Buy-Side Trader Q&A: Enrico Cacciatore, Voya Investment Management
Enrico Cacciatore won Buy-Side Quantitative Trader of the Year at the 2018 Markets Choice Awards. Markets Media followed up with Cacciatore to learn more.
Briefly discuss your career to date, and your current role and responsibilities?
How I look at the world and specifically investing and trading can be attributed to a few defining events in my life.
Attending West Point and serving in the Army taught me about leadership, teamwork, solving problems in the face of adversity, and being adaptable. After serving as an officer in the US Army, I developed a passion for trading and investing. I spent my first six years after the Army at Fidelity Investments. As a Nasdaq Market Maker at Fidelity, I learned about risk versus return, how to separate out negative human behavior while leveraging positive behaviors in the trading process, and how to lead primarily with rules-based decisions. Since compensation was mostly P&L-based, to be successful, you had to be disciplined and learn when to cut your losses. Even with electronic trading and broker algos, many trading desks allow for excessive human intervention such as tight limits or being aggressive ITM resulting in trading performance with a negative convexity.
As a quant trader and Voya’s Head of Market Structure and Trading Analytics, the majority of my responsibility entails understanding the Quant or Active Portfolio Manager’s intentions and finding trading solutions that best meet those goals. Much of the focus recently involves reducing trader biases and creating a clean data source to evaluate performance. Going forward, expect to see continued focus on automation, machine learning and visualization tools.
What has changed and what has stayed the same in your 22 years in financial services?
What has stayed true during my time in the business has been the constant stream of smart, focused and hard-working co-workers that is unique compared to most industries. What has changed are the skills needed. Early in my career, successful skills revolved around those with strong ability to verbally communicate and express ideas, along with linear thinking. With the advent and continued growth in technology, automation and innovation, we have seen programming, data science, and mathematical skills become requirements. In addition, abstract thinkers able to apply learning from other industries or research not related to trading and investment management are creating innovative solutions resulting in improved processes. This is forcing many desks to start looking at a realignment of personnel, as well as re-education.
What is the ‘secret of your success’?
My secret is always learning, listening, questioning, adapting and growing from both success and failure. The best trading desks on the street are ones with a strong team that leverage diversity of thought and skills.
What advice would you give someone just starting out in quant trading?
I would recommend for anyone getting into quantitative trading to focus on having strong fundamentals in academics related to applied sciences and computer science. If you are able to bring experiences coming from researching in the scientific community, that will only make you more valuable as asset managers adapt to the future.
What is the future of quant trading?
Technology, automation, machine learning, and artificial intelligence will continue to drive change and efficiencies in quant trading. Quant trading will continue to grab market share of funds managed, as investors demand more custom and fee-friendly solutions. Quant trading will drive efficiencies at all touch points of the investment process. We will always require the human element, but we will provide value differently than in the past.
There is a lack of granular data, mismatch between datasets and incompatibility across providers.
Confluence’s risk and performance solution will have coverage powered by J.P. Morgan’s analytics.
German exchange group acquires outstanding 49% stake from UBS.
Investors’ appetite for ETFs has grown dramatically over ten years of the Charles Schwab survey.
Euro-denominated green bond portfolio had higher returns on average over the last seven years.