The ranks of traders at top Wall Street banking institutions have shrunk dramatically in recent years, driven by changes in regulation (think Volcker Rule), in many cases overly stringent capital and risk management requirements, and shifts in the banks’ own business models. Many of these traders have brought their expertise and skill to smaller boutique firms, including ours—Alpine Global—a proprietary trading firm specializing in event-driven trading of equity-based instruments across global markets.
In our experience, attracting top talent from traditional financial institutions takes more than the simple Field of Dreams approach of, “if you build it (a new firm), they will come.” We have found it is critical to create a unique business model, a supportive infrastructure and, most of all, a compelling corporate culture, in order to make the firm a magnet for senior-level talent. This approach has been a key to the growth of Alpine Global, which, in the nine years since the founding of our firm, has attracted senior-level talent from major banks such as Deutsche Bank, JPMorgan Chase, Bank of America and Goldman Sachs.
I’m being transparent and sharing our blueprint for a successful proprietary trading firm to appeal to an even larger number of talented professionals.
Sharply focused business model. The first requirement to attract top talent to a proprietary trading firm is to create a business model that is tightly focused on a specific type of strategy. In our case, that strategy is global event-driven trading in equities, futures, and volatility. Having a sharp, well-defined focus will increase the firm’s appeal to senior traders who have developed solid track records in that area, and want to ply their craft where it will be understood, appreciated and rewarded.
Streamlined infrastructure. Adopting a relatively simplified, highly specialized business model allows a firm to avoid some of the organizational “red tape” that can be a disincentive to many experienced traders. Larger banks are by definition multi-line organizations, and thus need to have procedures and systems for many types of activities. For example, a bank that trades a variety of instruments, from equities, to debt, to physical commodities, will have extensive processes to match—many of which are not relevant to the trader on a specific desk. This often causes traders to “jump through hoops” unrelated to their actual day-to-day activities or overall goals. At Alpine Global, we’ve established an organizational and compliance infrastructure that combines robust risk management with a relatively streamlined set of processes—it has, “everything you need and nothing you don’t.”
Collaborative, supportive culture. In our experience, traders function best (and have more job satisfaction) in a work environment where they can freely share knowledge and ideas with colleagues. So we’ve created a flat structure that promotes a collaborative, learning environment. Our more junior team members tell us that they are excited by the opportunity to work closely with and learn from some of the most seasoned traders on the Street. Our culture is highly entrepreneurial—allowing traders to build what is essentially their own “business within a business.” We’re also known for supporting traders with strong conviction; there are cases where a trader has approached management for authority to put on a sizeable trade, and finds that we’re willing to back the trade with a significantly more resources than expected.
The right attitude. Talented people are the heart of any business, but they are especially important to a small, proprietary trading firm that relies on the abilities and judgment of a relatively small team. A key quality that we look for, in additional to skill and experience, is humility. (We sometimes jokingly call this the “no jerks” rule.) We’ve found that some of the most accomplished people in our field are also the most humble, because they are well-established in their profession and self-assured. Humility enables a team member to listen to others and “forget the last trade” and move forward. Another valuable trait is being a self-starter. Someone who prefers to work within a rigid hierarchy may well make a contribution to a larger firm, but won’t thrive in a fast-paced, dynamic and entrepreneurial environment.
By creating a sharply focused business model, supported by an efficient yet streamlined infrastructure, and fostering a collaborative culture, Alpine Global has attracted top talent from leading institutional trading desks. We’re proud of the way we have attracted the talent needed to create and grow a world-class proprietary trading boutique—a firm where “traders want to trade.”
By Uriel Cohen, Co-Founder, Alpine Global, LLC
Uriel Cohen, a co-founding member of Alpine Global, has over 15 years of experience in the financial and securities industry. Uri has founded, managed, and acquired numerous financial based firms, focusing on opportunities in proprietary trading and technology.