Can you tell us a little bit about your role?
(brief introduction, name, company, etc)
Daniel Chambers, Head of Trading,
Sequoia Capital Fund Management
Sequoia Capital Fund Management
(SCFM) is an alternative investment
management company specialising
in investing via quantitative strategies
and returned 13% in 2015 net of
fees. Our focus is on short-term
trading opportunities in highly liquid
derivatives and FX spots and forwards
using our proprietary models.
There's a lot of talk about technology
these days, but fixed income and FX have
historically been less electronic than
equities. What sort of electronic tools do
you find useful in FI and FX?
At SCFM, we do not trade Fixed Income,
but trade G10 FX entirely electronically.
The decision to execute entirely
through electronic trading was a
natural one to make as it is in keeping
with SCFM’s ethos of implementing
technology to increase productivity.
SCFM has always traded electronically,
with varying degrees of complexity.
Reduced likelihood of errors during
execution and increased efficiency
were two of the key drivers for this
decision and has proved to be the
correct decision. The post-trade TCA
and liquidity analysis are carried out
using tools built in-house.
Are there any limitations to these kind
of tools? How do you choose between
them? (for example, algos, TCA)
Using in-house tools provides flexibility
that enables you to look at things
from different perspectives and make
changes in the way you view your costs
etc. Third-party software that I’ve seen
does add value and include numerous
features that may not be available
immediately when building tools
from scratch in-house, but my opinion
would still be that gaining insight
to then replicate