Feb 6, 2020
FEC Alum talks: Madhur Bhattad about his journey to the Global Quant Industry
FEC Alum talks is a “podcast in-text” where interviews with IITG alumni are recorded and the content is shared in the blog. They mainly focus on the lives of alumni in who’s life finance and economics play a major role.
Sudhanshu: Hello Madhur bhaiya! You’re one of the founding members of the Finance and Economics Club, IIT Guwahati. It’s a pleasure having you on call. It’ll be great if you could briefly introduce yourself to our readers.
Madhur: Hi, my name is Madhur Bhattad. I graduated from IIT Guwahati bachelors in mathematics and computing in 2017. I did masters in quantitative finance from NYU Courant following that. Post graduating from NYU, I joined PIMCO as a portfolio associate for their global macro hedge fund complex.
S: Wow, that’s an interesting journey, now let’s come back to when you were a student, when and how did you develop an interest in finance?
M: I was quite lucky to have discovered my interests quite early and I was almost certain that I wanted to make a career in the finance industry. One of my seniors, Raghav Mittal who was in his fourth year then started the Finance and Economics Club. I was one of the founding members of the club. I had various ideas and themes that I looked forward to develope on during my journey as a team member.
One of my idea was that FEC needs to diversify its activities and get exposure to different aspects of the finance industry. Learning high-level functioning at both buy-side and sell-side while networking back then was critical in furthering my interest. I had given a couple of talks on quantitative and algorithmic trading, sharing my internship and learning experiences at the club back then. We also did some kind of valuation and stock selection competition. A finance module was also added to Kriti so that people could start becoming aware of pitching a stock, pitching a portfolio and doing algorithmic trading. Looking back at the events, discussions and information interviews done back then helped me a great deal.
S: A lot has changed since you left both on campus and the club. How have your learnings at campus helped you in the industry?
M: There are two aspects to this — the academics that you learn and the interpersonal skills that you develop during your college years. For me personally, the second aspect is as important, if not more to the first aspect. The interpersonal skills that you develop will help you throughout life.
As for the academics part, I would say that mathematics and computing curriculum covered diverse theoretical aspects that helped me not only with learning about financial modelling but also to appreciate the nuances. That said, it often felt too densely packed that it became difficult to concentrate on everything. So learning about prioritization and time management was crucial. Looking back it was great that I had concentrated on the mathematical details such as numerical linear algebra and stochastic modelling, as well as learn about financial instruments, rather than focusing just on programming.
S: Students are often confused about the options after the campus. What are the options available after BTech?
M: During my time, we did not have any on-campus opportunity in quantitative finance or the investing industry. A few banking companies that came at the campus were looking for software development talent. One thing that has helped me a lot in networking. Especially learning about things from informational interviews.
You can reach out to alumni network who are in the industry asking them for informational interviews. This is a great way to learn more about their works and make a conscious choice if that is the kind of work you would want to be doing. If yes, you also get to learn about how should you be pursuing a job search. One mistake that I have seen people make is directly asking for a job. I feel that is a wrong way to approach a career. Also, it is extremely unlikely for a person to be directly knowing of an opening unless it’s on their own group. But it is much more likely of them knowing a person that you may want to talk to.
I personally think that the work that you do matters much more than the brand-name of the company you work for.
S: What are the options available for studies in the field of finance after under graduation?
M: One could always go for a job. One can also go for a Masters or do a PhD in quantitative finance. One can also go for MBA. I would personally suggest to not opt for MBA immediately. Rather know why you want to do an MBA before proceeding with it. You can only do that after working in the industry.
S: How important is a Masters or MBA to pursue a career in finance?
M: A very tough question to answer indeed! This is a very subjective topic. Some people could do just okay without an advanced degree.
For me personally it was a good learning curve. Given the competitiveness in the industry, for some marketability associated with it could be a valid reason too.
S: Please tell us about your professional journey.
M: I always found buy-side investment management fascinating. I, fortunately, got opportunities to work first at Guggenheim Investment Management as a quant risk intern and then at PIMCO as a portfolio associate. During my work at Guggenheim, I got to work on modelling projects for collateralized loan obligations. I also got exposure on risk attribution and buy-side risk management process. My current work involves working with portfolio managers on optimal trade sizing, tactical portfolio allocation and other trading book management process. I also do some quantitative research to help with an investment thesis and running trades.
S: Any thoughts about special certifications?
M: Popular ones are CFA, FRM, CQF. Six sigma certification didn’t help me much. CFA I think is helpful especially if one learns the concepts thoroughly rather than just learn it to get through on a test.
S: How was your studying experience at NYU?
M: Life at NYU was quite different. At IIT, not a lot of students were into finance but here everybody in my class had their priority to go in finance. One had to work hard to stand out from the crowd. At the same time, this increased learning from peers. Academics were a bit dense that at IIT. There was a lot of learning through academic projects too.
S: How do you think is quant analysis affecting stock pricing funds?
M: I think quant investing is increasing scope for both active and passive investment. There is a rise of smart beta type products too.
Some people think this forces the Efficient Market Hypothesis and markets will become more and more efficient over time. My view on this is slightly different. I think that there might be chances of factor crowding because of this too. I think there are just more and more attempts towards quantamental type of approach too.
S: How is ML and AI affecting the finance industry?
M: ML and AI are great tools for automation. The standard techniques that people use in finance are pretty close to ML anyways. I would say having data skills are essential in an environment where data volume is consistently increasing. I would say though that complete black box approaches might not work in finance though. Interpretability, or simply speaking, knowing what you are doing is critical.
What do you think is the future of the finance industry and how different is the scenario in America and in India?
I don’t think it makes sense predicting the future of the industry as a whole. Some things that might occur is increased job shifting to India given the supply of quantitative oriented people in India. These days it appears a lot of new fintech businesses being built too. That might be a trend that lasts. With more people participating in markets, I guess Indian market might see more domestic companies too.
Sudhanshu: Those are great insights from you bhaiya, It was a pleasure talking to you. Thank you!
Madhur: Thanks Sudhanshu! It was lovely talking to you, Hope this session helped.
Interviewed by Sudhanshu Bhatia
Edited by Jaikishan Mansukhani
