Muting Ren, Andy Nguyen and Phat Loc collect awards at the financial engineering reception

The rise and success of quantitative driven hedge fund trading can be largely credited to math wizards and quants, not people labeled as financial engineers.

Over the past 10 years, investment banks, finance departments, insurance, accounting and consulting firms have continued to demand these greatly quantitative financial minds. In response, over 60 universities across the country started new Masters in Financial Engineering programs. From a single program in 1994 to about 60 programs this year, the impact of all these financial engineers on Wall Street has been significant.

According to the International Herald Tribune, quant strategies accounted for nearly 48 percent of U.S. equities trading in 2007, representing a 34 percent increase from the previous year.

Among the top programs in the country is Baruch’s MFE program which was created in the fall of ’02. The program has been mentioned in major publications such as The Wall Street Journal and Financial Times. With an acceptance rate of 11 percent for fall 2008 applicants and a 100 percent job placement for each member of the 2007 MFE graduating class, Baruch’s program is not only one of the most selective in the country, but arguably the most successful program within the college. Dan Stefanica, director of the Baruch MFE program noted his high level of contentment with the current status of the program and the high standards that are being held for program applicants.

During the application process, a statement of purpose is used to derive student’s reasons for pursuing an MFE degree and why they have chosen to pursue this prestigious degree at Baruch. Unlike most MFE programs, Baruch’s MFE program does not have a quota for admission or for enrolled students. “We are committed and have always been committed from the very beginning to admit as many students that qualify,” said Stefanica. Thus, their rolling admission policy is aimed at following the established policy forcing admissions administrators to establish minimum admission standards for each applicant.

Baruch MFE students engage in a homework session in  their designated wireless lab

They look at each applicant’s level of achievement, knowledge in math and finance, work experience, statements, recommendation letters and a personal interview to better understand the student. Based on the interview, they choose which candidates can be successful in the program and the job market. They only accept students that meet all their criteria. The average GRE quantitative score for students accepted for fall ’08 was 796 (out of 800).

As a professional masters program, professors not only challenge students but also place an emphasis on teaching useful and relevant concepts that students are expected to know when they enter the work force. It’s a goal oriented teaching process that’s aimed at fully preparing graduates for work. In addition, courses are taught by practitioners from the financial industry, enhancing the practical knowledge and the financial engineering skills of students.

While very few people make decisions based on tuition, due to the starting salary upon completion, Baruch’s low graduate tuition for this top level MFE program is certainly another feature that sets it apart from other programs. The program also has a very high yield in regard to how many graduates are given and accept extended offers. The yield has always been above 70 percent and this year it is 69 percent.

Baruch MFE students engage in a homework session in  their designated wireless lab

Administrators within the program have chosen to be proactively honest by publishing their employment and admission statistics online. “The real story is the students,” states Stefanica. “Everyone who was admitted was admitted because we believe that they will be successful. If you trust that you’ll be successful, you’ll work very hard which our students do,” he adds. While the ultimate goal for these future quants is to both become intellectually versed and work in the financial industry, students in the program also establish strong personal relationships. They have a very close network of students and alumni that they can contact for advice.

Last Wednesday at the financial engineering reception for new students, Phat Loc, now a trader at Credit Suisse and Andy Nguyen, now an Associate on the equity prop trading desk at Deutsche Bank were given a special service award for their efforts in maintaining the alumni network. The Ercolano Prize for the best student of the 2007 class was awarded to Muting Ren, who just completed a summer internship at UBS.

 

Baruch MFE students engage in a homework session in  their designated wireless lab

For students in the program, not even this tough job market has impeded their job prospects as financial engineering grads continue to be hired at a fast pace. In mid summer, the trade journal Advanced Trading published a top ten list of quantitative finance programs giving Baruch’s program an honorable mention.

In a recent blog post discussing the governments rescues plan for Fannie Mae and Freddie Mac on “Wilmott,” a derivatives trader wrote, “The best quants and analytical minds from the best investment banks and the best students from Baruch, MIT, Harvard or Stanford put together, could not go into Fannie or Freddie and precisely and correctly price and value the mortgage-backed securities Fannie and Freddie have in their portfolio.” It’s certainly becoming more apparent that Baruch’s MFE program is in good company.

Source: MFE excels – Business