George is the Hedge Fund Manager for Silverstone Wealth Management Group. Silverstone WM, an overseas conglomerate, manages a group of Hedge Funds under the brand name Silverstone. All Silverstone Hedge Funds are indentified by a unique GIIN (mandatory for every financial institution) and regulated by the local FSA or other Government authority.
Currently, Silverstone Hedge Funds have under management different type of assets through various affiliates which exceed the value of 650m € in cash portfolio and over 20b $ USD in bonds portfolio with an annual increase of 2-5%. The conglomerate portfolio exceeds the amount of 52 Billion USD$ value not calculating the cash portfolio under management. The team is consisted by seven high skilled associates not including four external broker dealers.
When managing your team of traders/PMs, how do you handle the fact you are a player at the same time you are the coach? How do you lead at the same time you manage assets shoulder-to-shoulder with your team? Do you distance yourself and lead “from above” or get closer and reveal your own vulnerability? Mistakes made in your own trades? What level of closeness do you cultivate with team members?
A coach should be a player to get in the mentality of its players otherwise the game is lost before it begins. The basic approach should be first being a player to handle the different and diverse strategies they may apply to different trade levels. Secondly, lead your players based on your experience and instincts to elect the most sufficient strategies for diminishing risk and maximum hedging.
No team is successful if the leader is not close to its players. Traders/players understand the red line that distinguish you from them, but as the right leader you should always treat them as family and by bossy behaviours. Mistakes are for humans with no exceptions.
How do you balance the CEO and CIO roles? How much time do you spend on asset and portfolio management versus operational/HR/logistical issues? What tasks are you comfortable outsourcing versus which ones must you absolutely do yourself? (Hiring, compliance, raising assets, IR, etc)
There is no balance neither time variety. The leader should get involved with no time or management sectors/limitations to any aspect of the business including human resources management. Know your team, know your business.
What incentives and bonuses do you use to keep key talent motivated? What kind of parameters do you use when assessing them for promotion/allocation increases/retention? Do you use the same criteria when vetting new hires as well?
Different approach. A talented trader should enjoy the benefits of its hard work and time dedication to bring in successful results. Thus awarding is a key element. A new recruiter has to have this special something that there is no name for it. Educational or experience skills will be proved on the trading field but being able to handle hard cases is not something they teach you at school. So, I need to see if he has the gats and if he has those gats, get them out to the market. Unleash the beast. This is the goal of a real leader.
How do you manage the different emotions that come up in individuals and the team itself? Sadness and depression in low times, stress and burnout in intense periods? Do you use incentives, support them personally, or use other resources?
Business is pleasure for professionals so no room for sadness, depression or other negative emotions. Always with calm and smile.
How do you specifically manage the top performers? The most ambitious and highest performing individuals usually want unreasonably high rewards, and if they don’t get it they threaten leaving. How do you walk the tightrope between retaining rising stars and giving them what they want?
Awarding is a combination of bonuses and promotion into the company. There are no rising stars in a team. Team is a collective club so whoever gets it, he will be awarded accordingly. Otherwise the door is always open and dogs are not loose.
Key Lessons from George
- Be a player before being a coach. While leading a team, first prove yourself as a player by handling different and diverse strategies to achieve returns while hedging risk. Then lead from that experience, assisting other players based on your experience;
- Unleash the beast. Education and skills are not everything in a trader. The only real way to know if they have the “hidden factor” is to let them run independent in the field and see how they perform;
- Always keep calm. Even in the hardest situations, there is no room for emotions. Keep logical and go through the process as you normally would;