Daniel Loeb’s New York-based hedge fund, Third Point Management, has recently hired Matt Ober from WorldQuant to become chief data scientist. Ober purportedly could earn up to $2 mln in compensation from the move.
According to a breach of contract claim filed by WorldQuant, Matt Ober, who will start with Third Point next month as chief data scientist, is slated to be paid a base salary of $200,000. However, bonuses could boost Ober’s annual compensation to $2 mln.
Ober, aged 32, joined WorldQuant in June 2011 as a data analyst and was promoted in April 2014 to co-head of data strategies at the Greenwich, Connecticut-based hedge fund. Previously, Ober worked for almost 4 years at market data vendor Bloomberg as an equity and derivatives analyst. Ober’s primary responsibility at Third Point will be to help the firm identify and acquire unique alternative data sources and more quickly build out its “big data” strategy.
Sign Of The Times?
The huge paycheck Ober is reportedly being offered could be a sign of the times as numerous hedge funds scramble to build out teams of data scientists to identify investment signals derived from alternative data.
Alexey Loganchuk founder of a New York recruiting firm that focuses on alternative data explains this growing trend, “It is too early to call data scientists the new masters of the universe but they are on their way there. Because of how new the space is, the transition from entry level to management can happen quickly. There are several people out there making seven figures in their mid-twenties.”
Clearly, many hedge funds looking to boost sagging returns, are hoping that data scientists will deliver the alpha they once produced. Consequently, numerous funds are building out “big data” teams to identify new nontraditional data sources, clean this data, and create predictive models which are additive to their investment processes.
Given that the demand for data scientists on Wall Street has risen sharply in the past year or two, and the supply of skilled professionals has not kept pace, it is not surprising that compensation for experienced data scientists is surging. However, the real question is whether most hedge funds will actually see the benefit of their investments in “big data”. While we are doubtful, we don’t question that this trend will have a huge impact on the investment research business in the coming years.