Vision for the Future
There is a movement toward the multi-asset trading platform. I can see where we will be more involved trading global issues, options and other derivative products in the future.
Fun Facts
Tell us something interesting that few people know about your professional or personal background.
I got my start in trading over 25 years ago by managing and trading an options strategy. Then there was an opportunity to get involved in the trading department. None of the traders at the time were knowledgeable about the options product, so that gave me an opportunity to become more knowledgeable and start managing and trading that particular product. It gave me an introduction into the trading world, and we went from there.
As far as time off, I am very interested in golf and spending quality time with my family. I have two children - my daughter is 19 and my son is 17.
INTERNATIONAL TRADING
In which international markets do you trade?
We are involved in approximately 50 different countries' local markets.
Do you have separate traders for international trading?
We have two traders that are dedicated to the international markets.
Who do you use as a custodian bank?
State Street Bank and Trust Company of Boston.
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Evergreen Investments
200 Berkeley St.
Boston, MA 02116
Assets under management:
$250 billion.
Fund(s) for which you trade:
N/A
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Types of products traded:
On our desk it's domestic and international equities. They run the gamut: small cap, mid cap and large cap. We also trade high-yield fixed income as well as some currency and some derivatives.
Daily volume in equities:
5 million shares in domestic equities with a rough market value of $120 million; $30 million in international; high yield is approximately $20 million daily.
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Structure of trading department:
We have two international traders and two high-yield traders. We have three small- and mid-cap traders, and three large domestic traders. The domestic equity traders work as one unit, but basically the coverage is broken down into the small and mid, and the large. On our Charlotte [N.C.] trading desk we also have four traders that trade the private asset management product.
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Previous Positions:
I started in the organization over 33 years ago, when it was Keystone Investment Management, in the transfer agency divisions. I moved through the fund accounting areas and joined the trading department over 25 years ago.
Education:
I graduated from Boston College with a bachelor's degree in economics. I subsequently attended Boston University evening college in the M.B.A. program, but I haven't yet completed it.
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TECHNOLOGY
Technology used to trade equities:
Equities: We currently use the Macgregor Financial Trading Platform (MFTP) as our order management system. We are on the XIP 6.14 version. The Merrin Financial Network (MFN) provides our FIX link with our brokers. We also have an equity trading desk in Charlotte that uses MFTP and TeamTrader, a Bank of New York trading platform.
Fixed income: MFTP and Bloomberg.
FX: We use FX Connect, a State Street Bank platform. We are linked to FX Connect through Currency Exchange, an internal system.
Other: Bloomberg, Reuters.
Chief Information Officer:
George Batejan
How do you work with your CIO when it comes to getting new technology on the trading desk?
We work with a dedicated trading support team from CIO George Batejan's group that supports investment technology. We partner with them. We have two investment technology trading support people that will be on our desk who work with them on a daily basis. The CIO in conjunction with the top board approves all purchases.
LOOKING AHEAD
What trends/regulations/issues do you think will transform your role as a trader?
I think Reg NMS is a driver in the market and has already resulted in multiple changes. We are seeing changes in the exchanges' structures and the revival of some of the regional exchanges as well. Some of the other trends we are seeing are broker consolidation interacting with the buy side in terms of delivering research; and I think we will also see multinational listing and multinational exchanges delivering opportunities to trade multiple assets on a single platform.
What do you hope technology can change to make your role easier?
We are hoping that the technology will keep up with the pace of the growth in the markets. As volume picks up with the advent of Reg NMS, the structures will be robust enough to continue to deliver the speed, which is required with the growth and the volume.
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PORTFOLIO MANAGEMENT
Describe your relationship with your portfolio managers.
It has changed in that we are working more closely without our global product structured team, as they have gotten involved in some different products. We also have some recent retirements on our portfolio management teams, so we are developing new relationships with the portfolio managers.
How do you work with your portfolio managers?
We work with a variety of portfolio management teams, and we structure our trading support to be an integral part of the investment management process for those teams. So we could be very much involved in daily meetings, pre-opening meetings and constant communication throughout the day on market conditions and the specific stocks.
ALGORITHMS
Types of algorithms used to trade:
We use primarily strategic algorithms that have more recently come into the marketplace - more of the second generation that will have minimal price impact, particularly for small-cap products that will be able to source liquidity and trade relatively large chunks of volume when it's accessible. We are also using implementation shortfall as one of our primary algorithmic tools.
Which algorithms do you use most often?
The strategic tools as well as implementation shortfall.
Do you use algorithms for equities only?
Yes.
Which brokers' algorithms do you use?
We've got several on our desktop. We use the Credit Suisse platform as well as Lehman, Merrill Lynch, Bernstein, Morgan Stanley, UBS, Goldman and Citigroup.
Do you build your own algorithms?
No, we don't. We find that with all the various platforms on our desk offering different methods, they suit our needs perfectly.
How do you rate your brokers and determine which broker will get your order flow? We have a quarterly vote internally that is both a research and trading vote. Brokers are evaluated on the depth of services and market making that they provide to the trading desk. Our order flow is driven by the best execution process.
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Interview by Leslie Kramer, Contributing Writer
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