Buy-side Perspectives Issue 4 - Page 21

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