Alec Litowitz had the perfect pedigree for Wall Street: Not only did he have a math degree from MIT and a Chicago MBA, but he was a jock: the first-ever All-American squash player in MIT history, a veteran of Ironman and endurance mountain-biking competitions, chairman of the board of a charity that gives disabled people the chance to be jocks, too. But six years ago, the Magnetar Capital chief realized that the trading world wasn’t all about brawn and instinctive risk-taking. It was about crunching the numbers. And even an athletic sort with an MIT math pedigree like himself couldn’t crunch them as fast as the shy, scrawny, retiring types studying computer science with whom he once shared a campus.
Magnetar is pouring tens of millions of dollars annually into researching new techniques for investing. One-fifth of the firm’s 260-person staff now works in technology. A stand-alone Minneapolis office houses quantitative researchers who produce sometimes counterintuitive advice….
“Everybody in this industry is suddenly saying: ‘Couldn’t a robot do that?’” said Sean McGould, president of Lighthouse Investment Partners, which puts client money with Magnetar.
Worse, Magnetar's not alone. This is all very bad news for the captain of the Harvard football team, past, present and future. As trading floors wither and more and more trading is done by machines programmed by the sort of people for whom sports is mostly about putting together a fantasy team based on a quantitative model, the athletically-built and asthma-free types who used to run the place are feeling some new feelings: marginalization, disrespect, self-doubt. Just ask former Columbia wrestling capital Michael Savini, who recently gave up on equity sales.
If college athletes asked him for advice in pursuing a career on the trading floor, he said, his message would be a simple one.
“The business is changing,” he said. “It’s all going electronic.”
It’s not that all hope is lost, according to 1986 national college football champion and current Weeden & Co. CEO Lance Lonergan. Just most of it.
Today, Mr. Lonergan talks to college athletes regularly. He says some have relayed their fears of being unable to break into the finance industry without a math or science background. Others are concerned that it appears the hunt for jobs must begin even before they finish their freshman year.
He cautions them not to abandon Wall Street completely, and that there is still a place for them.
“The core attributes of athletes are well-suited for the trading floor,” said Mr. Lonergan.