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You can still see in that industry the skillset change.
1970’s - some even no college made it. Still some truly smart people 2000’s - Big Ten Schools and above 2020’s - what was your placement on the IMO
Another way to look at it - 1970’s the best local talent in Chicago or NYC who just wandered into trading. 2000’s The best in recruited from the top schools in the region. 2020’s the best recruited Internationally. So yes it’s much harder today. Finance in general has gotten much more selective. PE is likely very similar.
Ownership seats are also basically non-existent now in PE or trading. If you started in PE in the 1980’s you have your name on the door. If you started post 2010 you work for a listed PE firm and only get a split of the fees. Which is a lot of money.
Tell me about it. Biggest BS ever: even very very good people often don't make it beyond being desk head where the partners siphon off their share. Even the places that say "share of the profits if you come to us!" usually don't offer you more than 2-3% of the returns (before tax, mind you) which you generate for them and you still have to deal with a lot of bureaucracy of the stuff above the pod structure (and pay for it of course). Starting up your own place is also now becoming effectively impossible unless you have mid double digit millions lying around because of all the rules and regulations and partnerships you need.
The money is very very good regardless but there's a difference between having real autonomy vs being a cog in the machine, which is what a lot of modern trading is becoming (remember, the models etc. you develop don't belong to you, they're company property so you can't just up and take them to a competitor firm without getting sued, and nobody (other than the aforementioned pod shops above with their own issues) is hiring you unless you agree that ownership of models isn't yours.
Above desk head it was always internal politics. It’s the same in every part of finance, in tech, etc. Some people don’t realize there were plenty of ultra-smart people in the 80s and 90s who also capped out far below the top because they couldn’t play the game. The ones whose names you know today are the survivors. A lot of the real autists with zero social skills who made it to mega billionaire status (Hohn, Rokos, the Two Sigma guys or one of them at least) were helped along because people who had those skills adopted them and essentially exploited them to get rich themselves.
Even in the quant space that means that smart people who seem to have the ability to handle clients, participate in sales (even if only as ‘the smart guy’) and play that role are most likely to make it to the top. It’s the same in every field. If you’re a really smart procedural lawyer who is kind of autistic you will often never make partner because the existing partnership knows you’re (a) unlikely to leave [autists hate change] and (b) probably can’t bullshit your way through the marketing exercise that is every non-technical part of an interview. Outside of the largest partnerships and public corporations where dilution is negligible an equity stake is often far more about being pushy than anything else.
I also think that like @Opt-out says the field is just too saturated with mathematically / spatially super smart IMO winners, who themselves can do a lot more with AI now than they could a few years ago in terms of speeding up implementation / backtesting / whatever. 40 years ago a lot of the white / Jewish top math grads aspired to a career in academia, the younger generation is more diverse and more financially motivated. The rest go to SpaceX. Meanwhile the dumb as bricks bond salespeople I know who would struggle to precisely define carry and roll or how the post libor forward rates curve is computed in a non wishy washy way, or the commodities guys whose market color consists of calling up their clients whenever some OSINT Twitter with a million followers posts a new satellite picture of a missile attack, somehow seem to continue to make tons of money.
Moving up internally is the same as always. It’s the specific ownership seats that are non-existent. You can still be Lloyd Blankenfien CEO of Goldman Sachs but you can’t be a K, K, or R in KKR. Because things have become institutionalized, scaled, and moated. Pure trading the last time you had a path like that was probably early 2000’s and then when banking got banned from prop trading it opened up a big path to scale as big competitors left the market. That window is likely dead now.
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Yeah but like I'm sure there's a relatively niche employment spot right now that will turn out to be the big hindsight winner circa 20 years from now. AI researcher was a skilled profession 15 years ago but you weren't paid Lebron James money for the bleeding edge and there's now way more of a glitch of people entering the field.
But yeah there's a reason there's a meme with talking to 50 year olds in elite jobs now and getting 'I started my career at 27 after spending 3 years backpacking and getting turned onto this field by a newspaper ad after junior college' versus the new graduates being the absolute bleeding edge of filtering.
Hell my dad managed to get to a very senior offshore oil platform design electrical engineering position with 2 years before dropping out of a third-tier undergrad and a trade electrician cert. These things happen when you're born in 1949 and get in early on a field that ends up exploding in relevance
Lmao, AI research was an extremely niche profession 15 years ago. AlexNet came out in 2012 and pioneered deep learning which lead to transformers/LLMs. The only people who were AI researchers were college professors and the occasional industry researcher. You had a number of folks doing data science/ML engineering but it was pretty much just a sub-domain of statistics as thats what boosting/SVMs/Random Forests are.
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The only person I can think of who just lucked into their position without heavy filtering today feels like JD Vance. Sure he got into Yale Law, but he sort of just wrote a book that was ok professionally. Then met a billionaire who turned him into the VP. US politics might be the only place I can think of where some of it just feels lucky.
There are still tons of people who get lucky. There are random people in PR or marketing at nvidia worth millions. I know a lot of midwit at best people who coasted around non-technical startup jobs (copywriting, project management, marketing, social) who ended up at companies like Coinbase and Revolut who are either rich or going to be. There are always new businesses blowing up.
Similarly in American politics, the most common route is still elite upper middle class childhood - HYPS undergrad - HYS law - clerkship - DC. There are exceptions in every field. Even in quant finance there are a handful of people every year who get recruited out of nowhere because despite no real credentials they contribute enough useful research. I’ve met one, a Balkan immigrant with little formal education.
I think people just see this through the lens of hindsight. There were tons of people in the 70s who did the ‘smart thing’, went to a top college, got a grad job (‘management trainee position’) at IBM or PanAm, and never made fortunes.
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US Politics you're gonna be way more aware of people who end up in the top jobs. There's still plenty of right time, right place hugely-successful people but the traditional UMC path has become exponentially more arduous as a result of striver optimization.
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