Witness changes in the finance industry: Interview Edith Mandel, Principal at Greenwich Street Advisors
Our next speaker we will be featuring in our speaker’s series is Edith Mandel, interviewed by Katelyn Schoenberger.
Edith is currently Principal at Greenwich Street Advisors and Adjunct Professor at NYU Tandon School of Engineering, where she teaches a course on fixed income quantitative trading. Previously, she held titles as Head of Quantitative Fixed Income Mid-Frequency Trading at KCG, Managing Director and Head of Quantitative Research and Systematic Rates Trading at Citadel, and Managing Director at Goldman Sachs.
When I first reached out to Edith regarding the interview, I was really excited to learn more about how she transitioned into the field and about all the facets of the industry I wasn’t aware of before. We’ve hosted Edith at several conferences at Princeton and she’s been an outstanding addition to our panels and speakers sessions. I reviewed her resume and Linkedin and I feel inspired by the caliber of work she’s accomplished in her life.
I spoke with her on March 12th over the phone and had the opportunity to get to know her better as an individual.
Background
Edith has been in the industry for over 20 years and has been working within the fixed income business. She started in 1996 at Goldman Sachs and at the time, the quantitative finance field was much smaller and it was not very well known. Initially, she wasn’t thinking about going into finance, but after the ‘Operations Research in Finance’ class she took at Columbia, that she discovered a new field that was so quantitative and interesting. This course she took while receiving her Master’s degree at Columbia got her to consider a career in the financial industry.
When she started at Goldman in Fixed Income research group, she was reading research papers and implementing models described in them. While looking back, there have been so many changes and the industry has become much more automated. Roles have evolved and now there’s so much more taking place. Edith’s involvement in the industry over the past 20 years has given her the chance to witness these changes as they occurred. She mentioned how nowadays a firm can really just have one person coming up with the trade idea, implementing code and back-testing the corresponding strategies. There are so many different products in trading and understanding how to model them is important, she says. Having a thorough understanding of models is important as they always have to be improved in order to keep up with the ongoing shifts in the market. She mentioned that when she started working at Citadel she was able to solve issues that had haunted her for years, because she was able to use the models for trading and move beyond theory. She also emphasized a lot on the importance of feedback: post-trade model performance analysis.
Industry
Edith is currently working as Principal at Greenwich Street Advisors, LLC, and is teaching a course at New York University. Right now she is teaching a course tailored to graduate students in Financial Engineering. Students ask her a lot about how to know what position you want to pursue. She said that the answer is very subjective. You need to be prepared to always learn new things. There are constant changes happening in the financial industry, such as the rise of big data, data science, and new financial products requiring new analytics.
Other advice she gave me about the rise of analytics and big data modelling is that is really depends on the part of the industry you’re looking to get into; quantitative modelling isn’t used the same exact way at every competitor. There are so many new students entering into the field who ask how to translate business problems into technical problems and they need to work with experienced colleagues in order to analyze and make sense of the results.
I then went on to ask her about her stance on artificial intelligence in the field and she mentioned a few examples of how it could be useful. Clustering analysis is used to identify macro regimes and also ‘hot spots’ in risk profiles. Algo traders using data science to analyze live trading patterns, and neural nets are used in loan-level prepayment modeling. Quants come up with different questions that people could be asking and utilize AI programs to track and map these questions over time. Quants and data scientists analyze problems that are doable and analyze data sets, as well as build predictive models, analyze big problems that need to be solved, and translate everything into technical terms.
The trading businesses rely a lot on analytics or else they cannot make money. However, quality of analytics has been poor traditionally outside of trading. Now all participants in the financial industry feel pressure to advance and build modern platforms for analytics. Using AI in signal research is not all that new. Client-facing businesses, commercial banks never felt that sort of need to advance technologically because they benefit from large franchises and client relationships. The peer pressure from other banks to grow their capabilities is a factor. Competitors always feel they have to keep up with one another.
Not all AI efforts have been successful. Edith mentioned that some Machine Learning teams hired out of Silicon Valley do not always work in a collaborative setting and do not possess a thorough understanding of the business. It isn’t just about understanding the technical side at a firm, collaboration must be emphasized on more. Many successful firms have a more collaborative culture. Collaboration between business experts and AI experts is a formula for success.
Other concepts she mentioned were signal development and data science, which are not all that new to the field either. Whether or not you have quality data plays a huge role. A problem cannot be solved without reliable, accurate data. Alpha research, machine learning research, and multivariate problems tend to be more reliable and they are applicable to the research space. None of this is completely new to the trading space, though.
Career Transitions
From her times at Goldman Sachs, Citadel, and KCG, ever since being enrolled in alternative trading businesses, business priorities change as the organization evolves. She says it could be frustrating because building a new quant trading business is a lot of work and when organizational priorities change, you have to adjust.
After her time at KCG, as a senior team lead, she figured she could advise clients looking to advance their analytics and/or quantitative trading. She says figuring out a strategic direction for analytics is a complicated business. Clients need to device if they are building in-house or working with vendors, and mistakes are very costly. She wanted to hold client’s hand, and give a company a head start on a new project. There are always complicated decisions to make, but she advises companies on their best course of action. She’s helping clients figure out how to improve analytics and build something more modern. She analyzes their business needs, builds prototypes, works with the in-house teams, and also brings in her firm’s developers for larger projects.
There are several big consulting firms out there, but she has a lot more experience than these places since she’s worked in the industry before. If she has the power to be successful with a project on her own, she runs it alone. She says it’s a very rewarding experience to be an agent of change, and she’s worked on projects that have been very successful.
What career advice would you give students entering the field?
I asked her about the culture at big banks and firms. What is it like to work at these companies? How important is cultural fit?
Cultural fit is very important. Quantitative finance is much more technical than other finance jobs and the people tend to have more technologically advanced insights on things and are more educated. Quality of work is more important than other factors. At Goldman, for example, they felt that it mattered to make the environment a lot more diverse so they made an effort to hire more women. Edith also mentioned that you should Interview the interviewer and examine the company as a whole really well. Also, do not take the first offer that comes your way; really evaluate what is a good potential fit and analyze the firm in entirety. If there’s not enough diversity, then that’s a red flag. The environment is changing now, and it’s not that difficult to find a firm with a good collaborative culture. Join a business where you can learn, since this is the best investment in your professional future.
Closing remarks
As we wrapped up our conversation, I asked her if she had any additional pieces of advice she would give students or any additional comments she wanted to add. I personally found it really helpful when she mentioned that you need to be working with people who can teach you. Don’t just work with isolated groups. Work with people who can help you and solve the problems alongside you. You must be constantly trying to figure out the technical skills you have to develop and work on them. You produce your best work when you can work with others.
More about Edith
After our phone conversation, I felt so much more motivated and empowered to pursue my passions. Edith expresses her work in the industry in so much detail and I learned so much in our phone call session!
To learn more about Edith, check out her Linkedin page at: https://www.linkedin.com/in/edith-mandel-4b591b10/
By Katelyn Schoenberger
