(Bloomberg) — In a hotel ballroom overlooking the South China Sea, 24-year-old Taylor sits with 13 other college students in tracksuits and sneakers, programming on laptops during the school holidays.
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Two security guards sitting outside the auditorium point out that this is no ordinary summer camp: Business-class students have flown in from as far away as California and Singapore to spend several nights at the five-star Fullerton Ocean Park Hotel in Hong Kong. Trays of crabmeat salad, mini croquettes, and skewers of prosciutto and watermelon sat nearby.
The highly sought-after interns have been handpicked from among 69,000 applicants by assistants to billionaire Ken Griffin at Citadel and Citadel Securities LLC, as the finance giant looks to groom the next generation of math and computer experts who have helped it become a key component of market trading.
Over three days, students will play hedge fund traders, negotiate with peers, write code, and create automated strategies based on simulations with news feeds and macro data. It’s all part of a roughly 11-week program that prepares them for the often-clandestine world of trading and market-making, earning about $120 an hour all the way, or $19,200 a month.
“There is only a limited group of truly outstanding students,” said Cristina Martinez, Citadel’s Managing Director and Human Resources Officer for the Asia Pacific region. “Given the complexity of what we do and the fact that companies that crisscross us will be looking for the same people, we need to start early.”
Griffin, at 54 and the 33rd richest person in the world, knows a thing or two about student potential. He started his financial career at Harvard, trading convertible bonds from his dorm, and asking janitors to set up a rooftop satellite dish so he could get first-hand prices. That has invested in a personal fortune that is now worth about $37 billion.
His Citadel Securities company has become a key part of the plumbing behind the US stock market with its ability to execute $463 billion in trades per day — sometimes buying or selling the stock itself — acting as a counterparty and providing liquidity at the same time.
Mathematics and programming are increasingly desirable skills for employees at banks and investment firms around the world, but it is especially so at Griffin companies where quantitative researchers and engineers devise trading strategies and deploy algorithms to automate the process.
Read more: Ken Griffin’s Citadel Securities is feeling the hottest lights
The Hong Kong boot camp is one of many around the world for Miami-based Citadel, with more of an Asian focus given the company’s expansion in the region. Citadel, the hedge fund firm, and Citadel Securities, the market maker, have doubled their staff numbers in Asia since 2020 to more than 400 people, even as some Wall Street firms have pulled out of the region.
During the summer program, the interns are each assigned a major project, working alongside the army of employees at the two companies that collectively generated $35.5 billion in revenue last year. A few selected interns receive offers to return within weeks after the program for full-time positions, while others join part-time as early as their sophomore years.
“It was completely different, none of my previous internships offered an off-site job opportunity like this,” said Taylor, who asked to be identified only by her first name due to privacy concerns. “The projects they asked us to work on have been used in real applications, which has been very exciting and challenging.”
As one of the less than 1% who reached the internship this year, Taylor stood out due to her previous stints at some of the largest technology companies including Meta Platforms Inc. She majored in computer science at the National University of Singapore, then moved to the city-state of Hebei Province, China when she was about 14 years old to attend secondary school after passing an exam for gifted students.
Mathematics Olympiad
Prior to joining Citadel, she had no knowledge of the financial industry, but had a keen interest in mathematics, which underscores the kind of talent Citadel is looking for. Almost without exception, the interns come from the most prestigious universities in their regions, some of them boasting Mathematical Olympiad gold awards or a Ph.D. in mathematics from Stanford University in California. MBA holders rarely succeed in achieving this goal.
One employee joked that Citadel was living proof of the ancient Chinese proverb: “If you learn math, physics and chemistry well, you can conquer the world.”
However, a strong proficiency in these subjects is just a starting point, says Martinez.
“Someone who is brilliant in academia, but hasn’t done anything beyond boundaries and hasn’t shown real enthusiasm about something, maybe that’s not the candidate who will succeed,” she said in an interview in Hong Kong. “You’re evaluating potential” because “the problems they have here, doesn’t mean we really know the answer either.”
Over the course of the approximately three-month program, students are assessed on skills beyond algebra. These include their level of curiosity and their ability to receive feedback and ask the right questions. They are measured on how well they collaborate with teammates, and how quickly they adapt and pivot when presented with new information. It’s a complex balance: they have to compete with each other and be a team member at the same time.
