- D.E. Shaw has a history of unconventional hires who do not necessarily have a background in finance.
- The hedge fund typically hires up to 90 interns a year, and many convert to full-time employees.
- Jeremy Reff, D.E. Shaw’s recruiting head, took us inside the firm’s process for finding talent.
“I don’t know.”
You might think that’s an answer you would best avoid in a job interview. At quant hedge fund giant D.E. Shaw, however, it could be interpreted as a sign of intellect.
Interested in whether there were any statistically recurring phrases that were useful in identifying successful interviews, the firm found those three words to be telling.
“We’re a firm of lifelong learners, ” Jeremy Reff, D.E. Shaw’s head of recruitment, told Insider. “There are very smart people here. And being both very smart and capable of saying, ‘I don’t know that thing,’ is, I think, very core to our culture.”
“So we’re looking for people who are both excellent at what they do and intellectually humble, not for someone to tell us everything they know in one 30-minute video call.”
The D.E. Shaw Group is one of the highest-grossing, and most secretive, hedge funds on Wall Street, with $60 billion under management. A quant pioneer, the firm has also been growing in the private markets space, having raised more than $450 million for its first dedicated private equity fund.
Launched by former Columbia University computer-science professor David Shaw above a small left-wing bookshop in lower Manhattan in 1988, D.E. Shaw is known for leaning more toward nerdy folks than the traditional Wall Street type.
Reff told Insider that the firm has a history of unconventional hires who do not necessarily have a background in math or finance. One of its more famous alums is Amazon founder Jeff Bezos, who came up with the idea for the everything store while working for the firm in the early 1990s.
Its key talent pipeline is its internship programs, which offer from 15 to 20 different types of roles, including a generalist program that places graduates in strategy and operation teams throughout the company, trading and investing programs, and software developer ones. D.E. Shaw’s application process is on ongoing basis, and competition is steep.
Most years, D.E. Shaw takes on only 75 to 90 summer interns. But snagging a spot could mean a full-time gig at the elite fund as the majority of its entry-level hiring is from its intern class. The firm employs more than 2,000 people in offices across North America, Europe, and Asia.
The pay at the internships is also very competitive. According to online job postings, D.E. Shaw’s generalist program offers a monthly base salary range of $9,000, while its summer quantitative analyst one for those pursuing a Ph.D. offers a $20,000 monthly base. The majority of the internships are NYC-based, at its Midtown headquarters, but some are sprinkled in other locations such as Denver and Shanghai.
To see who makes it into this quirky quant club, Insider spoke to Reff, to bring readers inside the process.
Why D.E. Shaw looks for “general excellence” over a specific archetype
D.E. Shaw takes a broad approach to find intern talent, looking beyond investment clubs at a narrow set of target universities or math wizzes graduating from Massachusetts Institute of Technology and Caltech.
The firm focuses on “people who can be great,” who they identify through “measures of excellence,” Reff told Insider. Whether they’ve clerked for a federal judge, researched something highly specific, or medaled in math Olympiads. Reff added that the firm has found great technical talent at flagship public universities.
Its 2022 intern class included 12 published authors, 8 debaters, 16 athletes, 7 musicians, and 5 International Mathematical Olympiad medalists, and represented over 40 schools from across the world and over 30 areas of study.
“Over 30-plus years, we’ve seen the ability to train people in finance and the value of having people with a lot of different perspectives and toolkits— this helps us avoid groupthink,” Reff said. “We think a good predictor of someone being able to learn and be excellent here is evidence that they were really good at doing the thing that they were doing before, but that thing doesn’t necessarily have to be building financial models.”
A prime example is Alexis Halaby, a member of D.E. Shaw’s executive committee — the six-person team that leads the firm.
Halaby applied to D.E. Shaw straight out of college without any relevant background (she graduated with a degree in biological sciences). She took a finance role and after a few months applied to its fixed-income team, and spent a few years trading G10 sovereign debt and interest rate derivatives. She was most recently the firm’s head of investor relations.
“I benefited from the firm’s hiring approach, which remains in place today—to look for bright people who have been successful in whatever they’ve pursued and give them both opportunities and support to grow and succeed, ” Halaby, 41, told Insider.
Breaking D.E. Shaw’s internship interview process
So while having discovered a planet as an undergrad or worked on cutting-edge cancer research might catch a recruiter’s eye in the application process, it’s only the first step. The interview process includes an initial video interview, a case study or coding test (depending on the internship), a second round of video interviews, and a reference check.
According to Reff, the best way for a candidate to be prepared for an interview is to know their space.
“Intern candidates often ask, ‘Are you sure you don’t need me to know anything specific about finance?’ And our answer always is, ‘You should know the things that you know,'” he said.
Interviews tend to revolve around the candidate’s interests and how they approach problem-solving, Reff said. (The firm gives interviewees a thorough guide on what to expect in the interview.)
In interviews, candidates will come across people they might end up working with. This gives interns a better sense of the job and the firm’s collaborative and analytical culture (in a video on D.E. Shaw’s YouTube channel one employee said his colleagues were “relentlessly rational”, “incredibly kind”, and “unabashedly, unapologetically geeky”).
It also gives D.E. Shaw employees a chance to consider whether the intern would be successful in the role and at the firm, potentially long-term. Many current employees at D.E. Shaw, including a number of senior leadership, have spent the majority of their careers at the firm.
Reference checks are a chance for D.E. Shaw to dig deeper. Reff said the firm uses the checks to better understand the candidate’s achievements and how they compare with others in their field, especially if it’s a field that the interviewers are not as familiar with.
At any point in the process, candidates might even be steered toward an internship other than the one they applied to that could better align with the candidate’s skills and interests. They want interns looking to be lifers.
“We’re not looking for someone to come here for a year or two years and execute a very narrow set of tasks,” Reff added. “We’re looking for someone hoping to build their career here.”
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