at quant funds which use computer models to trade, which have been lifted by inflows from rich individuals in the world’s second-biggest economy. Assets at such funds in China have jumped tenfold compared with four years ago to exceed 1 trillion yuan ($155 billion), according to Citic Securities Co. estimates. Of course, now that China is actively hammering its stocks as it pursues a “profound revolution“, the upside for investors may be severely limited, which in turn will also limit how much funds can spend on new hires.

For now, however, the spice flows, and as quant funds seek the best and the brightest, they are also competing for hires with internet titans from TikTok owner ByteDance to Alibaba and global hedge funds including Bridgewater and Citadel. The battle for talent even transcends business as China and the U.S. make technological superiority important national objectives, channeling increasing amount of support toward research and innovation, as well as data security.

“It’s very important for us to identify talent early on, because once they go abroad to study, they’ll have more options and we’ll have to compete with global companies,” said Wang Chen, 39, founder of Beijing-based Ubiquant. “Their willingness to join has increased quite a lot compared with a few years ago.”

Offering much higher wages than Wall Street certainly helps. While for many local students, seeking an elite education abroad is a well trodden path with the number of Chinese students pursuing computer science degrees in the U.S. steadily rising in the past decade, but now with more students deferring their studies as the global pandemic restricts travel, companies like Ubiquant have adjusted their hiring strategy by offering one-year internships.

No surprise, that tactic is working. Ubiquant has seen an influx of talent, and not just because of the stellar pay but because China’s humbled tech industry is grappling with regulatory change. Applications have jumped six times this year to more than 300 compared with when the company was founded.

Other Chinese hedge funds have also aggressively ramped up their hiring: Zhejiang High-Flyer Asset Management is also capitalizing on the changing priorities of graduates. The country’s largest quant fund managing more than $10 billion hired about 10 researchers over the past year, many of whom gave up overseas studies amid the pandemic, according to Chief Executive Officer Simon Lu. Shanghai Minghong Investment Co., which manages $8.5 billion in China, hired more than 10 experts in artificial intelligence and natural language processing in recent years, according to founder Qiu Huiming.

Lingjun Investment, which manages about $7.7 billion, plans to expand its investment and research team by as much as a third to 140 people by the end of the year, the firm said. It plans to boost spending in the area, including salaries, to about 1 billion yuan in the 15 months through March next year, up from an annual average of between 200 million yuan and 300 million yuan in the past three years.

Of course, getting the high-paying job is not easy: stationed near China’s prestigious Tsinghua University, Ubiquant tests people on everything from coding to statistics and examines their academic research papers, hiring about 10 fresh graduates last year. Wang says he has offered more experienced hires salaries of $1 million a year. The company also gives extra incentives to top staff like one-time bonuses of 10 million yuan or profit sharing from breakout trading strategies, as he gets more comfortable poaching talent from global corporations.

“If we think someone is worth hiring, we will try to hire them, sparing no efforts,” said Wang.

At Ubiquant’s headquarters, Zhou and his colleague Nathan Lin, who both joined last year, focused on studying natural language processing and the firm’s existing research for the first four months of their internships.

“I like the fact that your code and work speaks for itself,” instead of having to socialize and meet clients, said 22-year-old Lin, adding that this combined with the better salary offer from Ubiquant was the reason he joined the company instead of ByteDance or a job in banking. 

For the successful few, there are other perks, such as a remarkable work pace. Starting at 10 a.m. every day, they work for an hour and a half before heading for a lunch break and getting a quick nap at their desks. They resume at 1 p.m., writing codes and brainstorming strategies till about 7 p.m. or 9 p.m. before hitting the gym. Often they’ll play ping pong in the office with other colleagues.

“Working here matches the spirit of being a self-branded geek,” said Zhou. “As long I’m still learning, I’ll be staying on.”

Of course, the (shockingly) higher wages are in line with a broader global trend that goes beyond hedge funds, as business at financial firms is booming. In recent months, entry-level salaries at top investment banks have quickly shot up into six figures, even before bonuses, as executives responded to a rebellion against the demands of Wall Street life as an entire woke generation simply refuses to work hard after 7pm. And terrified of appearing unwoke to the liberal press, their managers have grudgingly rushed to hike wages.  One wonders if now that China’s wages are public, will the US rush to match these two over fears of appearing stingy when compared to their communist peers.

Tyler Durden
Sat, 09/04/2021 – 21:00

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