No surprises
And off site, around lunchtime, one of the students solemnly vowed not to eat too much to avoid a mental regression before the afternoon’s rigorous trading simulation.
The students were divided into groups, and a staff member was assigned to each group to provide guidance but not answers. Over the next few hours, they were expected to create algorithms to hedge their risks and identify arbitrage opportunities, part of the training to help them understand the market making process.
What they don’t know is that their behavior and interaction with each other is also part of the test.
“Unlike job interviews, the internship program is full of real-time problem-solving, social, educational, and highly interactive activities,” Martinez said. “There are no surprises at the end of the process.”
Even meals are a test. One of the many marks for the students is their interaction with company leaders during the networking dinner, which was held this year at the stylish Madame Fu and Porterhouse restaurants in Hong Kong.
To be fair, students don’t fly blind. Citadel hires professional trainers to prepare them, with exercises that include writing an email to your boss by condensing a scattershot 163-word note into fewer than 60 words.
Another technique involves videotaping themselves to introduce themselves, where they are taught how to accentuate their voice, match their facial expressions to their message, and avoid the pitfalls of visceral words and tone of speaking. They are also given personality tests and taught how to get feedback by summarizing what others say.
Talent battle
The reason why Citadel didn’t provide any resources to train these students was because of the intense battle to get top notch talent.
Griffin’s companies compete with the likes of Meta and ByteDance Ltd. and Alphabet Inc. Among the tech giants, along with rival market makers including Optiver Holding BV, Jane Street Capital LLC, and Susquehanna International Group.
For financial jobs across the US, the average intern’s pay jumped 19% in 16 major companies studied by Levels.fyi, which analyzes compensation data provided by users. At hedge funds and trading firms, hourly wages were up 29% year-over-year to $111, and Citadel was among the top of the pay list. Hedge funds and banks are also competing for talent against industries with fewer resources, including medical research that could benefit from artificial intelligence and quantitative analysis skills.
Many finance interns receive other benefits, including signing bonuses, a living stipend, and access to corporate housing, with salary packages similar to full-time employees. In top-tier Wall Street banks, five-star hotels, business-class flights and structured internships have become standard, said Tony Ernst, managing partner in Singapore of Monroe Partners Asia, a hedge fund talent advisory.
“Gone are the days when apprentices did dog business,” he said, adding that if the internship goes well “it’s a great sales tool to get other students in the same schools interested.”
Campus recruitment now starts much earlier than before and often continues throughout the year. HR departments no longer just send batches of resumes to hiring managers and make one-off school visits.
“Hedge funds didn’t go to campus 10 years ago,” said Ernst. “They are now absorbing the top 1% of graduates.”
Target professors
Martinez and her team take a targeted approach, identifying professors at schools like Stanford University and the National University of Singapore who have a proven track record of grooming people who thrive in the company. They also expose students through Datathons, where participants work through large, complex data sets and present their findings.
First and second year students can put themselves on the radar with the Discover Citadel, where the top 40-50 applicants out of thousands are invited to a one- or two-day event. The company also uses targeted recruitment and referral processes to identify high-potential candidates, who are then invited to dinners in cities including Hong Kong, New York and Singapore.
Martinez says that while Citadel and Citadel Securities do not disclose their hiring rate, only the “really outstanding” make cuts.
“Usually, very early on in an internship, you get to know the stars, the really exceptional ones, and that’s when we ask managers to learn everything about them as individuals” to ensure they come back, she said.
The final project
Back at her office in the Citadel in Singapore, Taylor is racing to finish her big project.
The tasks assigned to each intern are different – depending on whether they work in quantitative research, trading or operations – but they all involve real problems facing the company. They are expected to give a 15-minute presentation showcasing their work, and their solutions can be used.
For Taylor, who was asked to improve the efficiency of a particular programme, the most important thing she learned was to “think bigger, not just focus on the issues in front of you, but more cause and effect”.
As part of the off-site training, the students volunteered for a charity, packing and delivering meals in Hong Kong. In true castle fashion, they are divided into groups, vying to be the fastest team.
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