Professional Background:

My first job as a trader was in 1994, working for my current partner, Jaffray Woodriff, at a small CTA. Jaffray has been trading for about 17 years now, as a CTA and also as a prop trader for Societe Generale in New York. So he has most of the trading experience, and in 2000 Jaffray hired me again to work with him. We started the company that year and began trading the Global Program at the end of 2001. It was just the two of us for the first three years.

Education:

I graduated from the University of Virginia in 1994 with a B.A. in mathematics and a minor in statistics.

Fun Fact

I'm a very happily married man with three wonderful girls.

BIG PICTURE

Biggest trading opportunities for the firm?

A big opportunity for QIM going forward is to continue to manage and reduce slippage cost. In 2006, we were fairly active, and as our assets grew rapidly, we realized that we were leaving money on the table not because our models weren't good enough but because the slippage got to be too large. And that's what prompted us to develop our own algorithms. We also changed the way that we did executions and allocated risk to the markets to better handle our growth and assets and at the same time reduce our slippage cost. Going forward, it's a constant struggle as we continue to grow to make sure our algorithms and our execution strategy are sufficient to maintain the results that we expect and that our clients expect. There's a lot of additional money to be made if you can reduce your slippage, so we are constantly evaluating that.

Difference between trading for an alternative investment firm vs. trading for a traditional asset manager?

For us, our goal is to get the actual trader out of the picture and let algorithms do the trading for us. That's probably a year away for us -- to make sure our algorithms are robust enough to be run in the middle of the night with nobody watching them. Nothing against traders, of course, but computers and machines are much better at executing than are people. There's too much emotion involved when traders are trading. If you have algorithms that never forget anything and can learn from how they've been trading in the past, that's much more valuable than having a physical trader executing your trades in the marketplace.

What is the most challenging aspect of your job?

Managing the growth of our firm. In two years, we've gone from about $12 million in assets to just under $2 billion. So there's a lot more pressure in general to maintain our performance because we have a lot of new clients coming in who expect us to do as well as we've been doing. The infrastructure of our firm is set up very nicely to handle the asset growth, but there are some growing pains. 2006 was a difficult year for us, partially due to the rapid growth. Returns weren't as good as they were and as they should have been. I think in 2007 we're back on track and having a very good year. Clients realize that the problems we had last year were due to slippage and growth in assets. But it's a constant struggle, as we continue to grow, to maintain our edge in the marketplace.

Major Industry Trend

What we've seen, talking to a lot of the allocators or investors in the CTA space, is that there is starting to be a shift toward more short-term traders. We certainly can attest to that, with our rapid asset growth. So I'm seeing a lot more people looking favorably upon short-term traders, whereas before they tended to shy away from them. Going forward, I hope that trend continues. Short-term traders do offer a lot of added diversification and are able to do well in markets that are sometimes difficult for longer-term CTAs.