We sat down with Chris Udy, the CEO of diversified trading firm Tibra Capital, to learn about how the company has grown in recent years, his own speedy ascent through the ranks, and why he’s not about to jump on the crypto bandwagon.
Tell us about Tibra Capital.
Tibra Capital was founded in 2006. We’re an Australian-headquartered and owned firm. We started as an options market maker, so we’re a proprietary trading firm and the mission of the business is to facilitate liquidity, price fairness and efficient allocation of capital in financial markets. Over 12 years, we’ve grown into a global business and broadened our investment process. So we’re no longer just an options market maker – the lens we’ve put on the business is of a systematic, quantitative, global trading company. We see ourselves as an Australian success story.
What about your own journey – how did you get into the financial industry?
I have had a slightly unusual route into financial services. I’m an electrical and electronic engineer by training, specialising in signal processing. I was working for a company that was trying to develop software defined radio, which is the idea of being able to reconfigure your radio on the fly – so one minute it’s a mobile phone radio, then it’s an FM radio, then it was something else – it could change.
One of my contacts from that role realised that some of the technology we were developing could be used in financial markets, so I joined him in a hedge fund and that’s where it all started. It was amazing to me because I thought an engineering background and education would lead me down a fairly traditional engineering career. But as it turned out, there was this world of quant trading that had a lot of overlap with what I was doing, and that is how I got into the industry.
I worked in a few different hedge funds until 2012, when I joined Tibra as a quant developer. The proprietary trading space was something completely new to me, but I heard good things, so I took a chance, and I’m glad I did!
You worked your way up to CEO very quickly. How did you do that?
I might answer this question in terms of the attributes that I like to see in quant traders and how to be successful in our industry. First of all I think you’ve got to have an appetite for the business. There’s a huge range of industries out there, really compelling opportunities and awesome technologies. So I think it’s really important that when you come to a business that’s capital markets focused, that you have an appetite for capital markets – that you have a little bit of a curiosity to understand how markets operate, understand the different participants and understand and see opportunities.
The second thing is having the competencies, and also the pragmatism, to turn that insight and curiosity into something via the quant process that creates value for the company. This is where my training as an engineer was invaluable, because engineering is a very pragmatic, practical, problem solving discipline. It’s easy in a lot of industries to get seduced by the cool technology, but it always has to tie back to a commercial outcome.
You’ve got to have a little bit of resilience as well, combined with initiative. A lot of the time with the work that you do, the research is unsuccessful. You have to be able to take what you can learn and the things you can see as successes from your work, and continue to build on those. The opportunity to try and test out an idea and get insight is equally as valuable whether the idea is successful or not. Failing is sometimes just as equally important as succeeding. That’s the nature of innovative quantitative research.
If I look at my career, I think it’s about proactively taking the opportunities that are presented. Tibra is a firm of opportunity and that’s had a lot to do with my career. In a small business like ours – we’re only circa 100 people globally – it’s easy to be visible if you’re putting your hand up to take advantage of opportunities.
Was CEO always the goal?
I’ll be honest and say yes.. The previous CEO of Tibra taught me a huge amount about the industry and the business. He was one of the founders of Tibra, and he really set me up to succeed as CEO. I suppose I was pretty clear with him relatively early on that I fancied his job. It was always an ambition of mine.
How accessible and inclusive do you think the financial sector is?
Overall, I think there are a lot of financial services businesses out there who have to be enabled with technology to remain competitive, which has created fintech. So there are a lot of things that would have been considered very tech-centred a few years ago, like open source projects and other initiatives around increasing access to technology, that have found a home in financial services. Fintech is about making the customers’ experience better and easier, and removing the friction from their day to day experience. Hopefully the end user sees that when they’re using the end financial technologies.
From a B2B lens, you can see the evidence of technology allowing these perhaps non obvious connections. Like with Crypto currencies – that has implications in financial services, but also wider implications in the B2B context, even consumer content. I think it’s interesting innovations like that that will socialise fintech more with the broader population.
What’s your take on cryptocurrencies and blockchain?
I think blockchain technology will have applications across many industries, including finance. With cryptocurrencies, whether they become more mainstream, or find a natural domain, like ICOs –the jury’s still out on that one. It’s a really interesting technology that excites people beyond finance, but I think the application of the technology still needs to find more mainstream acceptance in the financial services.
Tibra as a business is much more focused on the opportunities that we’re curating right now in terms of where we currently trade and the markets we access. We’re on a wait and see with cryptocurrencies. I would never say never, but it’s not something that we’re immediately pursuing.
What is the future for Tibra?
We’ve got to make sure we have a compelling value proposition for staff. We’re competing for the best with the likes of Google and Facebook. I always go back to saying that Tibra is a firm of opportunity and I like to think I am an embodiment of that. We’re really looking up and out when it comes to opportunities, whether it’s different markets, geographies or technologies, but as a business we don’t have an aggressive acquisition strategy, we’re focused on growing organically.
How do you predict the financial sector will look in the future?
The efficient and orderly operation of capital markets is important and Tibra’s future is focused on supporting those objectives. Does blockchain as a technology change the landscape in terms of making things more efficient? Maybe it does.
What we also know is that more people are coming to the markets – people are more educated around how they manage their own finances. So what was considered a closed industry is becoming a little more open and transparent, and that’s got to be a good thing.
Financial markets are not going away. They offer transactions to make sure capital flows to the places it needs to flow to. There’s always going to be a consistent drive to make that as efficient and transparent as possible.