Leigh Drogen, the founder of crowdsourced financial analysis platform Estimize, started organising quant training for discretionary traders when he heard about portfolio managers going to night classes to learn data science.
"And by the way, that was not data science for finance classes," says Drogen, "that was just like data science for whatever – because there is no data science for finance class out there."
To rectify this, Estimize began its Learn to Quant (L2Q) training sessions in association with Jefferies, the investment bank.
It has been a runaway success, with an annual programme taking place in London, New York and Hong Kong, and the 2018 schedule to include Boston and San Francisco among other cities.
The whole asset management industry is moving in the direction of being more systematic, being more quantitative and using new unique data. Drogen clearly understands that a lot of firms are struggling in many ways to get their heads around that. He said that people have even approached him saying that they don't believe they will have a job in two years if they don't learn how to do this.
The content of the course has been carefully designed specifically for discretionary managers who want to learn the basics of the quantitative research process. Drogen set out some of the issues to be addressed:
"How do I build a more systematic process to evaluate things; how do I get the most out of my analyst in a structured way; how do I set my firm up so that I can do quantitative research and feed that into a discretionary trading process; how do I analyse new unique datasets; how do I become more factor aware? So it's really meant for those people, to answer those types of questions," he said.
Having designed and created the L2Q programme as a rudimentary introduction for discretionary managers, Estimize found that about 20% of people signing up for the course were the quants that the discretionary guys had hired.
To cater to the different levels of attendees, Estimize introduced two tracks at its London event. Drogen formulated a session focusing on the quants and integrating their work into the PM's book.
"Part of the conference is about how you help your firm build a process so the work you're doing can actually be integrated into the PM's book, because that's a really tough thing that they are all going through right now.
"So we actually did two tracks in the morning; the basic track, and then for the quants, we did a second track for more advanced topics that they got a lot out of.
"I feel that worked incredibly well, and we will probably continue that where we think we are going to get at least 20% of the room that are the actual quants doing the analysis, versus the discretionary PMs, analysts and COOs and so on."
The training day lasts from 9 to 5 and comprises five sessions, each roughly an hour in length. These have included lectures from the likes of WorldQuant, experts from independent research shops like Yin Luo at Wolfe, as well as quantitative analysts from MSCI.
"Firms like that that can teach the individual modules of factor modelling, data science and quant research; for example, how do you work with vendors; how do you know if a dataset is legitimate; how do you integrate it?
"I think it's a valuable thing for the discretionary PMs, analysts, COOs, capital allocators. We make sure that they know this is going to be a relatively rudimentary thing: it's the basics, but it's incredibly important," said Drogen.
Leigh Drogen will be talking at the L2Q "Introduction to Quantitative Analysis for Discretionary Managers" session at Newsweek's AI and Data Science in Capital Markets conference on December 6-7 in New York.